Every Hong Kong company needs an accountant at some point, and most need one from the first month. The law requires proper records, a yearly audit, and a profits tax return backed by audited accounts. That's why Hong Kong accounting firms play such a central role for founders, especially those running a company from overseas.
This guide explains what these firms do and which rules make their work necessary. It also covers the main types of firms, typical fees, and how to pick the right one.
What an Accounting Firm Does for a Hong Kong Company
Most firms offer a menu of services. You rarely need all of them, but it helps to know what each one covers.
Bookkeeping and Management Accounts
Bookkeeping means recording every sale, purchase, bank payment, and expense. A good accountant also reconciles your bank statements and prepares monthly or quarterly management accounts. These reports show profit, cash, and what you owe, so you can make decisions before year-end. Our accounting and bookkeeping team can take this work off your hands.
Financial Statements and Audit Support
At year-end, the accountant turns your books into financial statements. An independent auditor then checks them. Your accountant usually prepares the schedules and documents the auditor asks for, which keeps the audit short.
Tax Filing and Tax Advice
The firm prepares your profits tax computation and files the return with the Inland Revenue Department (IRD). Many also advise on offshore profits claims, group structures, and deductions. Our guide to Hong Kong's territorial tax system explains why good records matter so much when you claim profits are earned outside Hong Kong.
Payroll and Employer Filings
If you hire staff, an accountant can run payroll, handle Mandatory Provident Fund (MPF) contributions, and prepare the yearly employer's return. Our guide to [how Hong Kong salaries tax works](FUTURE-LINK: blog #1, Hong Kong salaries tax rates guide) explains what employees pay and what employers report.
Company Secretary and Related Services
Every Hong Kong company must appoint a company secretary. This role is separate from accounting, and firms that offer it as a service need a trust or company service provider (TCSP) licence. Many firms bundle both, so you deal with one provider instead of two.
Why Hong Kong Company Accounting Isn't Optional
Hong Kong company accounting is built into the law. Three duties apply to almost every company incorporated here.
Keeping Proper Records
Companies must keep accounting records that explain their transactions and financial position. These records should be kept for at least seven years. Invoices, receipts, contracts, and bank statements all count.
The Annual Statutory Audit
Every company incorporated in Hong Kong must have its financial statements audited each year, unless it is formally dormant. There is no exemption based on size or turnover. Even a company with no sales still needs an audit if it had any accounting transactions.
Only certain people can sign the audit report. Under the Companies Ordinance, the auditor must be registered with the Accounting and Financial Reporting Council (AFRC). That means a CPA (practising), a CPA firm, or a corporate practice. An in-house accountant can't sign off your audit.
Simplified Reporting Is Not an Audit Exemption
Some small private companies qualify for simplified financial reporting. This reduces what the financial statements must include, but the audit still has to happen. Your auditor can confirm whether your company qualifies.
Dormant Companies
A company with no accounting transactions can become dormant by passing a special resolution and filing a notice with the Companies Registry. Dormant companies are exempt from the audit requirement. The status ends once the company makes an accounting transaction again.
The Profits Tax Return
Companies file a profits tax return with the IRD, along with the audited financial statements and a tax computation. A new company usually receives its first return about 18 months after incorporation. After that, returns follow the company's financial year-end. Our tax advisory team can prepare the computation and handle the filing.
These duties sit alongside the other yearly filings covered in our Hong Kong company annual compliance guide.
Types of Hong Kong Accounting Firms
Not every firm does the same work, and not every firm can do your audit. Here's how the market breaks down.
Type of firm | What they offer | Best suited to |
Big Four networks | Audit, tax, and advisory for large and listed groups | Listed companies, multinationals, and companies preparing for an IPO |
Mid-tier international networks | Audit, tax, and advisory with cross-border support | Growing groups with operations in several countries |
Local CPA practices | Statutory audit, tax filing, and often bookkeeping | Small and mid-sized companies that want a direct relationship |
Corporate service providers | Bookkeeping, company secretary, and tax filing, with audits done by partner CPA firms | Founders who want one point of contact for all compliance |
CPA Firms vs Accounting Service Providers
This is the distinction that matters most. CPA firms in Hong Kong that are registered with the AFRC can sign statutory audit reports. Bookkeeping and accounting service providers can't, even if their staff are qualified accountants.
So an accounting company in Hong Kong may handle your books and tax filing, then work with a separate CPA firm for the audit. That setup is normal and can work well. Independence rules also limit what an auditor can do for its own audit clients, so some separation is often a good sign.
