Hong Kong Limited Companies must submit the Annual Return (Form NAR1) to the Companies Registry annually to update their latest information and ensure the timeliness and accuracy of their public records. This document is essential for maintaining compliance, supporting bank account opening, or applying for government funding, and failure to submit it on time may result in substantial fines. This article provides a comprehensive analysis of the Annual Return, covering its definition, content, purpose, submission methods, fees, deadlines, and penalties for late submissions. It also offers practical advice and guidance on common pitfalls to help new business owners easily navigate the filing process.

What is the annual return?

Under the Companies Ordinance of Hong Kong, the annual return is a mandatory annual filing document for Hong Kong companies. It records updated information as of the company’s anniversary date, including registered office address, shareholders, directors, and company secretaries. This document primarily serves to update the Public Records of Companies, ensuring transparency and accuracy of corporate information, and is a crucial compliance requirement.

What is the purpose of the annual return form?

The annual return is not only a legal requirement but also a vital tool for maintaining corporate credibility and ensuring smooth business operations. The Companies Registry allows anyone—whether potential investors, business partners, or the public—to check a company’s structure and latest operational status. This helps companies demonstrate compliance, fostering business trust while preventing business disruptions caused by incomplete records.

As a new business owner, the primary purposes of assisting your company in filing the annual tax return include:

  • open a bank account
  • bank loan
  • conversion of shares
  • share consolidation
  • audit of financial statements
  • Apply for government funding
  • license application
  • Business activities (signing of commercial contracts)
  • Any documents required to verify the identity of company shareholders, directors, and the company secretary
What information should be included in the annual return?

When completing the NAR1 form, the company must accurately provide the following information as of the filing date:

  • Company name and business registration number: The legally registered name at the time of company registration must be provided. Starting from December 2023, the NAR1 form requires an 8-digit business registration number (Unique Business Identification Code). Note that the old company registration number is no longer applicable.
    • Registered Office Address: The registered office address in Hong Kong is used to receive official correspondence and legal documents.
  • Share structure (if applicable): including authorized share capital, total number of issued shares, par value of each share class, voting rights, shareholder ownership percentages, and annual shareholding changes.
  • Details of the company’s directors and secretary: including name, ID number, and contact information.
  • Shareholder register and information: including name, shareholding percentage and mailing address.
  • Company records: Specify the storage address for company records.

For private companies, the annual return does not require the inclusion of financial statements, income statements, or cash flow statements (these fall under tax filing or auditing). However, listed companies or guarantee limited companies may also need to submit certified financial statements, director reports, and audit reports.

Which companies are required to file annual returns?

All Hong Kong-registered limited companies, including private limited companies (whether locally or overseas registered), listed companies, and guarantee limited companies, are required to file annual returns. Listed companies or guarantee limited companies may also need to submit additional financial documents and comply with specific financial reporting requirements.

The following types of companies are exempt from submission:

  • Inactive Companies: Companies officially designated as “inactive” (i.e., those with no significant accounting transactions such as asset sales or share transfers) may apply for exemption from annual tax returns. However, such companies must submit an “Inactive Company Declaration” and obtain approval from the Companies Registry. Upon resuming activity, they must resume submitting annual tax returns.

Dissolved or deregistered companies: If a company has completed liquidation or been deregistered by the Companies Registry, there is no need to submit the annual return.

When should the annual return be submitted?

The deadline for submitting the annual return depends on the company type and the date of incorporation:

  • Private Limited Company: The submission must be made within 42 days from the anniversary of the company’s establishment.
  • Listed companies and guarantee companies must submit the required documents within 42 days after the annual general meeting or within 6 months from the company’s anniversary date, whichever is earlier.

Note: Even if there are no changes in company information or no business operations, the annual return must be submitted on time. There is no extension for the annual return submission, and the company must complete the submission before the statutory deadline.

How to submit the anniversary return?

Companies can choose to submit their annual tax return in paper or electronic format. The paper format is suitable for businesses unfamiliar with the electronic platform or those needing to provide a large number of paper attachments, but it is time-consuming to submit and process, and may be returned due to formatting errors. Electronic submission is efficient, convenient, and cost-effective, and the submission status can be confirmed immediately.

