Key Points to Know Before Deregistering a Hong Kong Company in Ningbo!

How to Smoothly Deregister a Hong Kong Company in Ningbo Essential Information You Must Know

With the evolving global economic environment, an increasing number of mainland Chinese enterprises registered in Hong Kong are re-evaluating their overseas business strategies. As an important foreign trade city in the Yangtze River Delta region, Ningbo maintains extensive business ties with Hong Kong, including numerous companies established in the early years to expand into international markets. However, in recent years, due to economic fluctuations, policy adjustments, and corporate strategic transformations, many Ningbo-based companies have opted to deregister their Hong Kong entities.

According to data released by the Ningbo Municipal Bureau of Commerce in 2025 and recently reported by Zhejiang Daily, over 300 local companies completed the liquidation or deregistration of overseas companies in the past year, with the majority being Hong Kong-based entities. This trend reflects how companies are streamlining non-core overseas assets and focusing resources on optimizing their core business structures in response to the increasingly complex and volatile international environment.

For companies in Ningbo, while Hong Kong offers advantages such as simplified registration procedures and favorable tax policies, the deregistration process is far more complex than initial setup. Improper handling may lead to unnecessary delays or even legal and financial complications. Therefore, before initiating the deregistration process, companies must fully understand relevant policies and make adequate preparations.

1. Determine Eligibility for Deregistration

According to the Companies Registry of Hong Kong, a company may apply for voluntary deregistration if it meets the following conditions

1. The company has never conducted any business or has ceased operations since its establishment.

2. All assets, including intangible assets, have been disposed of.

3. There are no outstanding debts.

4. All shareholders unanimously agree to the deregistration.

5. The company is not involved in any legal proceedings or arbitration.

If the company qualifies, the simplified deregistration process can be used, which typically takes 4 to 6 months and involves relatively low costs. Otherwise, if the company has been actively operating, has outstanding liabilities, or faces shareholder disagreements, a formal liquidation Liquidation process is required. This involves appointing a liquidator to handle assets and debts, and is more complex and time-consuming.

2. Complete Financial Settlement and Ensure Tax Compliance

Before proceeding with deregistration, a company must complete a full financial settlement, including settling all payables, collecting receivables, and disposing of inventory and fixed assets. A final set of financial statements must be prepared.

Additionally, the company must submit its final profits tax return to the Inland Revenue Department IRD of Hong Kong and confirm whether any taxes are still due. If the company previously benefited from tax relief policies, it must ensure that all relevant filings were accurate and complete to avoid delays caused by historical issues.

3. Terminate Bank Accounts and Other Registrations

Many companies in Hong Kong maintain bank accounts for cross-border settlements. These accounts must be closed before deregistration. Furthermore, if the company has registered trademarks with the Intellectual Property Department, reported employee information to the Labour Department, or filed records with other agencies, these registrations must be canceled or updated accordingly to prevent future legal liabilities.

4. Properly Handle Employee Relations and Contractual Obligations

If the company employed staff in Hong Kong, employment contracts must be terminated in accordance with local labor laws, and severance payments must be made where applicable. The company should also review all existing contracts-such as leases and service agreements-to determine whether early termination clauses exist and what potential liabilities may arise. Open communication with counterparties is essential to avoid disputes.

5. Engage Professional Service Providers

Given the legal and financial complexities involved in company deregistration, it is highly recommended that companies engage qualified professional firms, such as accounting firms, law firms, or business service agencies, to assist with the process. This not only improves efficiency but also minimizes potential risks. For example, some local foreign-related service providers in Ningbo now offer one-stop deregistration services, including document preparation, communication, and translation, which have been well received by local enterprises.

6. Coordinate with Local Regulations in Ningbo

Although Hong Kong operates under a separate legal jurisdiction, companies must also update relevant information with local authorities in Ningbo, such as the Administration for Market Regulation and the tax bureau. For instance, if the Hong Kong subsidiary was owned by a parent company in Ningbo, the equity structure should be updated accordingly after deregistration, and the change should be disclosed in the annual report to maintain transparency and compliance.

Conclusion

As more Ningbo-based companies refocus their operations on the mainland, deregistering Hong Kong companies has become a growing trend. However, this is not a simple administrative task but a systematic process that requires careful planning across multiple areas. Only by fully understanding the regulatory requirements and making thorough preparations can companies successfully complete the deregistration process and lay a solid foundation for future development.

Before making the decision to deregister, companies should carefully assess the impact on their overall business structure, and proceed only under the guidance of professional advisors. This ensures a smooth exit and minimizes any lingering risks.