As of May 23, 2025, a new law in Hong Kong allows foreign companies to transfer their registration to the jurisdiction without liquidation or re-incorporation. This legislative development offers a promising avenue for companies, especially those affected by sanctions and legal restrictions in foreign countries.
What is redomiciliation?
Redomiciliation refers to the transfer of a company’s legal domicile from one jurisdiction to another without terminating its legal existence. The new Hong Kong law enables such transitions while preserving the company’s legal continuity, assets, liabilities, and operational history.
Why is this relevant to Russian businesses?
Many Russian businesses engaged with international partners or operating through foreign structures are now seeking more reliable jurisdictions. Traditional options—like the UAE, Armenia, Kazakhstan, or Cyprus—are increasingly constrained or subject to regulatory pressure. Hong Kong offers a legally and economically stable alternative.
Key advantages of redomiciliation to Hong Kong
• Legal continuity: no need to wind up the original entity or set up a new one.
• Double Taxation Agreement (DTA) with Russia since 2017, including:
- Dividends: 5% (for holdings of ≥15%) or 10% otherwise;
- Interest: 0%;
- Royalties: 3%.
- Favorable tax regime:
- Corporate tax at 8.25% on the first HKD 2 million of profits, 16.5% thereafter;
- No VAT, capital gains tax, or dividend tax.
• Global connectivity: Hong Kong remains a leading financial hub with free capital flows and a robust banking sector.
• Transparent regulatory framework: The new law supports existing corporate and tax planning tools.
What to keep in mind
• Legal practice is still emerging: Although the law is in force, there is limited case law or administrative guidance.
• Banking risk: Entities with Russian beneficiaries may face enhanced compliance checks when opening Hong Kong bank accounts.
• Political considerations: Since 2020, Hong Kong’s national security law has raised concerns about its autonomy, though the business environment remains operationally stable.
Next steps for interested companies
If your company is considering redomiciliation to Hong Kong:
• Analyze relevant corporate and tax regulations;
• Evaluate reputational and operational risks;
• Seek preliminary legal advice and verify banking options.
How we can help
Our firm has extensive experience supporting cross-border corporate matters. We can:
• Provide a preliminary legal assessment of your corporate structure;
• Develop a redomiciliation plan in compliance with Hong Kong law;
• Liaise with regulators and company registries throughout the process;
• Coordinate with tax advisors and financial institutions.
If you are considering moving your business to Hong Kong, we would be happy to assist and explore solutions tailored to your needs.
Additional Resources
• Companies Registry External Circular No. 4 / 2025 (PDF): This document outlines the key provisions of the new redomiciliation regime, including eligibility requirements for companies, the application process, and ongoing obligations. https://www.cr.gov.hk
• Overview of the redomiciliation regime on the official Companies Registry website: https://www.cr.gov.hk/en/legislation/co2025/redomiciliation/overview.htm
• Information from the Hong Kong Inland Revenue Department on the tax implications of redomiciliation: https://www.ird.gov.hk/eng/tax/bus_redomiciliation.htm
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This material is for informational purposes only and does not constitute legal advice. For specific inquiries, please contact us at info@danilovpartners.com.