The transfer of shares method, while typically seen in Hong Kong start-ups and high-growth firms, can be fairly complex to manage. Thus, it’s important to make sure you have all your bases covered.

The procedure can involve a lot more than just signing papers; if things don’t work out as planned, you could even lose money on this transaction.

Understanding the transfer process can be daunting, but we’ll walk you through it step-by-step in this article and help you achieve a successful transfer.

What you need to know about the transfer of shares in Hong Kong

To ensure a successful share transfer, it’s vital to make sure you have a basic understanding of the process.

What is the transfer of shares?

The transfer of shares in a company refers to the intentional sale, purchase, or gift of shares between the transferor (the original shareholder who wants to transfer shares) and the transferee (the recipient or buyer who receives the shares).

This is different from a share issue where an incoming investor buys new shares issued by your company, enabling you to acquire new funds to grow the business.

When does a share transfer occur?

A share transfer occurs when an existing shareholder wishes to retire or sell their shares for specific reasons. They’ll look for an investor who wants to be a part of the company’s growth and is acceptable to the other shareholders.

Why you may need to transfer shares?

The first thing you should do is figure out why you want to transfer the shares. There could be many reasons for this, such as wanting to change the ownership of the company or divesting some of your shares.

Transfer of shares offers you an opportunity to become a shareholder in a Hong Kong company and opens the door to wholesome benefits such as getting dividends.

Whatever the reason may be, it is important to be clear about why you are making the transfer. The most common reasons are:

  • Sales of shares in return for cash or other types of assets
  • Bringing new key business partner on board
  • Changing the ownership of the company
  • Gifting to friends, family members, or spouse
  • Raising capital for the company or adjust share capital
  • Transferring shares in connection with the winding up of your company or by operation of law
  • Satisfying a charge or lien
  • Retiring purpose
How does dividend payment work in Hong Kong?

How does dividend payment work in Hong Kong?

A dividend is a payment made to shareholders from your company’s profits. You can pay dividends in cash, shares, or other assets (i.e., property, stock, bond, etc.).

When a company makes an amount of profit, the board of directors can decide to share some of that profit with shareholders in the form of dividends.

This is the efficient method to return capital to shareholders without having to sell company assets, thus attracting and retaining investors.

More on the process of dividend payment in Hong Kong and its advantages.

What is the instrument of transfer?

The transfer of legal title to shares from a transferor to a transferee in a Hong Kong company is affected by an “instrument of transfer”. Beneficial title to shares is transferred by way of contract notes (a bought note and a sold note).

An instrument using which any Hong Kong stock is transferred, and includes a letter of renunciation (section 2, Stamp Duty Ordinance (Cap 117)).

In Hong Kong, the most common form of an instrument of transfer is a deed of transfer, which is a written document that outlines the terms and conditions and serves as evidence of the transfer.

It is important to ensure that the instrument of transfer is properly prepared and executed by the laws of Hong Kong, as any defects in the transfer process can lead to disputes or legal challenges.

What are the required documents to transfer shares in Hong Kong?

When transferring shares in a Hong Kong company, there are several documents that you will need to prepare, including:

  • The transfer application form
  • The written consent from the other shareholders
  • The share certificate(s)
  • The transfer fees
  • The stamp duty

Make sure that you have all of these documents ready before you submit your transfer application, as it will make the process much smoother and less complicated.

The procedure of share transfer in Hong Kong

The procedure will be divided into 3 stages: pre-transfer, application, and post-transfer.

Step 1: Pre-transfer

To complete the first step, you’ll need to consider the following factors:

Sign sale agreements and send advanced notice

Before the event can take place, the transferor and transferee must enter into an agreement, which must indicate the following information:

  • Name of the company
  • Number of shares being transferred
  • Price per share
  • Date of transfer
  • Signatures of both the transferor and transferee

To transfer shares in a Hong Kong company, the transferor and transferee must be registered as shareholders of the company. The transferor must also have valid transfer documents, such as a share transfer form or share power of attorney.

