Hong Kong Accounting & Audit

Audit for the Hong Kong Company

The annual audit is one of the mandatory obligations to the company stipulated by law. In accordance with the provisions of the Hong Kong Companies Ordinance, registered Hong Kong companies should hire a certified public accountant to conduct audits on time each fiscal year.

Auditors shall audit the income statement, bank statements, balance sheet and related bills in accordance with the audit standards prescribed by law. They should also comment on whether the accounting system formulated by the company complies with generally accepted accounting principles (GAAP) and its effectiveness in the actual application process.

Based on the principle of independence, our audit team provides the company with annual audit reports that comply with auditing standards, and expresses audit opinions on the authenticity, fairness, and consistency of the accounting process of financial statements and accounting records.

If necessary, we can provide management advice, which lists existing key issues, as well as improvement plans, references and suggestions.

Under what circumstances that the company is not required to arrange audit and can simply file zero declaration?

Only those are ok to file zero tax declaration.

1.      Does not purchase any property in Hong Kong.

2.      Does not open any bank account and does not have any business transaction.

3.      Doe not commence any business, such as signing contract, issuing invoices or bills, declaring export or import, recording in custom or any goods transportation.

4.      Does not employ any staff in Hong Kong.

5.      Does not permitted to or authorized to usage any patent or brand name related business.

6.      Does not have any profit or business.

And if you suit below situation, you must file the audit and pay tax accordingly.

1.      Already open a bank account and use the bank account.

2.      Already start import or export business.

3.      Permit or authorize the use of patents, trademark designs and other materials in Hong Kong.

4.      Allow or authorize the use of movable property in Hong Kong to collect rent, lease fees, etc.

5.      Obtain other profits derived or generated in Hong Kong.

6.      Have hired employees in Hong Kong.

7.      Start purchase or sales.

8.      Entrusted to do business in Hong Kong

The consequences of Hong Kong companies failing to file tax returns

l        One time overdue, it will be fined for HK$1200 .

l        Second time overdue, it will be fined for HK$3000.

l        Will receive court summons.

l        Compulsory tax deduction or freezing of bank accounts.

l        Company is forcibly cancelled.

l        Directors are blacklisted and imprisoned for a maximum of 6 months

Documents required for the auditing:

1.      Bank statements, balance sheet and cash flow.

2.      The accounting record of the fiscal year (including contracts, expense invoices, receipts or other business supporting documents, etc.).

3.      The list of affiliated company and affiliated persons (if any).

4.      BR / CI / NAR1 and other register information of the company.

5.      Shareholder, director’s identification details.