HK Maintenance Costs for Unoperated Companies Do You Really Know Them?

How Much Does It Cost to Maintain an Unoperated Company in Hong Kong Do You Really Know?

In recent years, with the changes in the global economic environment and adjustments in corporate operating strategies, more and more companies choose to register in Hong Kong but do not actually start operations. This phenomenon is not uncommon in the international business world. However, in Hong Kong, known for its high living costs and complex tax system, the existence of unoperated companies and their maintenance costs have drawn significant attention.

According to statistics from the Hong Kong Companies Registry, tens of thousands of new companies are established in Hong Kong each year, with a considerable number never truly commencing operations. The existence of these unoperated companies is often related to factors such as taxation, building overseas structures, and future market expansion plans. However, many people may not realize that even if a company has never conducted any business activities, as a legally existing entity, it still needs to bear certain legal obligations and financial burdens.

Basic Maintenance Costs for Unoperated Companies

For a company registered in Hong Kong, even without engaging in actual business operations, it must comply with relevant regulations stipulated in the Companies Ordinance and maintain its status as active. This means the company needs to submit annual reports regularly and pay corresponding fees. According to the Hong Kong Companies Registry, the annual fee for 2025 is HKD 2,550 approximately RMB 200. If the company fails to pay the annual fee or submit the annual return on time, it may face fines or even be struck off the register.

In addition to the annual fee, unoperated companies also need to consider expenses related to auditing and taxation. Although the company does not generate actual income, according to the requirements of the Inland Revenue Department, the company still needs to hire an accounting firm to prepare annual accounts and have a practicing accountant issue an audit report. This process, although it does not generate additional income, will incur certain costs, which depend on the service charges of the accounting firm. Generally speaking, the audit fee for unoperated companies is approximately between HKD 8,000 and HKD 15,000.

Moreover, the company needs to maintain the active status of its bank account. Many unoperated companies deposit funds into their bank accounts to avoid account closures due to prolonged inactivity. However, managing a bank account also generates small maintenance fees, including monthly fees and transaction handling charges. Although these fees seem negligible, they can increase the overall expenditure when accumulated over time.

The Phenomenon of Unoperated Companies in the News

Recently, Hong Kong media reported a case involving unoperated companies. An entrepreneur from mainland China registered an empty shell company in Hong Kong to facilitate future overseas market expansion. However, due to a lack of understanding of Hong Kong's laws and tax systems, he failed to handle the annual reporting matters in time, resulting in the company being struck off and losing a large amount of initial investment. This incident drew public attention to the potential risks of unoperated companies.

In fact, similar situations are not uncommon. Especially in the current context of increased global economic uncertainty, some business owners may neglect proper management of unoperated companies due to financial strain or other reasons. However, as Hong Kong's financial professionals point out, while it may seem to save initial costs, it could lead to greater economic losses in reality.

How to Effectively Manage Unoperated Companies?

Faced with high maintenance costs, many business owners are reconsidering whether it is necessary to retain these unoperated companies. For this, professionals suggest adopting the following approaches

Firstly, consider selling the unoperated company to a third party. In recent years, with the flourishing development of cross-border MA markets, more investors are willing to purchase already registered companies, especially those with good credit records. Through this method, not only can part of the investment cost be recovered, but it can also create more possibilities for future business development.

Secondly, consider voluntarily dissolving the company. Although the dissolution process is relatively complex and time-consuming, it can completely relieve the company of its legal obligations and avoid unnecessary expenses. It is important to ensure all debts are settled before deciding to dissolve and properly handle employee placement issues.

Finally, for unoperated companies that are genuinely needed, internal management should be strengthened, regular checks on various expense items should be conducted, and higher-performing service providers should be sought to reduce overall costs. For example, by comparing the prices and service quality of different accounting firms, the most suitable partner can be selected.

Conclusion

In summary, while setting up unoperated companies in Hong Kong has certain conveniences, the hidden costs should not be overlooked. Whether it is the annual fee, audit fee, or other hidden expenses, they may impose heavy pressure on businesses. Before making decisions, it is essential to comprehensively evaluate your own needs and formulate reasonable plans based on actual circumstances. Only then can the value of unoperated companies be maximized while avoiding unnecessary risks.