Mr. Chen from Shenzhen registered a Hong Kong company in 2019. After two years of handling cross-border payments, he pivoted his business and left the company untouched. In early 2026, he remembered the company and assumed he could simply ignore it—after all, it wasn’t operational.

Upon checking, it turned out that the Business Registration Certificate had expired, the annual return had not been filed for three years, and the tax authority had issued two penalty notices that he never received (since the mailing address was his old one). The company has been placed on the list of businesses with abnormal operations, and transactions on its bank accounts have been restricted. Want to dissolve the company? You’ll have to submit all the audit reports for those three years first.

It was only then that Mr. Chen realized: You can’t just decide to get rid of a Hong Kong company on a whim.

01

Companies that are no longer in use must be disposed of

Hong Kong companies are not like sole proprietorships on the mainland—you can’t just let them ”fade away” if you no longer need them. As long as a Hong Kong company has not been dissolved, its annual compliance obligations will automatically accumulate: annual returns must be filed, the Business Registration Certificate must be renewed, audit reports must be prepared, and profits tax returns must be filed.

Many people who set up Hong Kong companies early on to engage in cross-border e-commerce have either ceased operations or switched to other business entities, leaving their companies in a state of ”abandonment.” If these companies are not addressed, it’s not a matter of saving money—it’s a matter of accumulating debt: fines owed to the government, annual fees owed to banks, and audit reports owed to the tax authorities.

There are actually only two ways to handle this: either request to place the account on hold, or voluntarily close it.

Dormant Status: Suitable for companies that may be used again in the future. Apply to the Companies Registry for inactive company status; once approved, the company is exempt from audits. However, the annual return filing fee (HK$105) and business registration fee (HK$250 during the 2026 promotional period) must still be paid, and the annual return must be filed. Fines for late submission range from HKD 870 to HKD 3,480.

Dissolution: This is done when it is determined that the entity will no longer be needed in the future, and it permanently terminates the entity’s legal status in a single step. Once dissolved, the entity requires no further attention, but the process is more complex than placing it in dormant status.

02

Three-Step Process for Cancellation

To dissolve a Hong Kong company, you can’t simply say, ”I’m done,” and call it a day; you must follow the statutory procedures. The key document is called the ”Notice of No Objection to Dissolution”—without it from the Inland Revenue Department, the Companies Registry will not process the dissolution application.

Step 1: Internal liquidation.Convene a shareholders’ meeting to pass a resolution to dissolve the company. Confirm that the company has no outstanding debts, no pending litigation, and no unresolved tax matters. If there are any bank accounts, settle the balances and close the accounts first. Many people run into trouble at this step—they assume that as long as there are no debts, everything is fine, only to find that a balance of a few dozen Hong Kong dollars remains in a bank account, which then halts the dissolution process.

Step 2: Apply to the tax authority for a notice of no objection.Fill out Form IR1263 and submit it to the tax authority along with the resolution to cancel the shareholder’s registration. The tax authority will check whether you have any outstanding tax liabilities, unfiled tax returns, or unaudited financial statements. If you have outstanding audits from previous years, you must complete them first and obtain the audit report before the tax authority will issue a ”no objection” notice.

Step 3: File an application for deregistration with the Company Registry.After receiving the Notice of No Objection to Deregistration from the Inland Revenue Department, complete Form NDR1 (Application for Deregistration) and submit it to the Companies Registry along with the notice and the shareholders’ resolution. Once the Companies Registry accepts the application, it will publish a notice of deregistration in the Hong Kong Gazette for a period of three months. If no objections are raised during this period, the Companies Registry will issue a formal notice of deregistration, and the company’s legal entity status will be terminated.

03

Don't wait until you're forcibly expelled.

Many people think, ”If I don’t deregister, what can the government do to me?”

The answer is: The government will help you deregister the company, but the consequences vary. According to the 2026 Rules of the Companies Registry, if a company fails to submit an audited financial statement for three consecutive fiscal years, the Registry will directly initiate compulsory deregistration proceedings. The company’s assets will be confiscated by the Hong Kong government, and the directors will be placed on the list of untrustworthy persons—they will be barred from serving as directors of any Hong Kong company for five years and may face restrictions on entering Hong Kong.

Furthermore, mandatory removal from the board does not mean your outstanding fines will be waived. Any previously overdue annual review fees, business registration fees, and tax penalties will still be collected. If the amount owed exceeds a certain threshold, the tax authority may apply to restrict the director’s ability to leave the country.

Although the voluntary deregistration process is cumbersome, it is dignified and clean, leaving no blemish on the company’s credit record. While compulsory deregistration requires no effort on your part, its aftereffects may impact your future business activities in Hong Kong.

If the company is truly no longer needed, take care of it right away. Every additional year you let it sit is another year of fines and back taxes. The sooner you dissolve it, the sooner you’ll be free of it.

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