  • Paper submission: Submit the completed NAR1 form and the correct annual registration fee by mail or in person to the Companies Registry (Address: 14th Floor, High Building, Government Complex, 66 Golden Bell Road, Hong Kong). If paying by cheque, please write ‘Companies Registry’ on the cheque.
  • Submit electronically: Fill out the form online and pay the annual registration fee through the e-Registry website of the Companies Registry.

In addition to submitting annual tax returns on time, companies must also maintain proper financial records, invoices, and expense management in daily operations to comply with tax and audit requirements. For small and medium-sized enterprises (SMEs), these tasks are often time-consuming and error-prone. As a result, an increasing number of companies are adopting professional online accounting software to automate financial processing and report generation, significantly reducing administrative burdens and allowing new business owners to focus on business development.

What is the fee for submitting the annual return?

The fee for submitting the annual return varies depending on the company type and submission method:

  • For private limited companies: The standard fee for electronic submission is approximately HK$105, while the fee for paper submission is slightly higher.
  • Listed Company and Guarantee Co., Ltd.: Additional fees may apply as per the attached documents.

However, any local private company failing to file its annual return within the 42-day deadline will be in breach of the Companies Ordinance and may face a fine ranging from HK$870 to HK$3,480. The company secretary and directors may also face prosecution, with a maximum penalty of HK$50,000.

Conclusion and Action Recommendations

Timely submission of annual tax returns is a critical step for Hong Kong companies to ensure compliance. To avoid cumbersome procedures and late fees, businesses can outsource the process to professional accounting firms for efficient management and simplified formalities. Compass Hong Kong provides comprehensive accounting and bookkeeping services, helping you meet requirements for accounts, balance sheets, and document submissions. From daily accounting to year-end operations, we offer one-stop solutions.

Contact Compass immediately to assist you in completing your annual tax return, ensuring all information complies with regulations and is submitted on time, so you can focus on your business without any worries!

frequently asked questions

Which companies are required to file annual returns?

All Hong Kong-registered limited companies (private, listed, or guaranteed) must submit their annual returns on time each year, except inactive companies and those that have been dissolved or deregistered.

Who submits the annual return?

As stipulated in the Company Ordinance, the annual return form must be completed and signed by the company’s director or secretary before submission in paper or electronic format. The annual return is submitted by the company’s secretary or authorized representative, typically handled by a company secretary service provider.

What are the consequences of late submission?

A private limited company must submit its annual report within 42 days after the company’s anniversary. For listed companies and guarantee limited companies, the submission deadline is either 42 days after the annual general meeting or 6 months after the anniversary (whichever is earlier).

Failure to submit the annual return within the deadline may result in a fine ranging from HK$870 to HK$3,480, with the penalty accumulating over time and potentially reaching tens of thousands of Hong Kong dollars. Those responsible, such as directors or the company secretary, may also face surveillance and legal consequences.

Should I use the company registration number or the business registration number when filling out the form?

As of December 2023, the NAR1 form requires the use of an 8-digit business registration number (Unique Business Identification Code), replacing the previous company registration number.

What are the common mistakes when filling out forms by yourself?

When completing annual tax returns, many companies make errors due to unfamiliarity with the process, resulting in rejected forms, late fees, or legal consequences. Common mistakes include:

  • Incorrect identification number: From December 2023, an 8-digit business registration number must be provided instead of the previous 7-digit company registration number.
  • Inaccurate or outdated information: Company details must reflect the latest status as of the filing date (usually the anniversary of establishment). Any changes within the year that are not noted in the form or do not match the company records will be considered false filings, leading to fines or investigations.
  • Mistaken submission deadline: Private Limited Companies must file within 42 days after the anniversary date of incorporation. However, many people confuse this with the end of the fiscal year or the tax filing deadline, resulting in late submissions. Remember: The deadline is based on the company’s incorporation date, not the fiscal year.
  • Ignore signature or attachment requirements: The NAR1 form must be signed by a director or the company’s secretary (digital signatures are required for electronic submissions). Public companies or guarantors must also attach audited financial statements and director reports. Self-service companies often overlook this step, resulting in submission failures.
  • Incorrect submission deadline: Many self-service companies opt for paper submissions, which often result in delays or formatting errors, ultimately causing late submissions.