New Inspection Regime for Hong Kong Companies: Phase 2 from October 24, 2022

Posted by Written by Gigi Wong Reading Time: 5 minutes

A new inspection regime is being implemented under the Hong Kong Companies Ordinance, which provides additional protection to the personal information of directors and other relevant individuals who appear on the Companies Registry. The inspection regime has been divided into three phases, with phase 2 to commence on October 24, 2022. We discuss how the inspection region will work and the relevant requirements for companies in Hong Kong.

On August 23, 2021, the new inspection regime under the Companies Ordinance (Cap. 622) came into effect.

Under the new inspection regime, (a) correspondence addresses instead of usual residential addresses (“URAs”) of directors and (b) partial identification numbers (“IDNs”) instead of full IDNs of directors, company secretaries, and other relevant persons like liquidators, will be made available on the Companies Register for public inspection. Meanwhile, companies can withhold the URAs and full IDNs (except the first part) on the registers where the information is maintained from public inspection. (The first part of the IDN is decided by an established rule, which is usually the first half of the sequence number if the IDN is an even number or the part that begins with the first character in the sequence and ends with the character that falls on the middle of the sequence if the IDN is an odd number.)

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The URAs and full IDNs are regarded as “Protected Information” under the new inspection regime. Previously, the URAs and full IDNs of any company’s director, company secretaries, or other relevant persons could be accessed by the public. By replacing URAs and full IDNs with correspondence addresses and partial IDNs, the protection of personal information will be enhanced. At the same time, it will ensure the transparency of the Companies Register by allowing the public to access it for the purposes stipulated under the Companies Ordinance (Cap. 622).

Since substantial modifications are being made to the integrated Companies Registry Information System (“ICRIS”), the new inspection regime will be implemented in three phases. The respective commencement dates of each phase are: August 23, 2021 (phase 1); October 24, 2022 (phase 2); and December 27, 2023 (phase 3).

Phase 1: In effect from August 23, 2021

Under this phase, companies may replace URAs of directors with correspondence addresses and full IDNs of directors and company secretaries with their partial IDNs on their own registers for public inspection.

According to relevant provisions of the Companies Ordinance (Cap. 622), upon the commencement of Phase 1, a company’s register of directors is required to contain a correspondence address of its director (including reserve director) who is a natural person, and such address must not be a post office box number.

But the Companies Ordinance (Cap.622) also provides transitional arrangements to this requirement: The register of directors need not contain a director’s correspondence address before the first annual return date on or after the commencement date of phase 2 – unless the director’s particulars are first entered, or changes are made in the register of directors on or after the commencement date of phase 2.

Upon the commencement of phase 2, this transitional arrangement will expire. That is to say, the register of directors must contain a director’s correspondence address before the first annual return date on or after the commencement date of phase 2. Directors who do not want to use their company’s registered address or principal place of business in Hong Kong as their correspondence address must report their relevant correspondence addresses to the Company Registry within 15 days after October 24, 2022.

Under this phase, in addition to replacing the Protected Information with correspondence addresses and partial IDNs, a company may withhold from public inspection the URA and full IDN (except the first part) of a director (including a reserve director) contained in its register of directors, and the full IDN (except the first part) of a company secretary contained in its register of company secretaries. However, this is NOT a mandatory requirement.

Phase 2: Commencing on October 24, 2022

Under phase 2 of the new inspection regime, Protected Information on the Index of Directors on the Companies Register will be replaced with correspondence addresses and partial IDNs for public inspection. Documents containing Protected Information that are filed for registration – after the commencement of this phase, i.e., October 24, 2022 – will not be provided for public inspection, except for “specified persons” upon application.

The following specified persons can apply for access to Protected Information on the Companies Registry:

  • Data subject
  • A person who is authorized in writing by a data subject to obtain the information
  • A member of the company
  • A liquidator
  • A trustee in bankruptcy
  • A public officer or public body
  • A person specified in the Schedule to the Regulation
  • A solicitor or foreign layer who practices law in a law firm
  • A certified public accountant (practicing)
  • A financial institution or designated non-financial businesses and professions

Companies need to prepare the registers of directors and company secretaries with correspondence address and partial IDNs available for public inspection – no later than the first annual return date or the dates the particulars are first entered and / or updated after the commencement of phase 2, whichever is earlier.

To be more specific, Hong Kong companies should perform the following tasks:

  • To confirm the correspondence address of natural person director(s) (including reserve director). To be noted, the registered office address or the director’s residential address can be used as director’s correspondence address.
  • To enter the correspondence address of natural person director(s) and partial IDNs into the register of directors kept by the local company before its first annual returns date on or after the commencement date of phase 2.
  • To deliver specified forms for registration to the Companies Registry if:
    1. immediately before the commencement date, a natural person director’s correspondence address was contained in the register of directors and such address was not the address of the company’s registered office; or
    2. an address other than the address of registered office of a local company or the address of the principal place of business in Hong Kong of a registered non-Hong Kong company is to be used as the correspondence address of a natural person director.

Phase 3: Commencing on December 27, 2023

Data subjects (i.e., individuals whose URA and full IDNs are contained in documents filed with Companies Registry before the new inspection regime’s commencement) can apply to the Companies Registry for withholding their Protected Information contained in documents registered with the Companies Registry from public inspection and replace such information with their correspondence addresses and partial IDNs.

Same as phase 2, the specified persons can apply to the Registry for access to the Protected Information of directors and other persons.

Quick takeaway: How can my company prepare?

To summarize, upon the full implementation of all three phases of the new inspection regime in Hong Kong:

  • Only the correspondence addresses of directors and the partial IDN of directors, company secretaries, and other relevant persons will be shown in the registers maintained by the Companies Registry.
  • Only specified persons can apply for access to the URA and full IDN of directors, company secretaries, and other relevant persons, with limited exceptions.
  • Companies can withhold from public inspection the URAs and full IDNs (except the first part) on the registers where the information is maintained.
  • Data subjects can apply to the Companies Registry to withhold from public inspection their Protected Information that is contained in documents registered with the Registry.

Hong Kong’s new inspection regime will provide additional protection to the personal information of company directors and other relevant individuals that appear on the Companies Registry. To meet the requirements of this new regime, and if data subjects and Hong Kong registered companies want to withhold their Protected Information from public inspection, they should contact their service provider to update the personal information accordingly and make corresponding applications.

(This article was first published on January 4, 2022, and was last updated on October 21, 2022.)

China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done so since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.

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