As one of the Asia’s financial centres, Hong Kong has continuously optimized its business environment in recent years to attract more international companies. On December 20, 2024, the Hong Kong government published in the Gazette the “Companies (Amendment) (No. 2) Bill 2024” (hereinafter referred to as the “Bill”), proposing the introduction of a company re-domiciliation mechanism that allows overseas companies to transfer their domicile to Hong Kong and become Hong Kong incorporated companies. The Bill was introduced to the Legislative Council on January 8, 2025, a move seen as an important step in enhancing Hong Kong’s status as an international business centre.
The expert team of WALL has compiled relevant content to introduce the main provisions of the regime and analyze its potential impact.
Summary of the Bill
The regime allows non-Hong Kong incorporated companies to re-domicile to Hong Kong while maintaining their legal identity as a body corporate and ensuring business continuity, without going through complicated and costly judicial procedures.
This regime only applies to companies moving into Hong Kong from other jurisdictions and does not include Hong Kong companies relocating outward.
The main features of the re-domiciliation regime are as follows:
- Preservation of Legal Identity: Re-domiciled companies can change their place of incorporation without re-establishment, maintaining their original legal identity as a body corporate.
- Business Continuity: The company’s contracts, assets, and liabilities remain unaffected after re-domiciliation, ensuring business operations continue without interruption.
- Legal Status: Re-domiciled companies will enjoy the same rights as any locally incorporated companies of their kind in Hong Kong, including participation in the local market and access to financing.
- Compliance Obligations: These companies will be required to comply with the provisions of the Companies Ordinance (Cap. 622), including annual reporting, shareholders meeting, and financial disclosure requirements.
Purpose and Significance of the Bill
The re-domiciliation regime aims to strengthen Hong Kong’s position as an international business and financial centre and attract more overseas enterprises:
- Business Environment Advantages: Hong Kong offers a simple tax regime, with no capital gains tax, value-added tax, or withholding tax, attracting many companies which seek to optimize their tax burden. Additionally, Hong Kong’s legal system has high international recognition and provides stable legal protection for businesses.
- Favourable Geographical Location: As a bridge connecting mainland China with international markets, Hong Kong’s geographical position is particularly advantageous for multinational companies, especially in the context of Greater Bay Area development.
- Lower Compliance Cost: The proposed re-domiciliation regime allows non-Hong Kong incorporated companies (particularly those with a business focus on the Asia-Pacific region) to re-domicile to Hong Kong. This will address the increasing compliance burden of adhering to two sets of rules in two different jurisdictions, thereby reducing compliance cost.
Impact on Overseas Companies
For overseas companies considering entering the Hong Kong market, the regime provides the following key benefits:
| Streamlined Market Entry |
| – Provides a direct relocation path while preserving company history and business networks – Eliminates the need for going through complicated judicial procedures, saving legal and administrative costs – Enables seamless market transition with reduced risk of business disruption |
| Entry Tax Planning Advantages |
| – Provides benefits from Hong Kong’s tax advantages and global tax treaty network – Optimizes tax structure and improves the companies’ overall efficiency |
| Capital Market Opportunities |
| – Offers direct access to Hong Kong’s mature capital market – Provides a more direct path for companies considering future listing in Hong Kong |
Impact on Companies in Different Industries
Companies in different industries may be affected in the following ways:
- Financial Services Industry: As a pillar industry in Hong Kong, financial service companies may be benefited most from the proposed re-domiciliation regime, particularly considering Hong Kong’s status as an international financial centre.
- Multinational Corporations: For companies with headquarters overseas but significant operations in Asia-Pacific region, the regime provides a convenient option to relocate regional headquarters to Hong Kong.
- Innovative Technology Companies: As Hong Kong increases support for innovative technology, the regime may attract more technology companies to relocate to Hong Kong to enjoy related policy benefits.
The introduction of company re-domiciliation regime is an important measure in Hong Kong’s continuous optimization of its business environment. For overseas companies considering entering the Hong Kong market, the proposed regime provides a new market entry path and development opportunities. Companies should closely monitor the latest development of the Bill, assess its impact on their businesses, and seek professional advice when necessary to fully capitalize on the opportunities brought by the new arrangements.
WALL was established in 2016 and is headquartered in Hong Kong. We support businesses in their growth and global expansion, driving positive changes. We offer a comprehensive range of professional services, including: