Dormant Company in Hong Kong

Last update: October 2026

Do you want to keep your company on hold for a particular reason without actually closing it? Or do you want to take some time getting things settled before drumming up your new business with the minimal cost possible? Then all you should know about is a Dormant Company in Hong Kong.

If you regulate one or multiple companies, you may wish to put the business on hold for some reason, or you might even want for some rest after some hectic trading. Either way, having a dormant company may allow you to do that. This article will help you get to the heart of what the dormant company in Hong Kong is all about.

What is a Dormant Company?

A company is considered as a Dormant company when there are no accounting transactions during a year, which is legally approved to cease doing its business activity for a temporary period but the company remains registered.

Most companies apply for inactive status or a dormant status so that they can save both time and money involved in filing annual returns, holding annual general meetings, appointing auditors and preparing audited financial statements.

To grasp the concept of a dormant company under Hong Kong jurisdiction, the person needs to fully understand what “no accounting transactions” means. Basically, an accounting transaction is recorded in the accounting record of the business. The Companies Ordinance allows a company to declare itself as dormant and continue with the same status for a minimum maintenance cost as long as it does not have any accounting transactions.

The amount the company paid for shares when it was first incorporated is excluded as significant accounting transactions. On the other hand, a genuine dormant company in Hong Kong has officially registered its “inactive” status. It therefore would not enter into any accounting transactions other than the ones that are allowed by the Ordinance. By the same token, a dormant company in Hong Kong is exempt from certain liabilities and can enjoy certain benefits to boot.

Benefits of a Dormant Company in Hong Kong

The major benefit of dormant status is that it helps your inactive company to hold at a minimum maintenance cost. Once the company becomes a dormant company in Hong Kong, it won’t require to comply with some annual obligations. However, in the year in which the company declares itself dormant, the company still has to submit a basic renewal of that year.

Some of the benefits of having a dormant company in Hong Kong are as follows:

To protect the company’s reputation

There are many compelling reasons to establish a dormant company or register a standard company as one. After a company registers to be a dormant company in Hong Kong, it’s inactive status helps signify your brand and safeguard your company’s name.

To hold certain assets

Most investors will save a portion of assets as a part of a balanced portfolio, and many conservative investors may hold the majority of these assets in their collection to ensure capital preservation. Declaring oneself a dormant company in Hong Kong allows a company to have a way of preserving its certain assets or intellectual properties.

To deliberately suspend the operations of the company

If you have no projects to start shortly, then dormancy can help you save on various activities of the company. It would be of great use when you have no legal formalities to complete.

To preserve the company as a legal entity

Maintaining a company at a minimum maintenance cost can be hard. But dormancy helps you do that easily. By becoming dormant, your company is exempt from complying with several legal requirements. Below are a few of them as laid down by the Ordinance:

1. Filing an annual return (Form NAR1)
2. Holding annual general meetings
3. Preparing audited financial statements and appointment or resignation or removal of auditors

To Satisfy Operational Needs: Formally declaring your company as dormant allows you to re-launch your business later at your convenience without having to go through the hassle and expense of incorporating a new company.

How does a company apply for dormancy in Hong Kong?

Due to the pro-business climate and the low taxation regime, entrepreneurs are willing to open a business in Hong Kong. However, in some cases, businesses need to stop for a specific reason. That is where the company needs to apply for dormancy.

A company needs to pass a special resolution authorizing its Director(s) to make and deliver it to the Registrar of Companies. It is a statutory declaration to the effect that the company will become dormant. The directors should file the special resolution with the Companies Registry within 15 days after passing the resolution.

The sole eligibility criteria to become a dormant company in Hong Kong is the no relevant accounting transaction since the date of its incorporation or any date that is specified.

A relevant accounting transaction is defined to include:

• All sums of money received and expended by the company and the matters in respect of which the receipt and expenditure take place.
• All sales and purchases of goods by the company.
• The assets and liabilities of the company.

Dormant companies cannot enter into any sale or purchase of goods or transactions of money. The company can only pay money under a mandatory regime. The company’s managers will continue to engage in their specific work and ensure that the company complies with the requirements that are required to be fulfilled during the dormant period.

Not every company in Hong Kong can become a dormant company

There are certain kinds of companies that are not allowed to claim dormancy. The Ordinance does not apply to a company that is not a private company. Below are certain kinds of companies that are not allowed to declare dormancy:

• An authorized institution as defined in the Banking Ordinance
• A dealer registered under the Commodities Trading Ordinance
• A company having a subsidiary that falls with any of the above eight categories

There are many other kinds of companies that are not allowed for dormancy. You will read more about this below in the upcoming sections.

Regulations and Requirements for Dormant Companies

For any kind of work, regulations are required to ensure the safety and dignity of the workplace. There are specific requirements for the Dormant companies as well which embarks upon the duties of the officer of a dormant company, audit and report exemptions, accounting transactions and the annual compliance requirement for a dormant company.

1. Responsibilities of Officers of a Dormant Company

Even though the company is on hold, officers (directors and company secretary) still have specific statutory responsibilities under the Companies Ordinance. The laws mandate that a dormant company in Hong Kong must:

• Have at least one individual director, one shareholder, a company secretary (holding a valid TCSP License), and a registered address;
• Report any change of company structure and the particulars of the officers to the Companies Registry;
• Renew the Business Registration Certificate (BRC) with the Inland Revenue Department.
• File the Profits Tax Return (if any) issued by the Inland Revenue Department.

