Stamp Duty on Transfer of Shares and Capital Duty on Increase of Capital of a Hong Kong Company

Stamp Duty on Transfer of Shares of a Hong Kong Company

The transfer of shares in a Hong Kong company (whether private or publicly quoted) must be stamped. The rate of duty is 0.1% payable by each of the purchaser and seller involved in a transaction, giving an effective rate of 0.2%. Duty is charged on the sales consideration or the fair market value, whichever is the higher.

In evaluating the fair market value, the Stamp Duty Office will normally accept the net asset value shown by the company’s audited accounts, subject to an upward adjustment to reflect a higher value for land and buildings than that shown in the accounts, where appropriate. No Stamp Duty is charged in the case of transfers of shares or immovable properties within a group of companies, where both parties are under 90% (or more) common ownership.

Capital Duty on Increase of Authorized Capital or Issued Capital of a Hong Kong Company

A Capital Duty 0.1% must be paid on the nominal value of and on any increase in authorized share capital of Hong Kong companies and on the issue of shares at a premium. The capital duty is capped at HK$30,000 in each case.