How do I choose the financial year end for a new Hong Kong company?

Under section 369 of the Companies Ordinance, for a company formed under the current Ordinance:

• Directors may specify the primary accounting reference date before the default date arrives, and that date must fall within 18 months after incorporation.
• If they do not, the default date is the last day of the month in which the first anniversary of incorporation falls.

So a company incorporated on 12 June 2026 with no election would have its first year end on 30 June 2027, giving a first period of just over 12 months. If the directors instead choose 31 March 2027, the first period is 9 months and 19 days.

Factors to weigh:

• Business cycle: a date after your busy season means stock counts and receivables are easier to settle.
• Group alignment: subsidiaries should generally share the parent's year end unless the directors see good reasons otherwise (s.367(4)).
• Workload: pick a month when you and your accountant are not already stretched.
• Practicality of the first period: a long first period means more transactions to audit at once.

The date can be changed later (see how to change your company's financial year end), but changes come with limits, so choose carefully at the start.