HK to attract enterprises to re-domicile to city: Chan

HK to attract enterprises to re-domicile to city: Chan

Hong Kong Launches Inward Re-Domiciliation Regime to Attract Global Enterprises

Hong Kong has introduced a new inward re-domiciliation regime, effective May 23, 2025, to streamline the process for overseas companies to transfer their place of incorporation to the city while preserving legal identity and operational continuity according to China Briefing. This initiative aims to reinforce Hong Kong's position as a global business and financial hub, particularly for enterprises seeking access to Asian markets and a stable, low-tax environment as reported.

Under the Companies (Amendment) (No. 2) Ordinance 2025, eligible non-Hong Kong companies—including private/public entities limited by shares or with share capital—can re-domicile without forming a new legal entity. The regime eliminates prior complexities, such as court-sanctioned wind-ups, by providing a legally recognized pathway to maintain contracts, licenses, and obligations according to the regime's details. Notably, Hong Kong does not impose economic substance requirements, making it accessible to holding companies, family offices, and smaller multinationals as stated.

The regime addresses growing compliance challenges in traditional offshore jurisdictions like the Cayman Islands and British Virgin Islands, which have introduced stricter economic substance rules. Hong Kong's streamlined process, shorter application timelines, and sector-neutral approach contrast with Singapore's more restrictive framework, which mandates solvency and size thresholds according to analysis. Additionally, re-domiciled companies gain access to Hong Kong's territorial tax system, double taxation treaties, and proximity to mainland China under the "One Country, Two Systems" framework as noted.

Eligibility criteria include legal compatibility with Hong Kong's Companies Ordinance, solvency (ability to pay debts within 12 months), and shareholder approval (75% majority if not required by the original jurisdiction). Post-re-domiciliation, companies must deregister in their original jurisdiction within 120 days to retain Hong Kong status according to regulations.

While no direct financial incentives are offered, the regime aligns with broader policies to attract innovation-driven enterprises and regional headquarters. However, businesses must navigate tax implications, including potential scrutiny in jurisdictions like China, and ensure compliance with Hong Kong's regulatory obligations, such as annual filings and corporate governance standards as reported.

The re-domiciliation process typically takes 6–12 weeks, with fees ranging from HK$6,050 to HK$6,725 depending on submission method according to pricing information. As the policy evolves, companies are advised to consult legal and tax experts to assess cross-border implications and optimize structuring strategies as recommended.

This development underscores Hong Kong's strategic positioning to capture re-domiciliation demand amid shifting global regulatory landscapes.