When shareholders decide to transfer shares, they must send a written notice to the company and each of the shareholders in advance, noticing about:

  • Name and address of the transferor
  • Name and address of the transferee
  • Number and class of shares transferred
  • Consideration for the transfer (i.e. how much money was spent on the shares)
  • Whether or not stamp duty must be paid

Inform shareholders about preemptive rights

According to the Company Ordinance, shares must first be offered to existing shareholders before being allowed to be transferred to outside parties.

The transferor needs to inform company shareholders that they’re offering shares and see if other shareholders want to exercise the pre-emptive rights.

Receive consent from shareholders

There must be written consent from the other shareholders to approve the transfer process. This can be done by obtaining a resolution from the shareholders’ meeting or by obtaining written consent from each shareholder.

After collecting consent papers, you can move on to the next step.

Step 2: Application

You’re required to apply to Hong Kong Company Registry. The Registry will then process your application and will issue a share transfer form once approved.

The form will be signed by both parties and given to the transferee afterward, verifying their ownership of the shares. Any fee or stamp duty incurred in the transaction must be paid.

Step 3: Post-transfer

After the transfer is complete, the board of directors must inform the Registry to prove the new company shareholder.

If you are thinking of transferring shares, be sure to follow the steps outlined in this guide. It is important to ensure that everything is done properly and following the law, as any mistakes could lead to complications down the road.

What are the tax implications of share transfer in Hong Kong?

There can be various tax implications when transferring shares. It’s important to seek professional advice from an accountant or lawyer to ensure that you’re aware of all the implications and taking the necessary steps to minimize any potential tax liability.

Some of the most common tax implications associated with share transfers include:

  • Capital gains tax – payable on the profits made from the sale of shares.
  • Stamp duty – levied on certain documents, such as transfer certificates.
  • Withholding tax – deducted from the payments made to the transferor.

Make sure you are aware of all the tax implications before transferring shares, as it could significantly impact your financial situation.



Gain a better understanding of Hong Kong Withholding Tax in our recommended article.


When it comes to transferring shares in a Hong Kong company, it’s important to be aware of the various legal procedures and regulations involved.

Through this article, we have provided an overview of the transfer process, as well as some tips on how to make the transfer a seamless journey.

If you have any questions about stamp duty or transferring shares in a Hong Kong company, please don’t hesitate to contact our expert team via We’d be happy to provide helpful guidance and practical advice for your specific need.

Frequently Asked Questions

What are stamp duty rates on the sale or purchase of any Hong Kong shares?

Each “Share Transfer Form” will require a stamp duty fee of HK$5, while for the “Sale Agreement’, you need to pay a consideration or sale of shares at a rate of 0.2% on its net asset value, whichever is higher.

There is no stamp duty when transferring shares in a public company. However, the transferor and transferee must still both be present when the transfer is executed. The transferor must also obtain a transfer stamp and affix it to the transfer instrument.

What is the due date for paying Hong Kong stamp duty?

The transferor must pay the stamp duty within 30 days of the transfer. If payment is not made within the required timeframe, a late payment fee will be charged. The amount of the late payment fee is 1% of the total stamp duty payable per month.

For example, if the transferor owes HK$1,000 in stamp duty, and fails to pay within 30 days, a late payment fee of HK$10 will be charged.

There is no late payment fee if the transferor pays the stamp duty within 14 days of the transfer. However, a late fine of 0.5% will apply if the transferor makes their payment midway between the 15th day and 30th day.

Make sure you pay the stamp duty within 30 days of the transfer, to avoid any late payment fees.

What is the difference between share transfer and share issue?

In the case of share transferring, the number and percentage of shares owned by the various shareholders remain unchanged, but for share issuing, things can be a little different.

Because new shares have been issued, your percentage ownership of the company will decrease. So, it’s crucial that you’re aware of any change in ownership to keep track of your investment.

Disclaimer: While BBCIncorp strives to make the information on this website as timely and accurate as possible, the information itself is for reference purposes only. You should not substitute the information provided in this article for competent legal advice. Feel free to contact BBCIncorp’s customer services for advice on your specific cases.

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