Small Group and Eligible Private Company Tests in Hong Kong

In short: bigger private companies and groups can still use simplified reporting if members holding 75% of the votes agree and nobody objects.

Small group. A private holding company qualifies automatically if the aggregate figures for the group meet any two of: revenue HK$100 million or less, total assets HK$100 million or less, 100 employees or fewer. The group may include non-Hong Kong companies (for financial years starting on or after 1 February 2019, per HKICPA).

Eligible private company or group. If a private company or group meets any two of: revenue HK$200 million or less, total assets HK$200 million or less, 100 employees or fewer, it can use the exemption only if:

• members holding at least 75% of the voting rights pass a resolution at a general meeting; and
• the remaining members do not vote against it (s.360).

Small guarantee companies and groups qualify automatically at HK$25 million of revenue or less.

Mixed groups of small, eligible and guarantee companies can also qualify, depending on the type of holding company.

Single-company route. A private company with no subsidiary and not itself a subsidiary can use the exemption for one year if all members agree in writing (s.359(1)(b)).

No group containing a bank, licensed securities firm, insurer or deposit-taker qualifies.