Redomiciliation in Hong Kong SAR: opportunities since May 23, 2025
Since May 23, 2025, thanks to the enactment of The Companies (Amendment) (No.2) Bill 2024 [1](the Bill), a new point has appeared on the redomiciliation map – Hong Kong, provided the possibility of “incoming” redomiciliation.
Lawyers from the “Corporate Law. M&A” practice of GRATA International, Belarus have prepared a brief overview to help you not only understand what has happened, but also how you can use it.
What is redomiciliation?
Redomiciliation is the process of moving a company from one jurisdiction to another while maintaining:
- legal entity and all its history;
- existing bank accounts;
- existing contracts and counterparties.
There is no need to resort to liquidation procedures and creating companies “from scratch” which is especially relevant in the current economic conditions.
The main rule for successful redomiciliation: the legislation of both the “outcoming” and “receiving” countries must expressly provide for this possibility. This can be compared to a visa regime – both countries must “stamp” the issuance and admission. Therefore, the main obstacle to redomiciliation is a direct prohibition or absence of legislative permission. If such a mechanism is missing in either country, the path for the “relocation” is closed.
Examples of jurisdictions allowing redomiciliation: Mauritius, BVI, Cyprus, Armenia, Singapore, Switzerland, Luxembourg. Some jurisdictions (UAE, Russia, Qatar, Kazakhstan) allow redomiciliation only to special zones.
When and why is this “relocation” may be needed?
Redomiciliation is not just a change of address but a significant strategic move. The main reasons why companies decide to take this step are:
Tax burden reduction
Companies often prioritize jurisdictions with more advantageous tax rates.
For example, many opt for redomiciliation in the UAE, where one of the world's lowest corporate tax rates (9%) is in effect. Special Administrative Regions (SAR) in Russia also offer benefits, such as a 0% profit tax rate on received dividends and share sales under certain conditions (ownership of more than 15% and a duration of over 1 year).
Mitigation of sanction risks and their consequences
In recent years this has become one of the main reasons. Re-registration in a “friendly” jurisdiction allows bypassing sanction-related restrictions.
Attracting investments
The new jurisdiction may offer better conditions for attracting investments and reconnecting with investors. This is particularly relevant for companies utilizing debt instruments and having undergone an IPO.
Structure optimization
Another reason for redomiciliation is relocating the head company closer to the core assets and operational activities.
Why is Hong Kong an attractive alternative to the UAE and other jurisdictions allowing redomiciliation?
Hong Kong is often compared to the UAE, but this is usually a superficial view. The advantages of Hong Kong lie in a different plane and may be more significant depending on the structure of your business. Hong Kong did not allow for either “incoming” or “outgoing” redomiciliation in the past. However, thanks to the new law the opportunity for companies to be “received” into the jurisdiction through redomiciliation has now been opened.
Who can “relocate”?
The Law sets out clear requirements for candidates planning redomiciliation:
1. The legislation of the country of the current initial registration must allow outcoming redomiciliation and the company must have fulfilled all obligations in the original jurisdiction.
In addition, the Hong Kong Government is negotiating with some offshore jurisdictions (such as BVI, the Cayman Islands) to simplify the redomiciliation regime from such offshore jurisdictions to Hong Kong.
2. The company must have existed for at least 1 financial year (at the time of applying for redomiciliation). At the same time, no more than 12 months should have passed since the company's last financial reporting.
3. The company must be operational, properly established, and not under judicial management or in the process of liquidation (these circumstances must be confirmed by a practicing lawyer specializing in the legislation of the company's original jurisdiction).
4. The organizational and legal form of the company planning redomiciliation must fully or predominantly correspond to one of the local permissible organizational and legal forms:
- private company limited by shares;
- private unlimited company with a share capital;
- public company limited by shares;
- public unlimited company with a share capital.
However, changing the organizational and legal form during the redomiciliation process is NOT permitted.
5. It is necessary to confirm that the company is able to repay all its debts within 12 months after filing the redomiciliation application.
What are the additional steps required for a successful redomiciliation?
