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IRD Reminds HK Businesses Of Registration Requirements

Friday, June 8, 2012

A notice issued by Hong Kong’s Inland Revenue Department (IRD) on June 6, 2012, has drawn taxpayers’ attention to certain matters under the Business Registration Ordinance.

For example, except for those specifically exempted, every person carrying on a sole proprietorship or partnership business in Hong Kong must register his or her business within one month of commencement of business. The IRD will not accept any applications for registration of businesses which have never existed or have yet to commence operation.

Any person applying for incorporation of a local limited company, or registration of a non-Hong Kong company under the Companies Ordinance, is deemed to apply for business registration at the same time. The applications for business registration of these companies must be submitted to the Companies Registry.

In addition, local limited companies are required to notify the Business Registration Office (BRO) of IRD in writing within one month of the date of commencement of the business their business name, description and nature of business, business address and date of commencement of business.

BRO will issue business registration renewal demand notes to registered businesses about one month before their current business registration certificates expire. If business operators do not receive such renewal demand notes, they must still inform BRO in writing within one month of expiry of their current business registration certificates. IRD may impose penalties if renewal demand notes are overdue.

However, business registration is not a licence to trade. The applicant may also need to apply for other types of licences or obtain the recognised professional qualifications for operating certain kinds of business. The issue of business registration certificate or branch registration certificate in respect of any business does not imply that the requirements of any law in relation to such business have been complied with.

Apart from companies incorporated or registered under the Companies Ordinance, businesses may apply for exemption from payment of the business registration fee and levy if its profits are mainly derived from the sale of services and its average monthly sales/receipts do not exceed HKD10,000 (USD1,290); or, in other cases, its average monthly sales do not exceed HKD30,000. If two or more businesses are carried on by the same proprietor or partners, none of these businesses is entitled to exemption.