Jens Krämer

Accounting and Reporting for a Hong Kong Limited

 |  accounting, hong-kong, offshore, business

Nearly a year ago, I started my Hong Kong Limited. Hong Kong is famous for low taxes and ease of doing business, but like everywhere else there are rules and regulations you have to follow in terms of book keeping and submission of documents to various government agencies. This article will deal specifically with accounting, auditing and tax reporting to the IRD.

What needs to be done and when?

The business year in Hong Kong traditionally ends on March 31st., but it’s also possible to use the calendar year, so you’ll either start preparing your reports at the beginning of the year or in April.

While newly formed companies are exempt from reporting during the first 18 months of their existence, I think it is a good idea to still prepare all the things in time so you get an idea about how it works early on.

The whole process consists of two parts - accounting and auditing.

While in theory you can do all the accounting by yourself, you almost certainly should hire an accountant to do that for you. The auditing is mandatory and has to be carried out by an accredited auditor.


I wrote it above and I’ll reiterate it: get a professional accountant.

I’ve been working with Bridges since the beginning and am very happy with their performance, therefore I chose to let them handle this part of my business as well.

How much you’ll have to pay to have everything prepared and ready for auditing depends on the nature of your business and more specifically on the number of financial transactions you have. I just have very few so there’s not much to do and I got away with the minimal fees of about HKD 540 per month at Bridges.

The whole process couldn’t be much easier:

Simply collect everything relevant (sales invoices, expenses / invoices for any purchases made, all bank statements and any contracts / agreements you entered into), scan what’s not already in digital format anyway, put it all together in a ZIP archive and send it over via email1. An accountant at Bridges will then do all the book keeping and get back to you in case of questions.

With a few emails going back and forth for questions and clarifications it took a little bit less than 2 months until I got my accounting report including profit/loss computation, balance sheet, a tax computation and a general ledger with all the details.


After I confirmed the correctness of the accounting report it was submitted to the auditor. The auditing itself took about a month, then I got the auditor’s report by email for proof reading and confirmation. I confirmed and few days later received the final report via FedEx for me to sign and send back. This is the only step where real paper is involved and you actually have to receive and send something by Courier. Bridges did everything to make this as easy as possible, all the pages and places where I needed to sign were marked and very easy to find.

Usually the signed auditing report and financial statements would then be submitted together with the profits tax return form to the IRD. Since my company is still less than 18 months old I didn’t receive such a form yet, so this is it for now.

The price of the audit depends on your company’s turnover in the period. To give you an idea, for less than HKD 1,000,000 turnover the audit through Bridges costs HKD 4,500.

Wrapping it up

Just yesterday I got an email from Bridges to inform me that the bound copy of the audited report (which I’ll have to keep safe for the next 7 years) has been stored in my mailbox waiting for me to pick it up.

The whole thing cost me about HKD 8,000, which is about the same I’d have to pay for similar services in Germany. All in all a reasonable price for not having to do much more than send over my documents by email, respond to a few questions and sign the final report.

If you, after reading this, are considering to form your Hong Kong company through Bridges and/or want them to do your accounting, feel free to mention Jens Kraemer from Electric Things Limited sent you and we’ll both earn a nice discount.

Have any questions? Feel free to ask in the comments and I’ll do my best to help.

  1. Scary huh? Encrypt the ZIP file and tell them the password on the phone, or have them at least download it from Dropbox etc via a secure connection.