Transferring Shares in a Hong Kong Private Company: Stamp Duty and Filings in 2026

The documents and the duty on a sale

Under the Stamp Duty Ordinance (Cap. 117), shares in a Hong Kong company are Hong Kong stock, and a sale needs three stamped documents: a bought note for the buyer, a sold note for the seller and an instrument of transfer signed by both. Each contract note carries 0.1% of the consideration or the value of the shares, whichever is higher, a rate in force since 17 November 2023, when it was cut from 0.13%. The instrument of transfer carries a fixed HK$5.

Because each note carries half of the 0.2%, buyer and seller normally bear 0.1% each unless the sale agreement says otherwise. Take a buyer who pays HK$2 million for shares that the company’s latest accounts value at HK$2.5 million. Duty is charged on the higher figure: HK$2,500 on each contract note plus HK$5 on the instrument, HK$5,005 in total.

A gift has no contract notes. Instead, the instrument of transfer is chargeable to the HK$5 fixed duty plus the full ad valorem duty on the value of the shares, which is 0.2% at current rates, and it must be stamped within 7 days of execution, or 30 days if executed outside Hong Kong. A transfer at par or a nominal price does not avoid duty, because duty follows value where the price is lower.

Valuation, deadlines and penalties

Unlisted shares have no market price, so the Inland Revenue Department’s Stamp Office ascertains value from the company’s latest accounts. Its stamping procedures ask for the latest annual return, any later return of allotment, the sale agreement (or confirmation that there is none), the latest audited accounts of the company and its subsidiaries, and resolutions on dividends paid since. If the audited accounts are not recent, management accounts certified within three months of the transfer are needed.

Practitioners generally treat net asset value per share as the starting point. Where the company or its subsidiaries hold Hong Kong property, a schedule of landed properties (Form IRSD102) is also required, and the value can reflect current property values rather than book cost. A low-priced transfer in a company with property or retained profits can cost far more than 0.2% of the price.

Contract notes must be stamped within 2 days after a sale made in Hong Kong, or 30 days after one made elsewhere, and the instrument of transfer before execution, or within 30 days if executed outside Hong Kong. Late stamping costs up to twice the duty if up to one month late, four times if one to two months late and ten times after that, though the Collector can reduce or waive it. Stamping can be done in person, by post or through e-Stamping.

Intra-group transfers: section 45 relief and the 2026 bill

Section 45 of the Ordinance exempts transfers of Hong Kong stock between associated bodies corporate. Currently, two bodies corporate are associated if one beneficially owns at least 90% of the other’s issued share capital, or a third owns at least 90% of each. The instrument must be adjudicated, with a statutory declaration and a group chart, and relief can be withdrawn if the companies stop being associated within two years. In June 2025 the Court of Final Appeal confirmed that an entity without issued share capital, such as a UK limited liability partnership, cannot qualify.

The Stamp Duty (Amendment) (No. 3) Bill 2026, gazetted on 2 October 2026 and introduced into the Legislative Council on 14 October 2026 (the Second Reading debate was adjourned), would lower the threshold to 75%, by direct or indirect beneficial interest or voting rights, and extend relief to bodies corporate without share capital, such as limited liability partnerships and companies limited by guarantee. Once enacted, it would apply to instruments executed on or after 25 February 2026. Until then the 90% test applies, so check the bill’s status with the Stamp Office before relying on it.

After stamping: company records and filings

• Before anyone signs, check the articles and any shareholders’ agreement for pre-emption rights or board approval of transfers.
• Prepare the valuation pack (accounts, annual return and any property schedule) before the sale, because the 2-day stamping clock starts with it.
• Once the documents are stamped, have the directors approve the transfer, enter it in the register of members, cancel the old share certificate and issue a new one.
• Update the significant controllers register within 7 days of confirming a change in who controls the company.
• File nothing with the Companies Registry at the time: the next annual return (Form NAR1) reports the new shareholdings.
• If directors change as part of the deal, file Form ND2A within 15 days, and keep the stamped notes and instrument with the company’s records.