Last update: January 2025
The contribution and involvement of shareholders are crucial in not just the incorporation but also the successful operation of a business. Shareholders are one of the deciding authorities of company management. If a shareholder wishes to transfer their shares, or the company decides to transfer a share among existing shareholders, they must follow a checklist of items. If you are a shareholder wondering how the transfer of shares in Hong Kong companies works, what documents you must submit for a share transfer in Hong Kong, or the timelines for payments and details regarding stamp duty for a share transfer in Hong Kong, you must read this article.

Transfer of shares in Hong Kong Companies
Shareholders hunt for options to transfer ownership of shares for varied reasons. Sometimes the company may decide to transfer shares from one to another, depending on the fluctuations in profits or ownership. Before initiating a share transfer, you must thoroughly understand any limitations or restrictions within the company’s Articles of Association (AoA). You can find these guidelines in the Articles of Association.
Understand the transfer of shares
Transfer of shares in HK Companies happens when a shareholder wishes to sell his shares in a company (usually referred to as a transferor), to another shareholder or entity (referred to as the transferee) either as a result of individual concerns or under the influence of the company.You must thoroughly understand any limitations or restrictions in the AoA before initiating the share transfer procedure.
The company must also pass a resolution regarding the share transfer through a meeting and get approval from all the other shareholders of the company. The share transfer can take place between one shareholder and another or one shareholder to a third party. The members involved in the share transfer in HK must be wary of the pre-emptive rights of all shareholders, liabilities, and finances of the company in consideration.
Why transfer shares in an HK company?
A shareholder or company may transfer ownership of shares in one or many of the following cases.
- A company may wish to raise more capital
- The company may be undergoing a restructuring process
- The company plans to remove a shareholder
- Changes in profit generation or ownership is likely to happen
- A company may cease to exist
- One of the shareholders leaves the company or dies
- There may be plans to sell the company
- The share may be gifted to another person like a spouse or legal relative
- The company goes through a period of bankruptcy and wants to sell shares in return for cash
- The company wishes to add a new partner to the business
Limitations of share transfer in HK companies
The Companies Ordinance directs the transfer of shares procedures with certain limitations. The regulations should be studied and promptly followed to avoid penalties. For example, according to section 47, when someone sells a share, the concerned company cannot provide any assistance. If such a situation arises, the company should take up a solvency test to qualify to offer help. Even if the solvency test is positive, the company can offer not more than 5% of the amount in the shareholder’s fund.
Another member with at least 5% voting rights and is a representative body of the organization, can seek help to cease the financial assistance. In some cases, the company directors may want to refuse the share transfer in HK. Then, the company, according to section 151 of the Companies Ordinance, should notify the transferor and the transferee in two months. If the transferee needs a reason for the refusal, he can request a statement of reasons in the next 28 days. Failing to produce these details on time may cause the companies and all their members to pay penalties of up to HKD25,000 and HKD700 as a fine per day.
How to transfer shares in Hong Kong companies?
You can transfer shares in HK companies by maintaining accurate reports and financial records and adhering to the legal requirements of share transfer in HK. Firstly, you must be vigilant of conforming to the restrictions and limitations in the AoA. You must then file appropriate documentation for share transfer. These documents include the accounts, resolutions, agreements, and liabilities. After the HK government reviews and approves the files, you will receive the share certificate.
It can be exhausting to get all the audits and reports in order. Seeking the assistance of a professional service provider can help lessen the burden of share transfer.
Required document to transfer shares in Hong Kong
The most imperative part when you transfer ownership of shares is to file the essential documents meticulously. These documents should be submitted to the Inland Revenue Department (IRD). The following are the prerequisites to share transfers in a company.
- A letter seeking approval to transfer shares
- The most recent audit report (of the last 6 months)
- In the occasion of a missing audit report, you can produce a management account (of the last 3 months)
- The identity proofs of the new shareholder (residential address, ID cards, passport)
- The name of the transferor
- The count of shares
- Share certificate
- Company resolution (containing the data regarding dividend distribution)
- The details of land property
- The Sales and Purchase Agreement (Equity Transfer Agreement)
- The audit reports of the company branches or certified management accounts
- The Articles of Association
- Sold and Bought notes
- Consent forms of all the shareholders in the company
- Stamp duty
- Share transfer fees
Time frame for processing a share transfer in Hong Kong
Depending on the prompt availability of required documents and approval, the entire process of share transfer will take only 3 to 5 business days. You have to collect vital information concerning all the accounts, documentation, and agreements. Then draft the Sold and Bought notes to ensure the standard transfer of shares procedure. The transferor and transferee then sign the files. You then complete the stamp duty procedures and update all records for Companies Registry approval.
After the approval, you must notify the CR about the details of all the directors, members, shareholders, and the number of shares in a month. If this rule is violated or the notification is delayed, the CR has the power to reject the approval. If you still wish to proceed further, you can only do it with the help of the court.
