What accounting should I set up when I start a new Hong Kong company?
Open a company bank account, choose your financial year end within 18 months of incorporation, set up a ledger or software with a clear chart of accounts, and start filing documents from day one. Appoint someone to keep the books, and arrange an auditor and an accountant early.
First-month checklist
- Bank account in the company's name. Use it for all company receipts and payments.
- Financial year end: directors may specify the first accounting reference date, within 18 months after incorporation. If not, the default is the last day of the month of the first anniversary (s.369).
- Ledger or software with a simple chart of accounts, including separate accounts for director loans and share capital.
- Document system: one folder (paper or digital) for sales invoices, supplier bills, bank statements, contracts and payroll, set up from the first transaction. Records can be digital if they can be reproduced on paper and are protected against falsification (s.376).
- Record-keeping rules: the company must keep records that explain transactions and show assets and liabilities (s.373), for seven years (s.377). The IRD requires records in English or Chinese (s.51C).
- Payroll and MPF if you hire: enrol employees and set up the monthly contribution routine.
- Business registration: keep particulars up to date; changes must be notified within one month.
- Advisers: line up an accountant and an auditor before the first year end, because every year needs an audit (s.394).
Setting up properly in month one is far cheaper than reconstructing the records later.
Legal basis
- Companies Ordinance (Cap. 622), ss.369, 373, 376, 377, 394
- Inland Revenue Ordinance (Cap. 112), s.51C
Sources
Applies to 2026 · Last reviewed 29 October 2026
General information for business owners, not legal, tax or professional advice. Rules change, so check the sources or ask a licensed professional before you act.
Related questions
- Does the Business Registration Ordinance require me to keep accounting records?Not directly. The Business Registration Ordinance deals with registering the business and notifying changes, such as a new business address or name, within one month. The duty to keep accounting records comes from the Companies Ordinance (for companies) and section 51C of the Inland Revenue Ordinance (for all businesses).
- How do I choose the financial year end for a new Hong Kong company?Directors can specify the first (primary) accounting reference date, as long as it falls within 18 months after incorporation. If no date is specified, the default is the last day of the month in which the first anniversary of incorporation falls. Choose a date that suits your business cycle and workload.
- What is a chart of accounts and how should a small Hong Kong business set one up?A chart of accounts is the numbered list of categories your ledger uses: assets, liabilities, equity, income and expenses. Keep it short, consistent and aligned to the statements you must produce. Separate accounts for director loans, MPF, tax and foreign-currency balances make year-end work easier.
- What is the difference between bookkeeping and accounting in Hong Kong?Bookkeeping is the day-to-day recording of transactions: sales, purchases, payments and receipts. Accounting uses those records to prepare financial statements, interpret results and support tax and audit work. In Hong Kong the law cares about both: the company must keep adequate records, and its directors must prepare financial statements from them.
- Is a Hong Kong company legally required to keep accounting records?Yes. Section 373 of the Companies Ordinance (Cap. 622) requires every company to keep accounting records that explain its transactions and show its financial position and performance at any time. Directors who fail to take all reasonable steps risk a fine of HK$300,000, and up to 12 months' jail if the failure is wilful.