Selling, Transferring, or Closing Your Hong Kong Company w/ Sunny Wong

Michael MicheliniCorporate, Podcast, Taxes22 Comments

sunnywong-transferring

Thanks for tuning in, we are now at episode 33 of Global From Asia – Drying up here after massive rainstorm and flooding in parts of South China. I got caught in the middle of the rainstorm commuting from Hong Kong into Shenzhen during it – and I was carrying a package of swimsuits from Europe – a listener is asking me and my wife to look into selling these in China and this is a sample order. Pretty exciting stuff and I’ll keep you posted on the progress – it’s women’s swimwear too, so hopefully I can get some photo shoot sneak peaks to share – and Dustin, no I’m not going to model any speedos so don’t worry about that haha

So this week we have Sunny Wong back, my accountant in Hong Kong who we had back on episode2 – I was visiting him when I picked up the product samples and thought it would be great to have him back on the show! The last episode we had with him talked about opening a Hong Kong limited company – this time I thought it would be interesting to talk about closing or selling a Hong Kong limited, the thought process, and what’s involved. I can’t find much information on this online – so definitely listen up! So let’s go!

Topics Covered in this Episode

  • what to consider when closing or selling a Hong Kong company
  • assets
  • liability
  • Hidden liabilities and examples
  • Capital gains tax in Hong Kong
  • Buyer’s bid, preparing to sell it
  • Just closing it
  • Asset sale vs stock sale (Limited company sale)
  • Keep it and change the name
  • Carry over losses
  • Contacting Sunny

People / Companies / Resources Mentioned in this Episode

  • Book value – Assets minus liabilities
  • Company History – notable after 5 years (in general) for banking
  • Hidden Liabilities – debts not recorded in the accounts
  • Contingent Liabilities – debts not recorded to their auditor (professional name for hidden liabilities)
  • Personal Undertaking – where original owners personally guarantee there aren’t any hidden liabilities when transferring to the buyers
  • Liabilities on capacity of the company vs the original owners – when transferring company, as long as no negligence, then the original owners are not liable
  • HSBC bank
  • Stamp Duty – 0.1% of NAV (net asset values)
  • March 2014 – Company law amendment – no authorized capital now – only the issued paid up capital.
  • Deregistration – if no 3rd party outside liabilities, takes a few months to process.
  • Accumulated basis accounting – taking the full sum of all years profit or loss total position
  • Contacting Sunny — https://www.globalfromasia.com/grand-consultancy/

Episode Length: 27:29

Thanks for that Sunny! Closing or selling companies seems always way more complicated than opening up a new one and hopefully everyone gets some good insights from the interview here.

I myself have re-incorporated companies from my very first eBay business in New York City – it was 2004 and I had no idea how to open a company, couldn’t find information online, and my friends and family had no idea – I ended up going during my lunch break on wall street to City hall and then the country clerk’s office to register in New york city!

I learned quickly this was not the easiest or cheapest thing to do – and went through a rather painful process of closing it down and reincorporating my eBay and e-commerce business in New Jersey that next year in 2005.

That transition was hard, and I know those of us running online businesses need to try to balance the time and complexities of operating a business, wherever you end up registering in the world.

Download Options

sunnywong-transferring525

Surrendering Shares or Directorship in a Hong Kong Limited

We received an email from a blog reader as below:

Hi guys, im in a company envolved but i wish to leave (minority interest) due to mal management of the other 2 cofounders.
on your blog i dont see anything relevant on this. do you have some advise for me?

thank you,
Christine

There are a couple parts to dissect here, the first is: are you listed as a director of the company? If you are a director of the company, then you have liability if the company is doing malpractice. If you believe the other co-founders and directors are engaging in this kind of dodgy business that could get in legal problems, you want to surrender your role as director as soon as possible.

If you are not listed as a company director, and are simply a minority shareholder, there is no liability to you if the company is engaging in risky business. Sure, that may be a irresponsible way to look at it – but there is no way to “cancel” your shares in a Hong Kong limited.

If you really do not want to be a shareholder, you would have to contact the co-founders and/or other shareholders and try to transfer your ownership to them. We would hope you would ask for some kind of financial compensation for those shares, as there is some value there, but this is your decision.

If you are not communicating with the other shareholders, then you can simply hold onto your shares. There is no liability and no risk to you. Yet, as discussed above, if you are listed on the company as one of the company directors, then you would want to step down as soon as possible. The company directors do have a responsibility to do upstanding business and can face legal action if not.

If you’re in this situation, you need to talk to a specialist with your best interests – and we at the corporate divisions department here of GFA would love to talk to you – please contact us today.

 

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[…] mentioned this in a podcast, GFA33 – Selling a Company vs Asset Sale, if you want to listen. Deciding between these is where you need to think pretty clearly. I’ll […]

jack
jack
3 years ago

DEAR SIR
I VISIT YOUR SITE PLEASE TELL US DO YOU HAVE THE REGISTERED COMPANY MOR THAN 3 YEAR FOR SELL?
IF IT IS OK PLEASE SEND US THE PRICE .
THANKS

LinLi
LinLi
2 years ago
Reply to  jack

Hi,
I do. I really wanted to keep it but I am now a busy mum so I will sell my company registered in 2012 as I do not use it. It is still body corporate, all clean. I sell it for 45 000 HKD, just to get back the opening fees.
IF anyone is interested, please leave a message here first.
Y’all have a lovey day

LinLi
LinLi
2 years ago

haha thank you 🙂 The busiest job in the world…
Yes it is with a bank account, which is at HSBC. No any loan or any special product, just a normal and almost inactive (I pay the annual renewal) and multi-currency business account.

