News and Events

Implementation of Two-Tiered Profits Tax Rate Regime

The Inland Revenue (Amendment) (No. 3) Ordinance 2018 (the Ordinance) was gazetted today (March 29) to implement the two-tiered profits tax rates regime announced in the 2017 Policy Address.

The two-tiered profits tax rates regime will be applicable to any year of assessment commencing on or after April 1, 2018. The profits tax rate for the first $2 million of profits of corporations will be lowered to 8.25 per cent. Profits above that amount will continue to be subject to the tax rate of 16.5 per cent. For unincorporated businesses (i.e. partnerships and sole proprietorships), the two-tiered tax rates will correspondingly be set at 7.5 per cent and 15 per cent. A tax-paying corporation or unincorporated business may save up to $165,000 and $150,000 each year respectively.

For details, please refer to the official website of the Hong Kong Inland Revenue Department.

Seychelles International Business Companies (Amendment) Act 2021

The Seychelles Government has recently enacted the International Business Companies (Amendment) Act 2021 effective from August 2021.

Summarizing some key points below: -

• Every company on the Register is required to submit and keep its accounting records at the company’s registered office in the Seychelles on a bi-annual basis
• Annual financial summary required for large companies and non-large non-holding companies

The accounting records need to be kept in either original form or electronic form. If a legal entity’s original accounting records are kept at a place other than in Seychelles, the legal entity must inform its Registered Agent in writing of the physical address of that place, according to section 175 (2) (2A) of the Act. It is important to note that the Seychelles’ authorities maintain the right to request for the original records. While the accounting records are required to be kept at the registered office in Seychelles, they are not required to be filed with the Registrar and are not open to public inspection.

With effect from February 2022, the Registrar expects to initiate its on-site compliance inspections to ensure that reliable accounting records are being kept by legal entities in Seychelles, and where non-compliance is identified, relevant sanctions will be applied.

An entity that contravenes section 175 of the Act (the “Section”) shall be liable to a penalty fee not exceeding US$10,000; a director who knowingly permits a contravention under the Section shall be liable to a penalty fee not exceeding US$10,000, according to sections 175 (5) and (6) of the Act.

For the amendment act details, please click the link at: International Business Companies (Amendment) Act, 2021 (or Amendment Act).

The Amendment Act includes new accounting record obligations applicable to entities registered in Seychelles, for details please click: New Accounting Record Obligations

Revenue (Stamp Duty) Ordinance 2021 gazetted – Increasing rate of stamp duty for sale or purchase of Hong Kong stock

The Revenue (Stamp Duty) Ordinance 2021 Gazette on June 11 raises the rate of stamp duty payable on contract notes for sale or purchase of Hong Kong stock from 0.1% to 0.13% of the consideration or value of each transaction payable by buyers and sellers respectively. It also correspondingly raises the rate of stamp duty payable on certain other transfers of such stock.

The new rate of Stamp Duty on Stock Transfers will come into effect on 1st August 2021. If your company have any share transfer that needs to be processed, you should consider to process it before 1st August 2021 to save stamp duty.

Source: https://www.ird.gov.hk/eng/ppr/archives/21061101.htm

Hong Kong - Phase 2 of the New Inspection Regime will commence on 24 October 2022

Phase 2 of the New Inspection Regime of the Companies Register under the Companies Ordinance (Cap. 622) will commence on 24 October 2022 (“the Commencement Date”).

Starting from the Commencement Date, sensitive personal information on the Index of Directors on the Companies Register and newly delivered documents will be protected. The Registry has revised 26 specified forms which pertain to the reporting of the above sensitive personal information for use starting from the Commencement Date. For details of the implementation of Phase 2 of the New Inspection Regime, please refer to the Companies Registry External Circular No. 3/2022 issued on 19 August 2022.

Two other External Circulars of even date, namely Companies Registry External Circular No. 4/2022 and Companies Registry External Circular No. 5/2022 which set out the details for “Major Changes in Filing Requirements” and “Major Changes in Public Search Service” respectively, have also been issued.

Waiver of registration fees for annual returns (NAR 1) delivered on time will end on 30 September 2022

1 September 2022

The two-year waiver of registration fees for annual returns (NAR 1) delivered on time pursuant to the Companies (Fees) (Amendment) Regulation 2020 which commenced on 1 October 2020 will end on 30 September 2022.

Eligible companies (i.e. companies whose made up date of annual return falls on or before 30 September 2022) shall deliver on time their annual returns for 2022 on or before 30 September 2022 in order to enjoy the waiver.

After 30 September 2022, registration fees will be required even if the annual returns of these eligible companies are delivered on time.

Cayman Regulatory Update – Companies (Amendment of section 254) Regulations, 2022

2022-07-15

According to the amendments to section 254 of the Cayman Companies Act (2022 Revision) (“Companies Act”), which was published in June 2022, Cayman companies are required to provide information identifying the individual from their unexpired and valid passport or other government-issued identification documents for beneficial ownership register (“ROBO”). In other words, passport or other government-issued identification documents which have expired could no longer be used by companies when providing identity details for beneficial ownership information purposes and the identification documents must be up-to-date.

Impact on Cayman companies and what they should do

1. In order to comply with the regulations, beneficial owner who is an individual is obliged to notify and provide their registered agent with their updated passport or other government-issued identification documents in a timely manner should the one previously provided has expired.
2. In order to comply with the regulatory requirements under the Companies Act to maintain an accurate and up-to-date beneficial ownership information, the ROBO shall also be updated accordingly.

Please note that the above measures are the requirements of the Cayman Islands legislation and that a company which fails to keep its ROBO up-to-date is an offence, it may be subjected to a fine.