Re-domiciliation proposal mooted

On March 30, 2023, the Hong Kong government published a press release to announce the launch of a consultation by the Financial Services and the Treasury Bureau (FSTB) on a proposed new re-domiciliation regime for ALL types of companies. The proposed new regime follows the introduction of a similar, highly successful regime for open-ended fund companies in 2021. This time, the regime would apply to all firms that seek to re-domicile to Hong Kong.
##### The key features of the new regime are briefly noted below:
– There won’t be a substance test for firms engaging in the regime to accommodate different business models (e.g. holding company models).
– Companies would not need to wind-down their old „company“; instead, they could seamlessly „transfer“ the old business to Hong Kong which allows them to retain their legal identity.
– „Five types of companies could be formed in Hong Kong, including (1) private companies limited by shares; (2) public companies limited by shares; (3) companies limited by guarantee without a share capital; (4) private unlimited companies with a share capital; and (5) public unlimited companies with a share capital.
– The new regime would be open to and apply to all „comparable“ types of firms in their home jurisdictions.
– The new regime would require the payment of taxes in Hong Kong, if income is derived in the city / state, although further details on the new tax regime are yet to be determined.
– The Registrar of Companies will be responsible for the approval of corresponding applications.
– There will be some specific requirements applying to such firms, e.g. pertaining to their solvency in the first 12 months after re-domiciliation or the track record in home jurisdictions.
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As these are only the key features of the new regime, please refer to the enclosed document for more detailed, comprehensive information.