Transfer of shares procedure in Hong Kong
As stated by the Companies Ordinance (section 11), there are three main restrictions found in the Articles of Association. The transfer of shares in HK companies needs the approval of all the directors of the company. The directors’ refusal is a major concern in the share transfer. The pre-emptive rights discussed in the AoA demand that the existing shareholders should be approached first for the share transfer. There are three main steps involved in the transfer of shares procedure. Read on to know what they are.
Step 1: Pre-transfer
Before transferring shares in Hong Kong, you must ensure you fulfill all share transfer provisions. You must also draft and prepare all relevant share transfer forms and agreements. Regarding transfer of shares stamp duty, you must ensure all related regulations are met.The official proofs of share transfer are crucial in the process.
- Sign advance notice and sale agreements- The agreement between the transferor and transferee, must contain information about the names of the parties involved, the number of shares, the price of every share, the date of the transfer, and the signature of both parties. The transferor must send all the information to the shareholders of the company to proceed with the pricing and stamp duty procedures.
- Let the shareholders know about preemptive rights– the transfer of shares in HK companies must first be discussed with the existing shareholders. The shareholders of the company shall decide if they want to purchase the shares. Only upon their refusal can a share be purchased by a third party. You must ensure that all the members concerned are aware of such preemptive rights before you wish to transfer ownership of shares.
- Get shareholders’ consent– it is important to get written consent from every shareholder. This can be decided by raising a resolution in a general or annual meeting. Without the consent of every shareholder, you cannot go forward with the transfer of shares procedure.
Step 2: Application
In Hong Kong, you must submit the application for the transfer of shares to the Companies Registry. After receiving the approval, you will receive a share transfer form. Both the transferor and the transferee must sign the documents before you send them for share ownership verification. Once the verification is approved, you will receive the share certificate.
Step 3: Post-transfer
The changes after the share certificate are issued must immediately be reported to the Companies Registry. The directors will also update all the company members regarding the transfer of shares within 2 months.
Tax implication on the transfer of shares in Hong Kong
There are a few taxes levied during the share transfer in HK. Profit tax is incurred when a certain amount of profit is generated from selling the shares. Stamp duty is an allowance levied on sales documents when a stock is purchased or sold. Stamp duty tax is the most common type of tax levied during share transfers. Read on to know more about it.
What are stamp duty and fees?
The Stamp Duty ordinance defines stamp duty as a tax incurred during the sale or purchase of a stock. The rate of stamp duty applied to the transferor and transferee is 0.1% each. In Hong Kong, you must pay a standard fee of HKD 5 plus 0.2% of the considered sale price or net value for stamp duty share transfer. For purchases or sales outside of Hong Kong, you must make the payment within 30 days.
Penalties for late stamp duty
You must pay stamp duty within 2 or 7 days (depending on the scenario) of the share transfer. If you resolve a late payment within one month, you must pay a penalty of double the stamp duty. If you resolve the payment within two months, you will incur a penalty of four times the stamp duty. For any longer delays, you will incur a penalty of ten times the stamp duty. We recommend keeping updated audit reports and account management records readily available to save time and effort.
How can Startupr help with the share transfer procedure in Hong Kong?
Startupr ensures all your company documentation and share details comply with the laws of share transfer in HK. You will never have to wonder what your stamp duty fee is going to be or get worked up in your mind about the deadlines because we have a qualified team of experts to guide you through incorporation to share transfer procedures with precision and accuracy. You can leverage our Eqvista tool for issuing shares online. It is less time-consuming, easy to use, and accurate. Count on Startupr to never miss a deadline. Not sure how to begin? Set up a free consultation call with us and get your queries resolved.
FAQ
We prepared most frequently asked questions for you. Do not hesitate to contact us, if you have more questions.
What is the duty on share transfer?
When transferring shares, you’ll encounter stamp duty obligations. For physical share transfers, meaning those done with paper certificates, the duty is 0.015% of the shares’ total market value. Regarding bonus shares, the stamp duty is determined by their market value, factoring in the price or consideration related to their issuance.
Can you transfer shares internationally to Hong Kong?
Yes, you can transfer shares internationally to Hong Kong. For more details contact our specialist.
How long does it take for shares to be transferred?
With all documents readily available, the process usually takes 3 to 5 business days.
Can a company refuse a share transfer?
Yes, company directors can refuse a transfer, but they must provide written notification within two months, and upon request, a statement of reasons within 28 days. Failure to do so can result in penalties.
What documents are required to transfer shares in Hong Kong?
Essential documents include a share transfer approval letter, recent audit/management accounts, identity proofs of the transferee, share certificates, company resolutions, sale and purchase agreements, and shareholder consent forms.
Do I need a professional service provider to help with the share transfer?
While not mandatory, a professional service provider can simplify the process, ensure compliance, and reduce the burden of handling complex documentation.
What taxes are involved in transferring shares in Hong Kong?
The primary tax is stamp duty, which applies to the sale or purchase of shares. There may be other tax implications, so consulting a tax advisor is recommend. it is very important to note that hong kong does not impose capital gains tax.