Hong Kong Company Bookkeeping: Records You Must Keep (7-Year Rule)
Reviewed by Captime's licensed team (TCSP Licence TC010212) · Updated · Editorial policy
Discover which Hong Kong company bookkeeping records must be kept for 7 years, what documents are covered, and how to stay compliant with record-keeping rules.
Key Takeaways
- Hong Kong’s tax and company laws impose separate but overlapping bookkeeping duties.
- Keep books, source documents, asset and liability records, daily money records and, where applicable, payroll evidence.
- Goods businesses need detailed purchase, sales and stock records; service businesses need verifiable service and fee records.
- Use the later applicable seven-year deadline, while considering tax losses and post-dissolution duties.
- Electronic records must be accessible, reproducible, legible and protected against falsification.
- Overseas storage is allowed subject to Hong Kong access, reporting and inspection requirements.
Quick Answer
Hong Kong companies must keep complete accounting records for at least seven years.
Electronic records are allowed if they remain accessible, reproducible, and protected against falsification.
Which Hong Kong Laws Govern Company Bookkeeping?
Two principal laws govern Hong Kong company bookkeeping. One supports tax assessment, while the other ensures that a company can explain its transactions and financial position.
Section 51C of the Inland Revenue Ordinance requires a person carrying on a trade, profession or business in Hong Kong to keep sufficient income and expenditure records in English or Chinese. The records must allow assessable profits to be readily ascertained.
Failure to comply with section 51C without reasonable excuse can result in a fine of up to HK$100,000.
Section 373 of the Companies Ordinance requires records that explain transactions, disclose the company’s financial position and support compliant financial statements.
A director who fails to take all reasonable steps to secure compliance can face a HK$300,000 fine. If the failure is wilful, the director may also face imprisonment for up to 12 months.
What Bookkeeping Records Must a Hong Kong Company Keep?
A Hong Kong company must keep enough information to trace its income, expenditure, assets, liabilities and daily transactions. These records fall into five practical categories.
1. Books of Account
Maintain an organised record of receipts, payments, income and expenditure. The books may be maintained in accounting software, a general ledger or another reliable bookkeeping system.
2. Source Documents
Retain invoices, receipts, vouchers, contracts, bank and payment-platform statements, and deposit records. Employers should also retain payroll and Employer’s Return records. Each material ledger entry must remain traceable to supporting evidence.
3. Assets and Liabilities
Record fixed assets, loans, accounts receivable, accounts payable and director balances. Year-end debtor and creditor lists should agree with the accounting ledger.
4. Daily Money Records
Record all money received and spent on a day-by-day basis, with enough detail to identify each transaction. Monthly totals alone do not provide a sufficient audit trail.
5. Business-Specific Records
A goods business should retain purchase and sales records identifying suppliers and customers, together with item descriptions, quantities and values, year-end stock statements and stocktake working papers. A service business should keep sufficient details about each service and related fee to verify the accounting entries.
How Does the Hong Kong Seven-Year Rule Work?
Two statutory retention clocks may apply, and the disposal date should follow whichever applicable deadline expires later.
The Inland Revenue Ordinance generally counts seven years after completion of the relevant transactions, acts or operations. Stopping trade does not end an unexpired period.
Under section 377 of the Companies Ordinance, accounting records must be preserved for seven years after the end of the financial year to which the last entry relates. A document created early in a financial year may therefore need to be retained for close to eight years.
For carried-forward tax losses, the IRD’s guide suggests retaining support until seven years after the end of the year in which the losses are fully set off. This is prudent guidance, not a separate section 51C period.
After dissolution, section 758 separately requires each former director to ensure that the company’s books and papers are kept for at least six years. As other retention duties may overlap, obtain professional advice before destroying records.
Can Hong Kong Bookkeeping Records Be Kept Electronically?
Yes. Electronic records are allowed when they remain accessible and accurately represent the original information. Relevant origin, destination, date and time data must also be retained where applicable.
The IRD’s guidance confirms that properly scanned images may replace original paper source documents. Integrity and legibility must be preserved, with scanning, storage and disposal supervised by a responsible person.
Section 376 requires electronic accounting records to be reproducible in hard copy. Companies must guard against falsification and facilitate its discovery.
