The Financial Secretary announced in the Budget the
introduction of a company re-domiciliation regime to facilitate non-Hong Kong enterprises to re-domicile to Hong
Kong, so that they may utilise our favourable business environment and
professional services. Since this month,
we have been reaching out to key stakeholders including business chambers,
professional bodies and relevant statutory advisory bodies to explain our
thoughts and hear their professional views. Today, we will publish the relevant document for public
consumption (This link will open in a new windowhttps://www.fstb.gov.hk/fsb/en/publication/consult/consult-policy.html). If you have any views or
suggestions on the introduction of a company re-domiciliation regime, you are
welcomed to let us know in the coming two months. I also wish to introduce through this blog
post our ideas on the proposed regime.
Building on experience
Re-domiciliation regime is not wholly new in Hong
Kong. Back in 2021, we took the first
step to put in place a user-friendly fund re-domiciliation mechanism for
Open-Ended Fund Companies and Limited Partnership Funds to facilitate foreign
funds to operate in Hong Kong. Building
on the positive experience of the fund re-domiciliation mechanism, we think now
is the right moment for us to go for a company re-domiciliation regime which
has wide applicability. The company
re-domiciliation regime, when in place, will allow companies to change their
place of incorporation to Hong Kong seamlessly without having to undergo the
complicated and often expensive winding-up procedures or court-sanctioned
schemes of arrangement.
Response to market needs
Hong Kong has an open and efficient company governance
regime, reliable rule of law tradition, simple taxation system, and world class
professional services. Hong Kong’s
strategic location as well as commercial and trading networks with the Mainland
and worldwide are also favourable to corporations’ management of their
operations in the Mainland and in the Asian region. Industries have previously reflected to us
that some non-Hong Kong incorporated companies, especially enterprises with certain
business operations in Hong Kong and those hoping to ride on Hong Kong’s
advantages to expand their business, are interested in re-domiciling to Hong
Kong. Our current proposal to introduce
a company re-domiciliation regime can meet the market needs by providing a
highspeed motorway to facilitate companies making up their minds to move to
Hong Kong.
Wide application, simple procedures
In order to allow more companies to benefit from the
proposed re-domiciliation regime, we in principle would widen the application of the mechanism as far as
practicable, making it to be generally applicable to companies coming from
different places and of different types and scale. The Registrar of Companies will be
responsible for approving applications for re-domiciliation to consider whether
the companies have fulfilled specified requirements in relation to integrity,
member and creditor protection and solvency, etc., so as to ensure that
companies re-domiciling to Hong Kong are of good standing. The spirit of a re-domiciliation regime is to
ensure that the process would not affect the property, rights, obligations and
liabilities, as well as the relevant contractual and legal processes of the
companies. The continuity of the
business operation of the re-domiciling companies will therefore be guaranteed,
and the rights and responsibilities of the transaction partners of the company
will not be affected either. While
ensuring that the legal identity of the company will be smoothly re-domiciled
in Hong Kong, we will also clearly
stipulate the transition of the tax obligations of the incoming companies in
the original place of incorporation and in Hong Kong, so as to provide
certainty to the companies on the prospective tax-related changes.
Attracting outside entreprises, investment and talents to come to Hong Kong is a key policy objective of the current term of Government. The Policy Address and the Budget have already launched many targeted measures. Introducing a company re-domiciliation regime will add to our policy toolbox another useful instrument.
Views welcomed
I welcome your views which will help us develop a
user-friendly and effective mechanism to facilitate quality non-Hong Kong
companies to re-domicile to Hong Kong as early as possible, thereby adding new momentum
to our local professional services and capital markets.
31 March 2023