How Much Accounting Services Cost
Fees depend on how much work your company creates. The ranges below come from 2026 price lists published by Hong Kong providers. Treat them as a rough guide, not a quote.
Service | Typical range (HK$) |
Monthly bookkeeping for low to moderate volume | About 1,000 to 5,000 per month |
Statutory audit for a simple, low-volume company | About 5,000 to 30,000 per year |
Statutory audit for a company with inventory, several revenue streams, or related-party deals | About 30,000 to 60,000 per year |
Audit for groups or high-volume companies | 80,000 or more per year |
Profits tax return preparation is often bundled with the audit, but some firms charge it separately.
The main things that push fees up are:
- A high number of transactions each month
- Several bank accounts or currencies
- Inventory, subsidiaries, or related-party transactions
- An offshore profits claim that needs detailed support
- Messy records that must be rebuilt before the audit
- Leaving the work until the busy filing season
The cheapest quote isn't always the lowest total cost. Poor bookkeeping often leads to higher audit fees, clean-up charges, and late filings.
How to Choose an Accounting Firm in HK
A few checks will save you trouble later. Here's what to look at before you sign.
- Check the register. Look up the audit firm or practising CPA on the AFRC's public register. Confirm the exact name that will appear on your audit report.
- Get the scope in writing. The engagement letter should list what's included, such as bookkeeping, audit, tax return, and employer's return.
- Ask how fees are set. Fixed yearly fees are easier to budget. Ask what triggers extra charges.
- Check their experience with companies like yours. A firm that works with non-resident founders will understand remote document collection and offshore claims.
- Confirm software and communication. Ask which accounting software they use, who your contact is, and how fast they reply.
- Plan the audit timeline. Agree on when records are due so the audit finishes well before the tax return deadline.
Red Flags to Watch For
Be careful with any provider that won't name the CPA firm signing your audit. Walk away from anyone who offers to "skip" the audit for an active company. A price far below the market with no clear scope is another warning sign. An accounting firm in HK that is vague about who does what can leave you with a report the IRD won't accept.
Getting the Most From Your Accountant
Your accountant can only work with what you give them. Keep invoices and receipts in one place from day one. Use a separate business bank account. Send documents monthly rather than all at once at year-end.
Documents Your Accountant Will Ask For
- Bank statements for every business account
- Sales and purchase invoices
- Receipts for business expenses
- Payroll and MPF records, if you have staff
- Contracts, loan agreements, and shareholder loans
- Records of equipment or other assets you bought
Working With an Accountant From Overseas
Many founders run their company from outside Hong Kong. Working with an accounting company in Hong Kong from overseas is common and usually fully remote. Expect to complete identity checks, share documents through a secure portal, and sign the financial statements electronically where the firm allows it. Ask early about time zones and response times, since audit deadlines don't move.
Next Steps for Your Company
If you're setting up a company now, it helps to choose your accountant, company secretary, and registration provider together. Our guide on choosing a company registration service in Hong Kong covers the registration side.
If you'd like one team to guide you from incorporation to your first audit, LAINEXUS can help you plan each step.
Frequently Asked Questions
Q: Does a new Hong Kong company need an audit in its first year?
Yes, unless it is formally dormant. The first audited accounts cover the period up to the first financial year-end. The first profits tax return usually arrives about 18 months after incorporation, and the audited accounts must be ready to file with it.
Q: Can a foreign accountant audit my Hong Kong company?
No. Only practising CPAs, CPA firms in Hong Kong, and corporate practices registered with the AFRC can sign a statutory audit report. A foreign accountant can still help with bookkeeping, group reporting, or tax matters in your home country.
Q: Can I do my own bookkeeping?
Yes. Directors can keep the books themselves using accounting software. The records still need to be complete, accurate, and backed by documents. Many founders start this way, then outsource once transaction volume grows or they hire their first staff.
Q: What happens if a company doesn't file audited accounts?
The IRD may issue an estimated assessment, which can be higher than the tax actually owed. Late or missing returns can also lead to penalties or prosecution. Directors may be held personally responsible for failing to meet the accounting requirements.
Q: How early should I appoint an accountant?
Ideally, as soon as the company is incorporated. Setting up bookkeeping from the start costs less than rebuilding a full year of records later. It also gives you time to plan any offshore claim and prepare calmly for your first audit.