Hong Kong acts as a strategic link between the markets of the East and West, acting as a gateway to Mainland China and Asia’s other rapidly expanding economies.
This special administrative region (SAR) of the People’s Republic of China offers companies a world-class infrastructure, a business-friendly regulatory environment, and a straightforward tax regime with competitive rates. For these and many other reasons, the World Bank ranks Hong Kong third globally for Ease of Doing Business, highlighting its appeal as an international hub for commerce, trade and finance.
Considering these significant attractions, Hong Kong experiences a considerable influx of both domestic and international businesses. In early 2024, the Companies Registry reported that 132,246 local companies were newly registered in Hong Kong in 2023. By the end of the year, the total number of local companies registered under the Companies Ordinance reached 1,430,758, marking an increase of 39,080 compared to 2022.
With such a pace of growth in the market, it can be challenging to ensure that every business partner adheres to legal and ethical standards, highlighting the importance of rigorous Know Your Business (KYB), Ultimate Beneficial Owner (UBO) and Know Your Customer (KYC) checks.
A strategy for effective business verification
Any company that is entering or expanding into the Hong Kong market should implement a robust strategy to verify the legitimacy and good standing of potential commercial partners. Whether forging new business relationships, onboarding merchants or welcoming potential customers, it’s crucial for companies to thoroughly understand the identities of these entities and individuals.
By accessing the right data and documents, and using reliable verification tools, companies can reduce the risk of partnering with organisations that are unregistered, non-compliant with local regulations, or involved in fraudulent or illicit activities. This diligence is essential for maintaining compliance and safeguarding business operations.
Business registration rules in Hong Kong
Under the Inland Revenue Department’s (IRD) Business Registration Ordinance, every person who operates a business in Hong Kong must apply for business registration within one month from the date of commencement of the business. If any of the company’s registered details change, the owner must inform Inland Revenue in writing within one month. The IRD keeps a record of all registration applications and any reported changes in the Business Register. The public can access information from the Business Register for a fee.
In December 2023, Hong Kong’s Companies Registry launched a significant upgrade with its revamped Integrated Companies Registry Information System (ICRIS), along with a new e-Services Portal. Simultaneously, a major reform was introduced with the implementation of the Unique Business Identifier. This initiative simplifies the identification process by using the business registration number assigned by the IRD as the universal identification number for all entities under the administration of the Registrar of Companies. These changes are part of ongoing efforts to streamline business operations and improve regulatory compliance in Hong Kong.
How to verify a company in Hong Kong:
Step 1: Search for essential registration information
The data organisations need to source and verify includes:
- Company name – both Chinese and English
- Business registration number (BRN)
- Company status
- Company incorporation date
- Type of ownership (i.e., “Limited company by shares”)
- Total value of shares
- Total paid up capital
- Last date of capital updates published
Step 2: Find details on key personnel and ownerships
Up-to-date, verified information on the following is required:
- Officers
- Directors
- Shareholders
- Share proportion
- Registered capital
Step 3: Access key legal documents
Obtaining and reviewing the following legal documents and information helps to verify the legitimacy and legal standing of a business or individual.
- Annual return and accounts/financial statements
- Directors, company secretary and authorised representatives
- Incorporation/registration and change of name
- Mortgages and charges
- Receivership, liquidation, deregistration, striking off, dormancy and court orders
- Registered office, location of registers and addresses of registered non-Hong Kong companies
- Share capital structure
Step 4: Identify ultimate beneficial owners
Identifying and verifying the beneficial owners of a potential business partner or merchant’s company is a critical compliance step. This process helps ensure adherence to both local and global anti-money laundering (AML) and counter-terrorism financing (CTF) regulations, mitigating the risk of financial crimes.
Hong Kong has implemented specific measures to enhance the transparency of corporate entities through its Companies Ordinance, including mandating companies to maintain a Significant Controllers Register (SCR). The SCR must include information about the company’s significant controllers, who are essentially the beneficial owners. The goal is to make the ownership and control structures of companies more transparent and traceable. The SCR is made available to law enforcement and other authorities, but is not currently open to public inspection.
How can organisations access all the information they need?
It’s possible to manually search for some of this information online using the e-Services Portal of the Companies Registry at www.e-services.cr.gov.hk.
Free search services include:
- Basic company details: Information on the company type, date of incorporation, registration or dissolution, and the history of any company name changes.
- Historical and current names: Access to current and previous names of all companies on the Companies Register, including those that have been dissolved.
- Document filings: A list of all documents filed by companies that are registered and pending registration. This includes names, filing dates and file sizes of image records.
- Registered charges: A list of a company’s registered charges, including a brief description of each charge, its registration number, and the dates of creation and registration.
- Disqualifications: Names of individuals and corporate entities currently disqualified by the court from acting as directors or holding other specified offices.
For a fee, organisations can access more detailed information, including:
- A summary of key details for a selected company: Including details on the registered office address, principal place of business, authorised representatives, share capital structure, shareholders, current directors and reserve directors, and the company secretary.
- Disqualification details: Specifics from the disqualification order made against an individual or a corporation, selected from the Disqualification Orders Index.
- Digitised images of registered documents
Automate the process with AsiaVerify
One of the most efficient ways to verify a Hong Kong company is by using an automated verification service like AsiaVerify. AsiaVerify leverages data from the Hong Kong Companies Registry and other public data sources in Hong Kong to instantly verify company information and generate a report on the company profile, shareholding information, beneficial ownership, and more.
Streamline the Verification Process
Using an automated verification tool like AsiaVerify can help streamline the KYC and client onboarding processes. Instead of having to manually look up records and compile reports, compliance officers are able to get an instant snapshot of any Hong Kong registered company. This includes information on:
- Company registration details including incorporation date, company number, registered address, etc.
- Director and shareholder information
- Latest reports filed with the Companies Registry
- Beneficial ownership structure and ultimate holding companies
and many more
Reduce Compliance Risks
Automating the verification process also helps reduce compliance risks. Manual checking of public records is prone to human error and can allow falsified documents to slip through the cracks. By accessing data directly from the official registries and records in Hong Kong, AsiaVerify is able to provide accurate and up-to-date information on companies to support KYC and AML compliance programs.
Using a tool like AsiaVerify, compliance teams can instantly get a comprehensive overview of any Hong Kong company to support their verification and onboarding processes. The automated reports provide the transparency and auditability needed to ensure regulatory compliance while improving operational efficiency. For financial institutions conducting business in Hong Kong, an automated verification service is invaluable.
Conclusion
In summary, verifying a Hong Kong company requires diligence and patience. While the process may seem complicated, following the proper steps and guidelines will ensure you obtain accurate and verified information about the company. Verification provides critical insights into a company’s legitimacy and risk profile. By verifying companies in Hong Kong and beyond, you gain a holistic view of your customers and business partners. This in turn allows you to make informed decisions, reduce risk exposure, and build trusted relationships.
With the right approach, verifying a company in Hong Kong can be straightforward. Stay organised, leverage available resources, and don’t hesitate to ask questions to complete the verification thoroughly. Your due diligence efforts will pay dividends through enhanced risk awareness and compliance.
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