What Is a Compliance Calendar in Hong Kong?
A fundamental tip for any entrepreneur is to ensure all the legal records and paperwork are up to date! A compliance calendar is a helpful tool to lower any potential risk of missing important deadlines. With a compliance calendar, you can organise and manage all deadlines, obligations, regulatory requirements and documents. To understand the functionality of a compliance calendar, let’s look at the types of compliance calendars in Hong Kong.
Types of Compliance Calendars in Hong Kong
There are mainly three types of compliance calendars available in Hong Kong. You can choose any of them according to your business type and needs. Here is a description of some popular calendars methods.
Software compliance calendars are best for companies that are said to be large-scale or highly regulated. This compliance calendar software helps to manage unlimited tasks and provides reports and a dashboard of your company’s compliance status. It has many features from automated reminders to documentation outlook.
Spreadsheets such as Google Sheets or Microsoft Excel work best when the number of deadlines and workload are manageable. If the workload increases, working on a spreadsheet could become more challenging. Therefore, this is a cost-effective method to manage all deadlines.
You can also manage your upcoming task on the outlook calendar. However, this method might be messy at presenting a clear image of your regulatory requirements. And there are still chances that you may risk your significant task.
Advantages of Using a Compliance Calendar
Now that we have a brief idea of the different types of compliance calendars, let’s look at compliance calendar advantages.
With the help of a compliance calendar, you could form visibility across the company. All compliance measures will be able to be monitored. Even your board members will stay updated with all the compliance information, which will further help remove any uncertainty.
A compliance calendar can also improve efficiency by providing information on tasks such as:
- How to fulfill specific tasks
- Knowledge from previous tasks
- Information on the documents that are required
- Easy to handover the task from one person to another
It will also help save a lot of time which you and your coworkers can utilize elsewhere.
Compliance Reports and Audits
A well-managed schedule permits your compliance auditors to check the compatibility of your business with every compliance obligation. Further, this will allow the compliance auditors to keep in check with the strategically managing compliance auditors.
With the help of a compliance calendar, you can train your employees on applicable compliance measures and all the latest ongoing information. Therefore, the compliance calendar can be a great tool to help train the team on applicable compliance measures while keeping employees up to date.
A compliance calendar can help you in remembering dates by assigning automated reminders. It will help you remember all the upcoming events and due dates. Often with the international team, it is important to remain in touch and work collaboratively which is easily monitored by the compliance calendar.
How to Make a Compliance Calendar in Hong Kong?
Here are steps on how you can get started with making a compliance calendar in Hong Kong.
Identify and Review Existing Compliance Manual
All companies should have one compliance manual. Review the existing compliance calendar and check if there is a need for any new initiative or regulation for your company. Examine the current compliance program and reflect on how you can enhance it. You can add new elements based on new regulations and eliminate programs that are no longer relevant to your business. If a company does not have it then it is the responsibility of the higher authorities to create a manual according to which the company could run smoothly.
Organise the Task Based on the Industry
Your compliance calendar might include current, yearly, monthly or weekly tasks. It is essential to match them with your business obligations for the smooth functioning of internal processes. For high-risk areas, frequent and vigilant compliance management is needed.
Automate the Process
Automated software for compliance calendars will provide a technical outlook to your company. This makes the task easy for compliance officers, who can assist in fulfilling your business needs.
Finalise and Implement the Calendar
Once you have finalised the compliance calendar, formulate it in your company and ensure you provide proper training and education to your employees. Educate them on proper execution processes and how to complete tasks. Set up reminders for your employees to review the compliance calendar.
Also, check your compliance calendar regularly so that you can add new features and technologies, so that you can cope with the ongoing requirements of the company.
Annual Compliance in Hong Kong
Annual filing means that all the companies registered within the region have to file an annual return with Company Registry (CR). It includes the details of directors, shareholders, registered address, and company secretary. Companies in Hong Kong must also submit annual profit tax returns with IRD (Inland Revenue Department).
Important Requirements for Annual Compliance
Conducting research before launching your business in Hong Kong is necessary. Here’s a detailed annual requirement for compliance:
- Prepare a local secretary for your business entity; it can be a corporate body or even an individual.
- All private companies in Hong Kong should possess the necessary permits and licenses for their industry.
- It is required to have a local registered address other than a P.O. Box for your private company.
- Your company should have at least one director. The requirement for being a director is that the person should be above 18 years, irrespective of whether he is a Hong Kong resident or a foreigner.
- You should maintain an audit to show the details of the accounting transactions of the company.
- Your company should have at least one shareholder. The requirements for shareholders are the same as directors.
- You must provide detailed accounting transactions to prove the business’s assessable profits.
- Records and documents should be well-maintained for seven years from the transaction period.
- All documents must be well-maintained. This includes incorporation certificates, identification documents, company sealing, number registers, share registers, financial records, business meetings, and certificates.
- Official renewal of the registration documents one month before the expiry date in every interval of three months annually.
- Entrepreneurs should follow all the annual filing documentation requirements and meet the deadlines of the authorities in Hong Kong.
Annual Return Tax Filing
It is a well-known fact that Hong Kong has a minimum taxation rate for businesses. Even though it may be minimal, every taxpayer or business is still obligated to follow the taxation policy precisely.
The local government has mandated that individuals and businesses that need to pay taxes must submit their tax returns to the IRD on time. This has its benefits, such as claiming deductions and tax allowances on time. Similarly, filing an annual tax return is highly recommended for every private company in Hong Kong.
However, individuals who are not earning any income or have salaries below their allowances are exempt from paying taxes to the government. They receive a tax return issued by the IRD, which they must complete timely before the due date.
Due Dates for Filing an Annual Return
The due date for a private company to complete the documents and file an annual return is 42 days after the incorporation anniversary date of the company. This period applies to all the companies working in the Hong Kong region.
Important Dates for Compliance Calendar in Hong Kong
|Documents To File
|What Happens Next
|Profits tax return
|The IRD department will issue a profit and tax form for all the companies settling up in Hong Kong. The company is asked to reply within a month.
|You must submit your employer's return within a month.
|Within 42 days of incorporation
|Annual reports would be submitted to the companies registry.
|Renewal every year or every three years (depending on your choice)
|Business registration renewal
|You will have to renew your business registration at least one month before the expiry.
|In the first 18 months after incorporation, once every calendar year but not exceeding 15 months from your last AGM.
|Annual General Meeting (AGM)
|AGM holding essential. Also the financial report should also be presented in HKFRS.
Penalties for Non-Filing Annual Compliances
As mentioned earlier, if you fail to file your annual compliances in Hong Kong, you could get into legal trouble, such as fines and penalties.
According to the notice issued by the Office of the Privacy Commissioner for Personal Data, non-filing annual compliance with enforcement is a criminal offence. The convicted party must pay a fine of HKD 50,000 and two years of imprisonment. Moreover, if the guilty continue the same offence even after the conviction. Then, a daily fine of HKD 1,000 will be imposed.
Non-compliance with direct marketing is also a punishable offence under which a maximum fine of HKD 1 million and five years of imprisonment can be imposed.
Anti-doxxing provision suggests the penalty of summary offence with a fine of HKD 100,000 with two years of imprisonment. And the maximum fine of HKD 1 million and five years imprisonment.
Get a Consultation for Your Annual Filing in Hong Kong
Many entrepreneurs in Hong Kong need help with annual filing and completing their paperwork while starting up their businesses. However, this is now made easy!
We at Startupr furnish our customers with remarkable assistance in tax filings and all other procedures that people usually find difficult to cope with. Contact us today to book a call from us and get things done!