🇭🇰 Annual Compliance — Hong Kong

Assuming all income is automatically tax-free because of the territorial system

Fix: Only profits sourced outside Hong Kong qualify for offshore exemption. You must proactively apply for an offshore claim with the IRD and provide detailed evidence (contracts, correspondence, operational records) proving the profits were not derived from Hong Kong.

Not appointing a qualified company secretary before incorporation

Fix: Hong Kong law requires every company to have a company secretary who is either a Hong Kong resident individual or a body corporate with a registered office in Hong Kong. Engage a licensed corporate services provider before filing your incorporation documents.

Underestimating the time and documentation required to open a bank account

Fix: Prepare a comprehensive business plan, proof of business activity (contracts, invoices, supplier agreements), and have all directors available for in-person bank meetings. Consider applying to multiple banks simultaneously and explore fintech alternatives for interim banking.

Neglecting the mandatory annual audit requirement

Fix: Every Hong Kong private limited company must have its financial statements audited by a practicing CPA, regardless of size or revenue. Budget HKD 5,000–20,000+ annually for audit fees and engage an auditor well before the filing deadline to avoid penalties.