What Is "Business Not Commenced" Status Hong Kong?

Kristina Coluccia
May 5
3 min read

Updated: Jun 16

Starting a business in Hong Kong is a strategic move for many entrepreneurs and multinational companies due to its efficient incorporation process, favorable tax regime, and international reputation. However, if your Hong Kong entity has been incorporated but never engaged in any business activity, you may be eligible for a significant administrative relief.

What Is "Business Not Commenced" Status?

If your Hong Kong company has:

Never opened a corporate bank account,
Never executed any commercial agreements, and
Never conducted any transactions (sales, purchases, expenses, payroll, etc.),

then it may be classified as a non-operational or dormant company. This status, when formally declared, may exempt you from the obligation to submit an audit report to the Inland Revenue Department (IRD).

This can be a cost-effective way to maintain the company if you are not yet ready to launch operations but wish to retain the entity for future use or strategic purposes.

Why Business Not Commenced Status Matters in Hong Kong

Declaring your company as dormant:

Reduces compliance costs by eliminating the need for annual audits.
Simplifies tax filings, making it easier to maintain your company.
Preserves your business structure for future plans without incurring full operational overhead.

However, it's important to make this declaration formally and accurately to avoid penalties or assumptions by the IRD that your company is active.

Questions to Ask Yourself

Before declaring dormant status, consider the following:

Have you ever opened a corporate bank account for the company?
Has the company signed any contracts, agreements, or invoices?
Have there been any financial transactions whatsoever?

If the answer is no to all of the above, your company may qualify for "business not commenced" status.

Fast-Track Your Compliance

At Woodburn, we help you navigate the process with clarity and efficiency. Here’s how we support you:

Initial Assessment: We begin by confirming with you that the company has remained inactive since incorporation.
No Bank Account Verification: We ensure there's no financial activity, including the absence of a company bank account.
Tax Representation Appointment: Once inactivity is confirmed, you can formally appoint Woodburn as your tax representative.
IRD Filing: We prepare and submit the necessary filings to the IRD to declare your company as dormant, ensuring full compliance.

Transparent Pricing

Our straightforward fee structure ensures you know exactly what to expect:

Tax Representative Fee: USD 800 per assessment year.

This includes all correspondence, document preparation, and submission to the IRD.

Why Partner with Woodburn?

With extensive experience in Hong Kong business compliance, Woodburn offers more than just paperwork processing. We provide:

Expert advisory services to keep you compliant and informed.
Custom-tailored strategies if you plan to activate your company in the future.
Responsive, multilingual support so you never feel left in the dark.

Ready to Secure Your Dormant Status?

If you believe your Hong Kong company has never commenced business, don’t wait for IRD deadlines to catch up with you. Let Woodburn ensure your filings are accurate, timely, and fully compliant.

Contact us today to confirm your company’s status and appoint us as your trusted tax representative. It’s a simple step that can save you time, money, and future complications.

Woodburn Accountants & Advisors is one of China and Hong Kong’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.