Question 1

Do Hong Kong companies need to keep accounting records?

Accepted Answer

Yes. Under the Companies Ordinance, all Hong Kong companies must maintain proper accounting records that accurately reflect their business transactions and financial position.

These records must be sufficient to prepare annual financial statements, including the balance sheet, profit and loss account, and supporting schedules, in accordance with Hong Kong Financial Reporting Standards (HKFRS). Records should generally be retained for at least 7 years.

Question 2

What accounting services do Hong Kong companies typically require?

Accepted Answer

Most Hong Kong businesses, including startups, SMEs, and entrepreneurs, choose outsourcing for some or all of their accounting needs, rather than managing an in-house accounting team.

Typically, they will require these services: Bookkeeping services and transaction reconciliation Preparation of annual financial statements (audited or unaudited) Profits Tax Return filing Ongoing compliance support, including IRD correspondence Periodic management accounts for internal decision-making

The exact scope depends on transaction volume, business needs, and tax position.

Question 3

What is the difference between an accounting period and a tax period?

Accepted Answer

An accounting period is the financial period covered by your financial statements, usually 12 months, used to prepare reports such as the balance sheet and profit and loss account.

A tax period is the period assessed by the Inland Revenue Department (IRD) for profits tax purposes. In most cases, both periods align.

Question 4

Do I need accounting software to run my company?

Accepted Answer

Accounting software is not legally mandatory, but it is highly recommended.

Most accounting firms use an accounting system to manage bookkeeping, generate financial statements, and ensure compliance. At Statrys, we work with modern accounting software and support integrations such as Xero, depending on your business needs and reporting complexity.

Question 5

What information must be included on a sales invoice?

Accepted Answer

A compliant sales invoice should include: Invoice date and unique invoice number Customer name and address Description of goods or services Amount per line item and total payable Payment terms and payment method

Hong Kong companies may use their registered address on invoices. Proper invoicing supports accurate bookkeeping and reliable financial data.

Question 6

What types of expenses are tax-deductible in Hong Kong?

Accepted Answer

Expenses are deductible if they are incurred wholly, exclusively, and necessarily in producing assessable profits. Common deductible expenses include: Staff salaries and MPF contributions Office rent and utilities Professional fees (including accounting and legal services) Marketing, travel, and business-related costs

All expenses must be supported by proper documentation and retained as part of your accounting records.

Question 7

How often is bookkeeping done — monthly or annually?

Accepted Answer

This depends on transaction volume and business complexity.

Most active companies benefit from monthly bookkeeping, which keeps financial records up to date and supports timely reporting. Lower-activity companies may opt for periodic or annual bookkeeping, provided records remain complete and accurate.

We recommend an approach aligned with your business needs.

Question 8

What documents do I need to provide for accounting and tax filing?

Accepted Answer

Typically, you’ll need to provide: Bank and credit card statements Sales invoices and expense receipts Payroll records (if applicable) Contracts or supporting documents for significant transactions

These documents form the foundation of accurate bookkeeping and reliable financial reporting.

Question 9

Can I keep my company bank account active if my business is temporarily inactive?

Accepted Answer

Yes. If your business is temporarily inactive, shareholders or directors may inject funds as a shareholder loan or capital contribution. These funds are not treated as revenue if properly recorded.

Question 10

What is the difference between an Annual Return and a Profits Tax Return?

Accepted Answer

Annual Return (AR) is filed with the Companies Registry to update corporate details and must be filed within 42 days of the incorporation anniversary. The deadline cannot be extended.

Profits Tax Return (PTR) is filed with the IRD to report income, expenses, and assessable profits. Filing deadlines depend on your financial year-end and may be extendable in some cases.

Question 11

What happens if I miss a tax filing deadline?

Accepted Answer

Late filing may result in: Fixed penalties (starting from HK$1,200) Additional fines or surcharges Estimated tax assessments issued by the IRD

In limited first-time cases, penalties may be waived, but this is not guaranteed.

Question 12

What is the profits tax rate in Hong Kong?

Accepted Answer

Hong Kong operates a two-tier profits tax system: 8.25% on the first HKD 2 million of assessable profits 16.5% on profits exceeding HKD 2 million

The final tax payable can only be determined once your annual financial statements are completed.

Question 13

Do companies need to reply to Employer’s Returns if they have no staff?

Accepted Answer

Yes. The IRD may issue an Employer’s Return (Form 6N1) even if no employees are engaged. In such cases, the form must still be completed with “nil” figures and submitted by the deadline.

Question 14

Will the IRD issue a Profits Tax Return every year?

Accepted Answer

Not always. In some cases, the IRD may issue a notice stating that Profits Tax Returns will not be issued annually. However, companies must still notify the IRD if assessable profits arise and maintain proper records for at least 7 years.

Question 15

Do all Hong Kong companies need to prepare audited financial statements?

