Analysis of Listing Requirements for Foreign Companies in Hong Kong

How to Successfully List in Hong Kong? A Comprehensive Guide to Overseas Company Listing Requirements

In recent years, with the continuous development of the global economy and the increasing maturity of capital markets, more and more overseas enterprises have turned their attention to the Hong Kong capital market. As one of the most important financial centers in the world, Hong Kong, with its unique geographical location, mature financial market, and legal system aligned with international standards, has attracted numerous overseas companies to list. However, for these companies, how to smoothly complete the listing process in Hong Kong is a carefully prepared process. This article will provide a detailed guide for overseas companies aspiring to list in Hong Kong, starting from the basic conditions, listing procedures, and key points to note.

I. Basic Conditions for Listing in Hong Kong

The Hong Kong Stock Exchange HKEX is one of the most influential securities exchanges in the world, with its Main Board and GEM Growth Enterprise Market catering to enterprises of different sizes and development stages. For overseas companies, the main conditions for listing in Hong Kong include the following aspects

1. Profitability Requirements

According to the regulations of the Hong Kong Stock Exchange, the Main Board has certain requirements for the financial performance of companies applying for listing. For example, the net profit for the latest fiscal year must reach at least HKD 20 million, and the cumulative net profit for the previous two fiscal years must not be less than HKD 30 million. The company also needs to demonstrate its ability to continue operations without significant financial risks. In comparison, the requirements for the GEM are relatively relaxed but still need to prove the company's growth potential.

2. Number of Shareholders and Public Shareholding Ratio

Hong Kong listing requires that the number of shareholders must be no less than 100, and the public shareholding must account for at least 25% of the total share capital. This regulation aims to ensure the liquidity and transparency of stock trading, preventing manipulative behavior caused by excessive concentration of equity.

3. Corporate Governance Structure

The Hong Kong Stock Exchange places great emphasis on the level of corporate governance. Companies applying for listing need to establish sound internal control systems and appoint independent non-executive directors. They also need to regularly disclose financial reports and accept supervision from external audit institutions.

4. Industry Restrictions

Although the Hong Kong market is open to most industries, some specific fields may be subject to certain restrictions, such as the gambling industry and tobacco industry. Before choosing to list, companies should carefully evaluate whether their industry complies with relevant regulations.

II. Detailed Explanation of the Listing Process in Hong Kong

Listing in Hong Kong is not an overnight process; it usually involves several key steps

1. Determining Listing Goals and Building Teams

Firstly, companies need to clearly define their listing goals, such as financing needs, enhancing brand influence, or entering international markets. On this basis, they can hire professional investment banking advisory teams to assist with subsequent work. These teams typically consist of investment banks, law firms, and accounting firms, providing professional support throughout the process.

2. Preparing Application Materials

The core documents for applying for listing include the prospectus, financial statements, and legal opinions. Among them, the prospectus is the most important part, detailing the company's business model, competitive advantages, and future development plans. To ensure the authenticity and accuracy of the information, companies need to cooperate with intermediaries to complete due diligence.

3. Submitting Listing Applications and Waiting for Approval

After all preparations are completed, the company can submit its listing application to the Hong Kong Stock Exchange. After receiving the application, the exchange will conduct an initial review. If there are no issues, a hearing meeting will be arranged. During this period, the company may need to answer questions from regulatory authorities and adjust certain plans to meet listing standards.

4. Starting Roadshows and Pricing

After passing the hearing, the company enters the roadshow stage. During this stage, the company introduces itself to potential investors and determines the final issue price based on market feedback. It is worth noting that a reasonable pricing strategy is crucial; setting the price too high may lead to insufficient subscription, while setting it too low may affect fundraising results.

5. Official Listing and Trading

After completing the above steps, the company can officially list and trade on the Hong Kong Stock Exchange. At this point, the company becomes a public company, and its shares can be freely bought and sold in the market.

III. Key Points for Overseas Companies Listing in Hong Kong

Despite the broad development platform provided by the Hong Kong market, there are still many challenges in actual practice. The following points deserve particular attention

1. Language Barriers

While English is one of the official languages in Hong Kong, many local investors prefer to communicate in Cantonese or Mandarin. When drafting the prospectus, companies should try to use simple and understandable language and attach a Chinese version for better comprehension.

2. Cultural Differences

There are certain differences in corporate culture and business practices across countries and regions. For instance, in some Western countries, companies tend to focus more on short-term profit growth; whereas in Asia, long-term strategic planning is emphasized. When formulating listing plans, companies need to fully consider the characteristics of the local market.

3. Legal Compliance

Hong Kong's securities laws differ from those in mainland China and other countries/regions. During the preparation for listing, companies must comply with relevant laws and regulations to avoid project delays due to violations.

IV. Case Study Successful Overseas Companies Listing in Hong Kong

In recent years, many overseas companies have successfully listed in the Hong Kong capital market. For example, the well-known American e-commerce platform Alibaba chose to list in Hong Kong in 2025. The reasons behind this decision mainly included the following considerations

1. Broadening Financing Channels

Alibaba aimed to further expand its funding sources through listing in Hong Kong to provide adequate support for its globalization strategy.

2. Enhancing Brand Influence

Listing in Hong Kong helps enhance Alibaba's reputation in Asia and globally, attracting more customers and partners.

3. Diversifying Risks

Spreading shares across multiple markets can effectively reduce the impact of fluctuations in a single market, achieving stable development.

In summary, Hong Kong is undoubtedly an ideal listing location. However, for overseas companies, success here requires thorough preparation, strict adherence to rules, and active adaptation to the local environment. With sufficient effort, any excellent company has the opportunity to shine on this fertile ground!