TL;DR
- "Accounting" covers four jobs: bookkeeping, financial statements, the audit and tax. A low quote may cover only one of them, so check which.
- The company has to keep accounting records for seven years, have its accounts audited every year unless it's formally dormant, and file its profits tax return with the audited accounts and a tax computation.
- The auditor has to be an independent Hong Kong CPA practice. We prepare the accounts and a separate firm audits them.
- Our plans go from HK$3,800 to HK$18,800 a year depending on revenue. The audit fee is on top.
Bookkeeping
This is recording what happens: invoices out, bills in, bank movements, expenses, payroll. The Companies Ordinance requires the company to keep accounting records that show and explain its transactions and financial position, and to preserve them for seven years after the end of the financial year they relate to. The duty is the company's, and the directors answer for it if the records aren't there. These days that means a ledger in something like Xero, reconciled to the bank.
You can do it monthly or yearly. Monthly means the books are closed every month and you get management accounts, so you can see how you're doing while the year is still running. Yearly means someone enters the whole year in one go before the audit, which is fine for a company that isn't trading much yet. Once there's real revenue, a yearly catch-up leaves you managing off the bank balance for twelve months at a time.
Financial statements
At year-end the ledger gets turned into statutory financial statements: a balance sheet, an income statement and notes, with a directors' report alongside. Most small private companies qualify for the reporting exemption in the Companies Ordinance, which lets them use the SME Financial Reporting Framework. That's a lot lighter than full HKFRS, and the cash flow statement is optional. Preparing statutory accounts is a different skill from bookkeeping, so ask any provider who prepares theirs.
The audit
A Hong Kong CPA practice audits those statements and reports on them to the shareholders. The Companies Ordinance requires this of every limited company, every year, regardless of size, and the one exception is a company that's formally dormant under the Ordinance. There's no small-company exemption of the kind the UK and Singapore have.
The fee depends largely on how clean your books are, because the auditor is charging for time and messy books mean more questions. The auditor also has to be independent. By law an officer or employee of the company can't be appointed, and the profession's ethics code limits how far an audit firm can prepare the accounts it then audits. In our set-up your accountant prepares the accounts and coordinates the audit, and a separate CPA firm signs the report.
Tax
The audited accounts support your profits tax return. The IRD issues returns in bulk at the start of April (1 April in 2026), due a month from the date of issue unless your tax representative has an extension, and each one needs a tax computation showing how your accounting profit turns into taxable profit. Under the two-tiered regime a corporation pays 8.25% on the first HK$2 million of assessable profits and 16.5% above that. If you've several connected companies, only one of them can take the 8.25% tier.
There's more if you have staff. The IRD issues the employer's return on 1 April as well, due within a month, and if you've got staff to report and nothing has arrived by mid-April you should ask for one. On top of that there are IR56 forms when people join and leave, and MPF contributions by the 10th of each month.
What a proper fixed fee covers
A proper fixed fee covers bookkeeping at whatever frequency you agree, the year-end close, the statutory accounts, the tax computation and return, the employer's return, and dealing with the auditor. A good quote also says plainly whether the Xero subscription and the audit fee are in or out, and names who you'll talk to when you've got a question.
Our Basic plan is HK$3,800 a year for companies under HK$300K revenue. That's an annual close, the accounts and help with the tax return. Full-Service starts at HK$5,800 for companies under HK$500K and goes up to HK$18,800 for revenue up to HK$5M. It adds monthly bookkeeping, monthly management accounts, Xero, audit coordination and a qualified accountant on hand. The audit firm quotes separately once they've seen your numbers, and because our pricing goes by revenue band, you know our cost before the year starts.
Where money actually gets wasted
Most of the avoidable cost comes from a handful of habits. Paying for things out of the wrong account and untangling it afterwards is one, along with not keeping receipts and taking money out without deciding whether it's salary or a dividend. Leaving the whole year until audit season means paying the auditor to sort it out, and tax deadlines get missed because nobody noticed the return had arrived. A monthly close with someone watching the dates deals with most of this.
Switching accountants
You can move whenever you like. The tidiest time is just after a year-end, once your old firm has finished that year's accounts. The new firm will need your trial balance, the last audited accounts, the tax file and access to your software. We handle getting all that from your old firm, and your statutory filing dates stay where they are.