Accepted Answer

Yes. Most Hong Kong incorporated companies are required to prepare audited financial statements each financial year, regardless of company size or revenue.

Question 16

Can a Hong Kong company apply for offshore tax exemption?

Accepted Answer

Yes, but offshore status is not automatic.

Companies must apply when filing their Profits Tax Return and demonstrate that profits are sourced entirely outside Hong Kong. The IRD typically reviews offshore claims 1–2 years later through detailed enquiries or audits.

Question 17

Does paying dividends into a Hong Kong bank account affect offshore status?

Accepted Answer

No. Dividend payment location does not determine offshore status.

What matters is where profits are generated and where business activities take place, not where dividends are received.

Question 18

Are there additional fees for offshore tax claim support?

Accepted Answer

Yes. Offshore claims often involve additional work, especially when the IRD issues follow-up enquiries. Additional fees may apply for handling IRD correspondence, preparing explanations, and supporting audits, depending on case complexity.

Question 19

How are Statrys’ accounting fees calculated?

Accepted Answer

Our accounting fees are based on the actual number of accounting-related transactions processed each month, not on revenue bands or projected turnover.

We calculate fees according to the real bookkeeping workload generated by your company’s activity.

Transactions counted for accounting purposes include: Payment card usage fees Account opening and account maintenance fees Amendments to payments Administrative charges (e.g. document printing, card delivery, ad-hoc service requests) Company renewal fees Company switching fees Other CC-related service fees Monthly accounting fees Volume-based fees Incoming transfer fees Intermediary bank fees Transfer fees

Transactions that are NOT counted include: Any transaction with a $0 value Transactions occurring purely within the FX account

This transaction-based structure ensures your fees reflect the actual accounting work required to maintain your books and compliance.

Question 20

Can I switch to Statrys from my existing accounting firm?

Accepted Answer

Yes. We coordinate directly with your existing accounting firm to collect records and ensure a smooth transition.

Your dedicated accountant will manage the handover process so there is no disruption to bookkeeping, tax filing, or compliance.

Question 21

Do I still need accounting services if my company has no activity?

Accepted Answer

Yes. Even if a company has no revenue or transactions, it is still required to: Maintain accounting records Prepare financial statements (often “nil” accounts) File statutory returns and tax filings

Compliance obligations continue unless the company is formally dormant or deregistered.

Question 22

What happens after audited financial statements and tax returns are filed?

Accepted Answer

The usual process is: Acknowledgement of submission by the IRD Issuance of a Notice of Assessment (NOA) Payment of profits tax by the specified deadline

Any objections or follow-up enquiries must be addressed within the IRD’s timelines.

Question 23

Who is responsible if there is an error in the accounts or tax filing?

Accepted Answer

Directors remain legally responsible for the accuracy of the company’s accounts and filings.

That said, Statrys: Applies professional standards across our accounting team Uses structured review processes Supports IRD enquiries and corrections where required

Clear communication and accurate source information are essential for compliance.

Question 24

How do accounting and corporate secretarial services work together?

Accepted Answer

Accounting and corporate secretarial work are closely linked.

Corporate secretarial services handle statutory filings under the Companies Ordinance (such as Annual Returns and director changes), while accounting focuses on financial reporting, audits, and tax compliance.

At Statrys, these services work together under one roof, ensuring consistency across filings, records, and regulatory obligations.

Accounting & Tax Services Hong Kong

Accounting 101: Financial Year, Statutory Requirements & Deadlines

Hong Kong’s Statutory Deadlines

Audited Financial Statements & Profits Tax Filing

Offshore Tax Claims

Ad-Hoc Support: Management Reports & One-Off Needs

Flexible Pricing Plans That Scale With Your Business

Not sure which tier fits your business?

Why Choose Statrys Accounting?

Actively Manage — and Reduce — Your Accounting Fees

No Access Fees. Pay Only What You Use

One Provider. One Platform. Full Visibility.

Regulated. Qualified Professionals

Free Invoicing Software

What Clients Say About Statrys

Hong Kong Accounting & Offshore Tax Guides

How to Reduce Corporate Tax to 0% (Hong Kong Re-Invoicing Structure Explained)

Hong Kong Accounting Standards: All You Need to Know in 2026

The Audit Report in Hong Kong: Requirements & Types

How Your Onshore Company is Taxed in Hong Kong

How the IRD Audits Offshore Tax Claims (and How to Prepare)

Offshore Tax Exemption in Hong Kong: How It Works & How to Qualify

Hong Kong Corporate Tax Rate in 2026: Rates, Incentives, and Filing Requirements

What Counts as ‘Substance' for Offshore Tax Claims in Hong Kong?

Frequently Asked Questions

Do Hong Kong companies need to keep accounting records?

What accounting services do Hong Kong companies typically require?

What is the difference between an accounting period and a tax period?

Do I need accounting software to run my company?