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.
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.
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 our answer on changing the year end), but changes come with limits, so choose carefully at the start.
Legal basis
- Companies Ordinance (Cap. 622), ss.367, 369
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).
- 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 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.
- 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.