Director Duties and Corporate Compliance Essentials in Hong Kong
- Kristina Coluccia
- 6 days ago
- 3 min read
If you're operating or planning to set up a company in Hong Kong, understanding the legal responsibilities of directors—and the ongoing compliance requirements for your entity—is crucial. Directors are not figureheads; they play an active role in ensuring the company operates lawfully, ethically, and in line with Hong Kong’s Companies Ordinance.
Whether you're an executive on the ground or an overseas director, failing to meet these responsibilities can lead to personal liability and legal consequences.
Director Duties: More Than Just Oversight
Under Hong Kong law, directors owe both statutory and fiduciary duties to the company. These include:
Acting in good faith in the best interests of the company.
Using reasonable care, skill, and diligence in their decision-making.
Avoiding conflicts of interest and not making personal gains from company opportunities.
Ensuring compliance with the Companies Ordinance and other applicable laws.
In practical terms, this means directors are responsible for financial oversight, statutory filings, corporate governance, and accurate record-keeping. They are also expected to participate actively in board decisions and ensure proper controls are in place.
Non-compliance—such as failure to file returns, maintain registers, or hold meetings—can lead to penalties, disqualification, or personal liability, particularly if the director was directly involved in the breach.
Who Can Be a Director?
A private company must have at least one natural person as a director.
Corporate directors are permitted, but not in companies that are part of a group with a listed entity.
Directors can be non-residents, and there are no restrictions on nationality.
A sole shareholder can also act as the sole director.
However, the sole director cannot also be the company secretary, who must be either a local resident or a Hong Kong-based corporate service provider.
This structure is designed to ensure accountability, transparency, and local accessibility for official communications.
Key Corporate Compliance Requirements
Once your company is incorporated, it must meet several ongoing obligations. These include:
Annual General Meeting (AGM) – Required within 9 months after the end of the financial year for private companies, unless waived.
Annual Return – Must be filed within 42 days of the anniversary of incorporation, detailing directors, shareholders, and registered office info.
Audited Accounts – Required for most companies, though small private entities may be eligible for simplified reporting.
Significant Controllers Register (SCR) – A mandatory record of individuals or entities with significant control over the company, to be kept at the registered office.
Statutory Registers – Including registers of members, directors, secretaries, charges, and minutes of meetings.
Employer and Profits Tax Returns – Filed with the Inland Revenue Department annually.
Business Registration Certificate – To be displayed at every place of business and renewed annually or every three years.
Post-Incorporation Good Practices
Ensure your Articles of Association align with your operational needs.
Appoint the right mix of directors to provide strategic and compliant oversight.
Monitor your filing deadlines and resolutions, especially in the case of share capital changes, director appointments, or company name changes.
Maintain accurate and updated company records—these are not just best practices; they’re legal requirements.
Confidence Starts with Compliance
Hong Kong is one of the most business-friendly jurisdictions in Asia, but that doesn’t mean compliance is optional. A clear understanding of director obligations and corporate governance ensures your company stays on the right side of the law—and builds trust with banks, partners, and regulators.
Woodburn Accountants & Advisors helps companies stay compliant, informed, and protected. From managing your annual filings to acting as your company secretary, we take the administrative burden off your plate so you can focus on growing your business.
Woodburn Accountants & Advisors is one of China’s most trusted business setup advisory firms.
Woodburn Accountants & Advisors is specialized in inbound investment to China and Hong Kong. We focus on eliminating the complexities of corporate services and compliance administration. We help clients with services ranging from trademark registration and company incorporation to the full outsourcing solution for accounting, tax, and human resource services. Our advisory services can be tailor-made based on the companies’ objectives, goals and needs which vary depending on the stage they are at on their journey.