2. Audit Exemption and Reporting Exemption

Every year, HK limited companies are required to audit their financial accounts using a practicing CPA. However, a registered dormant company is exempt from preparing financial statements, director reports, and auditor appointments for as long as it maintains zero relevant accounting transactions.

3. Relevant accounting transactions

Section 2 of the Companies Ordinance outlines that any transaction required to be entered in the company’s accounting records breaks dormant status.

• Permitted: Statutory fees required by Hong Kong law (e.g., paying government Business Registration Fees) do not count as an accounting transaction.
• Prohibited: Any bank service charges, merchant account fees, or interest credited directly to the company’s bank account are considered accounting transactions and will cause the company to immediately lose its dormant status.

4. Companies not allowed to claim dormant status

Not every company is allowed to be a dormant company in Hong Kong. A company that is not private or fall within any of the following categories cannot claim a dormant status in Hong Kong:

• Financial institutions as defined in the Banking Ordinance
• Insurers regulated under the Insurance Ordinance
• Trustees registered under the Mandatory Provident Fund Schemes Ordinance
• Corporations licensed under the Securities and Futures Ordinance (SFO)
• Dealers registered under the Commodities Trading Ordinance
• Licensed leveraged foreign exchange traders
• Companies holding a controlling entity relationship with any regulated intermediary, or holding Hong Kong client assets.
• Any subsidiary of the above-mentioned entities during the preceding five years.

5. Cessation of Dormant Status

If you no longer require a dormant company, it is essential to reactivate it formally. The company should cease to be inactive if you wish to recommence your company’s business, or there is an accounting transaction occurring in the company.

After ceasing to be dormant, it will run like a normal company. You could renounce the dormant status and re-activate the business activities by going through pretty much the same procedure as when you applied for it.

If a dormant company enters into an accounting transaction, the company ceases to be a dormant company. The exemption from delivery of annual returns cease to have an effect on and after the date of the accounting transaction.

All the company needs to do to cease dormant status is to pass another special resolution declaring that the company intends to enter into an accounting transaction, and that the directors should deliver the special resolution to the Companies’ Registry for registration. After this, the company will resume its active status.

Investors who ultimately decide that the company is not to continue can choose to de-register it. This means that the legal entity will be closed permanently and removed from the register, which can be done via a voluntary procedure (de-registration) when the company has no debts or using voluntary liquidation.

6. The annual compliance requirement for a dormant company in Hong Kong

Above all, obtaining a dormant status does not suggest that you are qualified for a complete exemption from all responsibilities.

With a dormant company in Hong Kong, you are allowed to lighten the burden of maintaining every little detail in accounting records. All you are able to do is maintain your business at low maintenance costs.

As your company remains a legal entity, there is a routine to follow and some requirements to fulfill, some of which are:

• There must be a registered office and at least one director, one shareholder, and a qualified company secretary (i.e. TCSP Licensee).
• The Registrar must be advised of any changes in the company’s officers or registered office.
• The business registration certificate shall be renewed by paying the required fee to the government.
• The Profits Tax Return shall be filed in case the Inland Revenue Department issues one.

Need any professional help? Contact Startupr!

Now that you have gathered almost all the information and have a better understanding of the importance of a Dormant company in Hong Kong, you will need a helping hand to go through the actual process of becoming a dormant company. In that case, Startupr will assist you with proper guidance.

Startupr puts you first. This is why our primary focus is on Start-ups with global ambitions. Our team provides complete services for company formation in Hong Kong; however, we can also provide the needed assistance for company liquidation as well as de-registration. We will be giving you the details and advice for a better knowledge at each step in making a dormant company in Hong Kong.

As part of our brilliant service, Investors who need more information on how to apply for a dormant status, as well as those who are considering closing their business operations, can contact us for more details.

FAQ

Navigating the complexities of dormant company status can be challenging. To assist you, we’ve compiled a list of frequently asked questions. These answers provide essential information regarding dormancy, from determining a company’s status to reactivation and dissolution procedures.

How do I know if a company is dormant under Hong Kong law?

A Hong Kong company is considered legally dormant when it has passed and filed a Special Resolution with the Companies Registry (CR) declaring zero relevant accounting transactions within the financial year, aside from mandatory statutory payments like Business Registration fees.

How can I dissolve a dormant company in Hong Kong?

If a dormant company is solvent and has no outstanding liabilities or property, it can be dissolved via voluntary deregistration with the Companies Registry and Inland Revenue Department. If complex asset structures exist, a Members’ Voluntary Liquidation (MVL) can be conducted.

Can I restart a dormant company in Hong Kong?

Yes. To reactivate a dormant company, you must pass a Special Resolution declaring your intention to recommence business activities and submit it to the Companies Registry before entering into any accounting transactions. Once active, normal audit and annual return requirements resume.

How do I apply for dormant status in Hong Kong?

Pass a special resolution authorizing directors to declare dormancy, and file it with the Companies Registry within 15 days.

What are considered “relevant accounting transactions” that would prevent dormancy?

Specifically, these include receipts and expenditures of money, as well as sales and purchases of goods, and furthermore, changes in assets and liabilities.

Are there any allowed transactions for a dormant company?

Yes, mandatory payments required by the Companies Ordinance, like business registration fees, are allowed.

What responsibilities do officers of a dormant company have?

Firstly, officers must comply with the Companies Ordinance. Secondly, they must maintain a registered office. Additionally, they must report any changes. Finally, they must renew the Business Registration Certificate.