How Mainland Residents Smoothly Acquire Hong Kong Companies? A Full Analysis of Procedures and Tips!

What Mainland Residents Need to Know About Acquiring a Hong Kong Company Process and Practical Tips to Make It Easy

With the continuous development of the Guangdong-Hong Kong-Macao Greater Bay Area and the deepening economic ties between mainland China and Hong Kong, more and more mainland investors are turning their attention to the Hong Kong market. Among them, acquiring an existing Hong Kong company has become a popular option for entrepreneurs and business owners seeking a quick entry into the city's market.

However, due to differences in legal systems and business environments, mainland residents still face many challenges when acquiring a Hong Kong company. This article outlines the latest relevant policies and practical experience to provide mainland individuals with a clear process for acquiring a Hong Kong company, along with useful tips to help you complete the entire process smoothly.

1. What Does It Mean to Acquire a Hong Kong Company?

Acquiring a Hong Kong company typically refers to obtaining control over an existing company by purchasing its shares or assets. Compared to setting up a new company from scratch, acquiring an existing one can save time and may allow the buyer to inherit valuable resources, reputation, and customer base that the original company has built within its industry.

In particular, Hong Kong companies with strong operational records in finance, trade, and technology often enjoy high market recognition. In recent years, many mainland enterprises have chosen this route to expand their presence in Hong Kong.

2. Key Steps in Acquiring a Hong Kong Company

1. Preliminary Due Diligence

Before officially taking over, it is essential to conduct thorough due diligence. This includes, but is not limited to

Assessing the company’s financial health

Identifying any outstanding debts or potential litigation

Reviewing the clarity of shareholder structure

Confirming whether annual returns and business registration fees have been submitted on time

Checking if the company holds necessary licenses e.g., for financial services or import/export

In July 2025, media reports highlighted a case where a Shenzhen investor failed to perform adequate due diligence before acquiring a Hong Kong trading company allegedly generating millions in annual revenue. After the deal, he discovered the company had liabilities amounting to several million HKD, leading to a failed transaction and significant losses. This illustrates how crucial due diligence is in the acquisition process.

2. Signing the Transfer Agreement

Once satisfied with the findings, both parties should sign a formal Share Transfer Agreement, clearly stating the transfer price, payment method, closing date, and related legal responsibilities. It is advisable to engage a professional lawyer to draft or review the contract to protect your interests.

3. Completing Shareholding Changes

According to the Companies Ordinance of Hong Kong, the company must submit relevant documents to the Companies Registry within one month after the share transfer. These include

Completed Form 16.1 Instrument of Transfer

Updated shareholder register

Appointment documents for new directors if applicable

Revised articles of association if any amendments were made

Additionally, information such as the company’s registered address and secretary details should be updated to ensure compliance with Hong Kong company law.

4. Updating the Business Registration Certificate

After completing the company registration changes, you must apply to the Inland Revenue Department of Hong Kong to update the Business Registration Certificate to reflect the latest company information. This can usually be handled by the company secretary.

5. Bank Account Updates and Tax Filings

If the company already has a bank account, the acquirer needs to notify the bank to update the account details. Some banks may require a new round of KYC Know Your Customer checks. It is also important to check for any historical tax issues, and if necessary, hire an accountant to assist with reviewing past accounts.

3. Practical Tips and Important Considerations

1. Evaluate the Company’s Value Objectively

Do not rely solely on the seller’s financial statements to assess value. Consider third-party audit reports or seek assistance from professionals. Pay special attention to hidden liabilities or inflated revenues.

2. Use Professional Service Providers

Given the different legal systems, it is recommended to engage experienced Hong Kong corporate lawyers, accountants, or company secretarial firms. These professionals are familiar with local procedures and can help mitigate risks.

3. Comply with AML and KYC Requirements

In recent years, Hong Kong regulators have tightened anti-money laundering AML and know-your-customer KYC requirements. Buyers should prepare identification documents, proof of fund sources, and other materials to meet regulatory scrutiny.

4. Retain Existing Resources

If the target company has stable client relationships, supply chains, or specific qualifications, try to retain the original team or partnerships to ensure a smooth transition. For example, at the end of 2025, a Guangzhou-based enterprise successfully preserved the logistics network and customer base of a local logistics firm it acquired, enabling rapid expansion.

5. Plan for Long-Term Development

Before proceeding with the acquisition, clarify your long-term strategic goals. Is the company intended as a stepping stone to overseas markets? Or is it for cross-border trade settlements? Different purposes will affect what you should focus on during the acquisition process.

4. Conclusion

For mainland investors looking to enter the Hong Kong market, acquiring an existing company with a solid foundation is an efficient and viable strategy. With proper preparation, legal compliance, and support from professional advisors, you can smoothly acquire the company of your choice and embark on a new chapter in your business journey.

We hope this guide provides valuable insights and wish you success in your efforts to acquire a Hong Kong company!