What is a Dormant Company in Hong Kong?
A dormant company is a registered entity under the Hong Kong Companies Ordinance (Cap. 622) that has ceased significant accounting transactions and qualifies for exemption from statutory audits under Section 447. This status preserves corporate registration while minimizing compliance obligations, requiring only essential filings with the Companies Registry (CR). Dormancy provides a strategic solution for businesses pausing operations, holding assets, or planning future reactivation without incurring full compliance costs.
Why Apply for Dormant Status?
Maintaining dormant status delivers critical advantages:
- Cost Reduction:Exempt from mandatory audits and Profits Tax Returns
- Compliance Simplification:Only minimal filings required (e.g., Annual Return NAR1)
- Legal Protection:Prevents deregistration
- Strategic Flexibility:Easily reactivate when business resumes
- Penalty Avoidance:Eliminates risk of fines for audit/tax non-compliance
- Asset Safeguarding:Maintains ownership of intellectual property or holdings
What Services Do We Provide for Dormant Companies?
Our end-to-end solution ensures seamless dormant status management:
- Dormancy Qualification Assessment:
Verification against Section 5 criteria (no significant accounting transactions)
- Status Declaration & Documentation:
- Preparation of director/shareholder resolutions
- Filing of “Notification of Dormant Status” (Form ND7) with CR
- Essential Compliance Management:
- Annual Return (NAR1) filing
- Registered office maintenance
- Significant Controllers Register (SCR) updates
- Statutory Exemption Handling:
- Audit waiver under Section 447
- IRD exemption coordination
- Reactivation Support:
- Full audit/tax filing reinstatement
- CR notification upon business resumption
- Automated Monitoring:
Real-time deadline tracking for NAR1 filings
Who Qualifies for Dormant Status?
This service benefits:
- Inactive Startups:Preserving registration pre-funding
- Asset-Holding Vehicles:Protecting property/IP without operational costs
- Businesses in Transition:During restructuring or market pauses
- Project-Based Entities:Between active phases
- Foreign Subsidiaries:Temporarily inactive in Hong Kong
What Are the Key Requirements?
To achieve/maintain dormancy:
- No accounting transactions beyond:
- CR filing fees
- Share capital payments
- Penalty settlements
- Valid registered office address
- Updated SCR at registered office
- Timely NAR1 submissions
Who Manages Dormant Status Compliance?
Our licensed team includes:
- TCSP-Registered Professionals:Specializing in Companies Ordinance exemptions
- Compliance Officers:10+ years expertise
- Multilingual Support:English, Cantonese, Mandarin
What Are the Benefits?
- Cost Savings:Reduce compliance expenses
- Reactivation Readiness:Resume operations within 14 days
- Resource Optimization:Free internal teams from complex filings
- Strategic Preservation:Maintain company age, contracts, and credit history
Strategic Considerations
While dormant status offers significant advantages for temporary business pauses, companies should evaluate their long-term needs:
Dormancy Benefits: Optimal for preserving corporate history, licenses, banking relationships, and intellectual property during short-to-medium term hiatuses (1-5 years).
Deregistration Alternative: If operations won’t resume within 3-5 years, formal deregistration may be more cost-effective. New companies can be registered within 7 days when needed.
Preserve or Deregister? Optimize Your Strategy!
Whether maintaining dormancy or considering deregistration, our experts provide tailored compliance solutions.
Preserve Your Corporate Legacy Strategically!
Optimize compliance costs while safeguarding your Hong Kong registration.
