Dormant company in Hong Kong: section 5 and NAR1

A Hong Kong private company that has nothing going on can become a dormant company under section 5 of the Companies Ordinance (Cap. 622). It passes a special resolution declaring that it will become dormant and delivers that resolution to the Registrar of Companies. While dormant, it does not have to deliver annual returns, but it still exists, still needs its officers and registered office, and must still report changes to them. Dormancy ends when the company delivers a special resolution saying it intends to enter into an accounting transaction, or when it actually enters into one.

Dormant is a status you file for

A company that has simply stopped trading is not dormant in this sense. Without the special resolution on the register, it keeps every normal duty, including the yearlyannual return (NAR1), and late filing brings thelate fees and penalties. The rules below come from the Companies Registry’sdormant companies FAQ.

How a private company becomes dormant

1. Make sure the company has no accounting transactions planned. An accounting transaction ends dormancy, so a company that is still doing business is not a candidate.
2. Pass a special resolution declaring that the company will become dormant. The Registry publishes specimen special resolutions with its dormant companies FAQ.
3. Deliver the special resolution to the Registrar of Companies for registration.
4. Note the effective date. The company is dormant from the date the resolution is delivered to the Registrar, or from any later date the resolution specifies.
5. Check whether this year’s annual return is still due (see the next section).

The annual return in the year you go dormant

Section 663 of the Companies Ordinance says the duty to deliver an annual return does not apply to a dormant company. There is one catch. Theannual-return FAQsays a private company must still deliver an annual return for the year in which it declares itself dormant if the date it becomes dormant falls after the 42nd day after the anniversary of its incorporation.

A hypothetical example: a company incorporated on 20 October 2025 has its 2026 anniversary on 20 October 2026, and the 42nd day after it is 1 December 2026.

• If the resolution makes it dormant from 15 November 2026, that date is before the 42nd day, so no annual return is required for 2026.
• If it becomes dormant from 10 December 2026, that is after the 42nd day, so the 2026 annual return must still be delivered, with the late fee if it is late.

What still applies while dormant

Section 447 exempts a dormant company from certain provisions of the Companies Ordinance while it is dormant. The FAQ is clear about what those exemptions do not cover. The company must still report:

• a change in the address of its registered office, on Form NR1 within 15 days;
• changes of directors and company secretary, and of their particulars, on Form ND2A or ND2B within 15 days.

So a dormant company still needs a director, a company secretary and a Hong Kong registered office, and someone has to keep watching its post. Dormancy under the Companies Ordinance is a Companies Registry status. Tax returns and business registration are dealt with by the Inland Revenue Department under its own rules, so ask the IRD or your accountant how they apply to a dormant company.

How dormancy ends

A dormant company ceases to be dormant in either of two ways:

• it passes and delivers to the Registrar a special resolution declaring that it intends to enter into an accounting transaction; or
• there is an accounting transaction in relation to the company.

The Registry publishes specimen resolutions for this step too, such as itswritten special resolution signed by all members. Once the company is no longer dormant, the section 663 exemption stops applying and annual returns are due again. The FAQ explains what counts as an accounting transaction; read it before the company receives or pays any money.

Dormant or deregistered

If you will never use the company again, dormancy only delays the decision. The conditions and steps for closing it are inhow to close a Hong Kong company.

A company secretary normally drafts and files the resolution. Comparecompany secretary firmsin our directory. The Companies Registry decides what it registers, and this page is not legal or tax advice.