The Hong Kong company inward re-domiciliation regime was gazetted as law on 23 May 2025. Effective as of the gazette date, the regime establishes a framework for non-Hong Kong incorporated companies, regardless of size and economic substance in Hong Kong, to re-domicile to Hong Kong while preserving their legal identity and business continuity. Several committee-stage amendments were made to provide clarity on members' consent requirements, legal opinion specifications and solvency assessments. (For background of the related bill, see EY Global Tax Alert, Hong Kong publishes draft legislation for inward company re-domiciliation, dated 17 January 2025.)

The Hong Kong tax authorities also clarified that a re-domiciled company will be regarded as incorporated in Hong Kong for Hong Kong tax purposes and therefore also regarded as a Hong Kong resident for most Hong Kong comprehensive avoidance of double taxation agreements or arrangements. The certification of resident status will only be issued after the company has completed de-registration in its original jurisdiction. This certificate will indicate the effective date for re-domiciliation.

Although a re-domiciled company will not be subject to Hong Kong profits tax until it commences business in Hong Kong, certain expenditures incurred on research and development, plant and machinery and intellectual property before re-domiciliation may be eligible for tax deduction, subject to meeting certain conditions and valuation requirements.

The Hong Kong Companies Registry anticipates that re-domiciliation applications can be processed within two weeks if all documents are in order. New filing obligations and disclosure requirements for non-Hong Kong companies have also been established.

Implications

The inward re-domiciliation regime may facilitate access to tax treaty benefits, legal entity rationalization through court-free amalgamation, and characterization as a Hong Kong constituent entity for the purposes of the proposed Pillar Two Global Anti-Base Erosion (GloBE) Rules.