The redomiciliation process is not just about submitting an application and waiting for a certificate. Let's consider the key stages:
1. Legal opinion. You will need an official opinion from a practicing lawyer from the country of incorporation of your company, the so-called capacity legal opinion. This document should confirm that the company is properly established, operational, not in the process of liquidation or bankruptcy. The opinion should separately reflect that the "move" is allowed by the local legislation of the company's incorporation country.
2. Obtaining Shareholders' Consent. Hong Kong legislation requires obtaining the consent of at least 75% of the company’s shareholders (stockholders) for redomiciliation, if the legislation of the original jurisdiction or local legal acts of the company do not require such consent. At the same time, all shareholders (stockholders) must be notified of the meeting and the agenda with an item about redomiciliation at least 21 days in advance.
3. Filing the application. After preparing a package of documents, including the capacity legal opinion, the decision of the shareholders (stockholders), and the latest financial statements, the application is submitted to the Hong Kong Registrar of Companies. The preliminary review period is about 2 weeks.
It should be noted that the application review period is not equal to the completion period of the redomiciliation process as it does not include additional regulatory requirements (for example, the company may need to conduct a market valuation of the “transferred” assets by a local appraiser).
4. Obtaining a Hong Kong Certificate of Resident Status. After reviewing the documents, the Registrar issues a certificate confirming that the company is considered registered in Hong Kong from the date specified in the certificate. From the date of receiving the certificate, the company must comply with all Hong Kong laws, on par with local companies.
5. Deregistration in the original jurisdiction. After receiving the Certificate of Resident Status, the company has 120 days to complete the deregistration process in the country of origin and provide confirmation to the Hong Kong Registrar of Companies. If necessary, this period can be extended.
Tax aspects and financial benefits - good news for business
- Absence of stamp duty. The redomiciliation process is not subject to stamp duty, meaning there is no tax on the transfer of company assets to a new jurisdiction. This is a significant advantage compared to standard restructuring.
- ax deductions. If the company is required to pay tax (for example, on unrealized profit) when “exiting” the original jurisdiction, Hong Kong will provide tax deductions to avoid double taxation.
- Preferential tax regime. Hong Kong operates a two-tier profit tax rate: 8,25% on the first HK$2 million of profits (approximately USD 255,000) and 16,5% on the remaining amount. When complying with the territorial principle (income from sources outside Hong Kong), the rate can be 0% (however, it is important to understand that obtaining this rate is not automatic. It is necessary to prove that the source of income is outside Hong Kong).
Pitfalls – they're inevitable. What should you keep in mind?
Despite the sufficient number of advantages provided by the considered jurisdiction, it is important to understand the potential risks that companies may face.
Novelty of the regime. Since the possibility of redomiciliation in Hong Kong appeared just a month ago, the practice of applying the new legislation is still in its early stages. Therefore, it is currently difficult to predict possible risks. As a result, companies will have to “go through fire, water, and copper pipes” and feel all the “pitfalls” through the prism of their own experience.
Absence of a “return ticket”. Current Hong Kong legislation does not provide a simple mechanism for moving a company from Hong Kong to another jurisdiction (“outcoming” redomiciliation). This must be taken into account when planning the company's future activities.
Banking compliance. Despite the status of a “friendly” jurisdiction, banks in Hong Kong (like most banks in other countries) conduct a strict check on companies, including the requirement to disclose ultimate beneficial owners.
Coordination between jurisdictions. The redomiciliation process requires coordinated work of lawyers in two countries – the “exit” country and Hong Kong. Thanks to the global network of offices of GRATA International, as well as an extensive partner network, we can help ensure smooth coordination of this process.
Hong Kong has opened its doors to international business, offering a worthy alternative for redomiciliation. However, redomiciliation is not just a change of legal address; it is a complex, multi-stage process that requires deep legal expertise and coordination between multiple jurisdictions.
GRATA International team in close collaboration with colleagues from our offices worldwide, is ready to guide you through this process. We offer not just legal support, but comprehensive strategic partnership. We will help you not just “relocate”, but use redomiciliation as an effective tool to achieve your business goals.
Contact us for individual consultation and development of a redomiciliation roadmap for your company.
[1] https://www.gld.gov.hk/egazette/english/gazette/file.php?year=2024&vol=28&no=51&extra=0&type=3&number=32
