Hong Kong Private Company - Procedures and Fees for Transfer of Shares
Unless otherwise indicated, the private company mentioned anywhere in this quotation refers to a private company limited by shares incorporated in accordance with the Hong Kong Companies Ordinance.
Summary
When a shareholder of a Hong Kong registered private company transfers part or all of his shareholding to other shareholders or any other third party, a set of share transfer documents must be signed by both the transferor and transferee and presented to the tax authority for stamping and also pay a stamp duty calculated based on the consideration or net assets of the company. Then a new share certificate is issued to the new shareholder and his name be entered into the Register of Members.
Our fees for handling the transfer of share(s) of a private company registered in Hong Kong are HKD2,500 for the first transfer and HKD1,500 for the second and thereafter. Our fees cover the preparation of share transfer documents (other than share transfer agreement), arrangement to have the documents stamped and payment of stamp duty etc.
The process for transfer of share normally takes 2 to 3 working days, started from the day we receive the duly signed transfer documents. Same day service is available for an extra service fee of HKD1,000.
A transfer of share(s) is not required to be registered with the Companies Registry and therefore the change of shareholder is not readily available for public inspection in the Companies Registry. Instead, any such changes are reflected in the next Annual Return.
If the share transfer is a transfer between members within a group of companies, stamp duty on the transfer can be exempted upon application. Kaizen can handle the application for exemption upon request.
1. Services and Fees for Share Transfer
Our fees for handling the transfer of share(s) of a private company registered in Hong Kong are HKD2,500 for the first transfer and HKD1,500 for the second and thereafter. The fees quoted above cover the following services in particular:
(1) Review Articles of Association of the subject company and the Register of Members;
(2) Prepare Minutes of Directors’ Meeting and Share Transfer Instrument and Bought and Sold Note;
(3) Arrange to have the Transfer Instrument and Bought and Sold Note executed and stamped by the Hong Kong Stamp Duty Office and payment of Stamp Duty;
(4) Arrange to cancel the old share certificate held the existing shareholder and issue new share certificate to the new shareholder (and existing shareholder);
(5) Update the Register of Members;
The transfer of shares from one shareholder to another person is counted as one transfer. The transfer of shares from one person to two persons or from two persons to one person are counted as two transfers.
Please note delivery charge and stamp duty are not included in the fees stated above. A detailed illustration of the calculation of stamp duty is provided in Section 4 of this quotation.
2. Documents and Information needed to be Provided by Clients
In order to enable us to prepare the documents for transfer of shares, we need to have the following information and documents:
(1) A copy of Articles of Association of the subject company;
(2) The latest Register of Members;
(3) The amount of shares to be transferred and the value of consideration;
(4) The name of the seller (Transferor);
(5) A copy of the passport or identity card and residential address of the new shareholder (transferee);
(6) The original copy of the share transfer agreement, if any;
(7) A copy of the latest audited financial statements (and/or latest management accounts).
If Kaizen is acting as company secretary and auditor of your Hong Kong company, then you only need to prepare items (4), (5) and (6).
3. Procedures and Time Frame for Share Transfer
The process for share transfer takes 2 to 3 working days. The process works like this:
(1) Client provides the information and documents required for the transfer;
(2) Kaizen prepares the Instrument of Transfer and Bought and Sold Note and minutes and other transfer documents;
(3) Kaizen then arranges the transferor and transferee to sign the transfer documents;
(4) Kaizen delivers the transfer documents together with the supporting documents to the Stamp Duty Office for execution and payment of stamp duty;
(5) Kaizen then prepares new share certificates and update the Register of Members and deliver the two set documents to client.
In any case that the client (both the transferor and transferee) could come to our Hong Kong office to sign the share transfer documents, the whole process could be done in one day with our Rush Service fee.
4. Calculation for Stamp Duty
The amount of stamp duty to be paid is calculated as following:
(Amount of Consideration (or net assets of the subject company x % of interest to be transferred) x 0.1%) x 2 + HKD5
For example, if the subject company has net assets of HKD10,000, and the percentage of interest to be transferred is 50%, then the amount of stamp duty payable by each transferor and transferee would be:
(HKD10,000 x 50% x 0.1%) x 2 + HKD5 = HKD105
5. Documents to be Returned to Client after Processing
The following documents will be returned to client as proof of transfer:
(1) Stamped Instrument of Transfer and Bought and Sold Note
(2) Updated Register of Members
(3) Updated Register of Transfers
(4) Board Minutes authorizing the transfer(s)
(5) Share certificate(s)
If you wish to obtain more information or assistance, please visit the official website of Kaizen CPA Limited at www.kaizencpa.com or contact us through the following and talk to our professionals:
Tel: +852 2341 1444
Mobile: +852 5616 4140, +86 152 1943 4614
WhatsApp/ Line/ Wechat: +852 5616 4140
Skype: kaizencpa
Email: info@kaizencpa.com
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