Joe
Joe
8 months ago
Reply to  LinLi

Word of advise , a HK limited company is worth jack diddly squad when it has no assets.
ALL banks and especially HSBC will require a due diligence process if the new owner wishes to continue the banking activities.
If you are a non-HK resident , good luck in getting HSBC to allow you to continue with that account , will not happen.

laurie mias
2 years ago

Mr. Green Juice is an online B to C platform and a wholesaler since March 2014 in Hong Kong. We sell, produce and deliver up to 300 organic cold pressed juices and meals deliveries every day to direct customers, restaurants, cafes and hotels in Hong Kong. We would love someone with great ambitions and management skills to take it over. This company has a lot of potential ahead, an established customers database, a well equipped kitchen – with Norwalk and Good Nature X1 presses, and running operations! Hong Kong is a huge market and so little competitors still. Looking forward… Read more »

Alex
Alex
2 years ago

Good afternoon.

Can you submit an electronic annual report of the form and introduce yourself into this form or give me the opportunity to write you as a company secretary for my company in a paper report NAR1?

How much will this service cost?
Do you sell ready-made companies registered in Hong Kong?
Or service secretary company service for 1 month?
Thank you

Evgeny
Evgeny
2 years ago

I wish to sell my HK company for 25 000 HKD registered in 2013, because I live in other country and don’t use it. [email protected]

David
David
2 years ago

I am an Indian, own a HK company. It is 3+ years old. I would like to sell it off since now i have moved back to india from China and do not use it any longer. I closed the bank account 2 weeks ago ( October 2017) . But it can be opened again, i can refer the bankers to you. Price is US$ 5000, interested people can get in touch with me

LD
LD
2 years ago

Hi

I have just received notice from the minority shareholder in my company that he has sold his shares to another person. He has sent me the sold notice with the stamp the instrument of transfer has been endorsed.

I am the majority shareholder and no board meeting was called beforehand. My prior consent was never granted either.

1) How could this have been possible? Is there a loophole?
2) Do I have the opportunity to still reject the transfer of shares?

Your kind help would be much appreciated.

LD

Jack
Jack
2 years ago

I wish to sell my hk limited company body corporate, all clean, registered since 2009. Never use it since i live in Europe, if you are interested please email me at pochaccofung.hotmail.com

Isabelle
Isabelle
2 years ago

Hello!
I would like to sell my hk limited company body corporate registered since 2016.
Sell it for 50 000 HKD only, would like to get back the opening fees.
All Clean and comes with a Bank account, clean as well, almost inactive (I just pay the annual renewal) and multi-currency business account.
Never use it since I went back to Europe (wanted to make a business between Asia and Europe but didn’t get successful )
If you are interested please email me at [email protected]
Isabelle

Kiettipong Nawasuchat
Kiettipong Nawasuchat
1 year ago

I would like to sell my HK registered company which has been in business for 11 years. Banking is with Hang Seng bank,multi-currency
business account.I have used it for engineering consulting work and all paperwork and tax filings are current. If interested please
email: [email protected]

Sylvain GALAND
Sylvain GALAND
1 year ago

Hi
I sell my HK company with opened bank account because I will leave HK after 14 years.
I am the majority shareholder and no board meeting was called beforehand.
This company has more than 5 years.
Asking price is 50,000 HKD.
Email : [email protected]
Sylvain

Sylvain GALAND
Sylvain GALAND
1 year ago

Hi,
I sell my HK company with effective bank acccount
I am the majority shareholder and no board meeting was called beforehand
I will leave HK after 14 years and no use in Europe
Asking price is 50,000 HKD
email : [email protected]
Sylvain

Jean-Baptiste
Jean-Baptiste
1 year ago

Hi ,
Im selling my HK Limited company opened in 2009.
Very clean records. With HSBC business account.

40.000 HKD

[email protected]

Olga
Olga
1 year ago

Hi!
I sell my HK company established in 2016 with effective bank account in Bank of China.
More details upon request anikinahelga.gmail.com

Vazgen
Vazgen
11 months ago

Hello, I am selling a Hong Kong company. The company is exactly 5 years old, with HSBC bank account.All renewals and annual audits are done. If Someone is interested please write to my email.

PETRA
PETRA
8 months ago

Hi,
I sell my HK LTD company with effective bank account HSBC
I am the only shareholder , the company was Incorporated in 2002 and has a valid BR till March 2020
no debts
I will leave HK and return to Europe
Asking price is 50,000 HKD

Rupesh Ranjan
Rupesh Ranjan
6 months ago

Hi
I have a HK offshore company registered in July 2015, NO BANK ACCOUNT at present but can be opened. Please get in touch if anyone wishes to buy. There are no loans. Best offer welcome. [email protected]

Dorian
Dorian
2 months ago

Hello
I have a registered company since 2016, with 3 years of audit. It has a bank account with. I am down to sell it for 6,500USD. Secretary fees already paid until April 2021. So you do not need to worry about next year fees. Contact me for more details. Regards