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.
Section 373 sets the duty. The records must be good enough to:
- show and explain the company's transactions;
- disclose, with reasonable accuracy and at any time, its financial position and financial performance; and
- let the directors check that the financial statements comply with the Ordinance.
The duty applies to every company, including one with no trading, one that is exempt from audit, or one that is dormant. It sits with the directors, not with an outside bookkeeper or the company secretary, although directors can delegate the work.
Separately, anyone carrying on a business in Hong Kong, including sole proprietors and partnerships, must keep records of income and expenditure under section 51C of the Inland Revenue Ordinance so that assessable profits can be worked out.
A company's duty is not met by keeping bank statements in a drawer. The records should be organised so that a director, auditor or the IRD can follow any entry back to its source document.
Legal basis
- Companies Ordinance (Cap. 622), s.373
- 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
- How long must a Hong Kong company keep its accounting records?Seven years. Under section 377 of the Companies Ordinance, a company must keep its accounting records for 7 years after the end of the financial year to which the last entry relates. The Inland Revenue Department separately requires business records to be kept at least 7 years after the transactions they relate to.
- What does section 51C of the Inland Revenue Ordinance require from my business?Anyone carrying on a trade, profession or business in Hong Kong must keep enough records, in English or Chinese, to work out assessable profits, and keep them for at least 7 years. Failing to do so without reasonable excuse can lead to a fine of up to HK$100,000.
- Which documents should a Hong Kong business keep for its books?Keep every document that supports an entry in your books: sales and purchase invoices, receipts, bank statements, contracts, payroll and MPF records, asset purchase papers, loan agreements, and stocktake sheets. The test is whether someone else could trace any figure back to its source.
- Can a Hong Kong company keep its accounting records digitally or scan paper originals?Yes. The Companies Ordinance allows records in hard copy or electronic form, provided they stay available for reference and can be reproduced on paper. The IRD also accepts electronic books and scanned source documents if integrity, legibility and origin details are preserved, and no prior approval is needed.
- What is a financial year end (accounting reference date) for a Hong Kong company?The accounting reference date is the date on which a company's financial year ends each year. Under the Companies Ordinance each accounting period normally runs 12 months from the end of the previous one, and the financial statements are prepared up to that date.