Cloud software can organise the ledger, but it cannot replace invoices, receipts, bank statements and other source evidence.
Can Accounting Records Be Stored Outside Hong Kong?
Yes. Records may be kept outside Hong Kong, but accounts and returns covering that business must be sent to and kept in Hong Kong. Both sets must remain open to the directors’ inspection at all times without charge.
Under section 374 of the Companies Ordinance, those accounts and returns must disclose the business’s financial position with reasonable accuracy at intervals of no more than six months. They must also be sufficient to support compliant financial statements.
Why Do Good Records Matter for Audits and Offshore Claims?
Accurate bookkeeping provides the evidence behind the company’s financial statements, statutory audit and profits tax return. Missing documents can prevent an auditor from verifying balances and may lead to an estimated tax assessment.
An offshore profits claim requires more evidence, not less. Contracts, invoices, correspondence, payment trails, delivery records and information showing where profit-producing activities occurred may be needed to support the claimed source of profits.
Four Bookkeeping Mistakes to Avoid
Missing evidence and inconsistent recording cause many bookkeeping problems. Avoid these four common mistakes.
1. Discarding Bank Statements
Archive every statement because banks may limit historical access or charge for replacements.
2. Mixing Personal and Company Spending
Use a business account and document any director-paid company expense promptly.
3. Leaving Cash Sales Unrecorded
Document cash sales with register tapes, numbered receipts or a daily takings log and full purchase records.
4. Keeping Totals Without Details
Retain dates, quantities, values, counterparties and supporting documents so reported figures can be verified.
Hong Kong Bookkeeping Compliance Checklist
A consistent monthly process is the simplest way to prevent missing records. Use the following checklist throughout the financial year.
- Record sales, purchases, receipts and payments promptly.
- Reconcile bank and payment-platform balances every month.
- Attach an invoice, receipt or equivalent evidence to each material entry.
- Maintain current debtor, creditor, asset, loan and inventory records.
- Keep business records in English or Chinese.
- Store electronic records securely, maintain reliable backups and preserve hard-copy reproducibility.
- Apply a disposal date based on the later applicable retention period.
- Review the ledger before the financial year-end, audit, and profits tax filing.
How Captime Helps
Captime provides recurring Hong Kong bookkeeping services for overseas-owned companies, e-commerce sellers and other businesses. We organise transaction records, reconcile balances and maintain supporting documents throughout the year.
Reliable monthly records allow annual accounts, audit work and profits tax filing to begin with a clean foundation. Our team also identifies missing evidence or unexplained balances before they become audit or tax problems.
Captime Corporate Management Limited holds Hong Kong TCSP Licence No. TC010212. Verify it by searching the licence number in the Companies Registry’s official TCSP register.
Official References
- Inland Revenue Department — Record Keeping
- Inland Revenue Department — A Guide to Keeping Business Records
- Inland Revenue Department — Business Records Kept in Electronic Form
- Inland Revenue Department — Employer Record-Keeping Obligations
- Inland Revenue Ordinance, section 51C — Business Records
- Companies Ordinance, section 373 — Accounting Records
- Companies Ordinance, sections 374–377 — Location, Form and Retention
- Companies Ordinance, section 758 — Records After Dissolution
Frequently Asked Questions
Yes. Retain payroll ledgers, remuneration and payment records, Employer’s Returns and supporting documents for at least seven years.
Export the ledger, trial balance, transaction history, attachments, audit trail and reconciliation reports. Keep readable exports and backups accessible throughout the retention period.
Keep the approval or loan agreement, bank trail, repayment schedule, interest calculations and ledger entries. Reconcile the balance with the year-end accounts.
Retain statements, settlement reports, transaction details, fees and exchange-rate evidence. Reconcile each platform to the ledger and receiving bank account.
Request a duplicate and retain alternative evidence. Add a contemporaneous note explaining the business purpose and why the original is unavailable.
Keep the invoice or receipt, payment evidence and business-purpose note. Record it through the director’s current account or a documented reimbursement.
Video transcript
Read the full transcript
Slappy bookkeeping in Hong Kong is not a slap on the wrist. A director who willfully fails to keep proper accounting records can face a fine of up to 300,000 Hong Kong dollars and up to 12 months in prison. That is not a scare tactic. It is written directly into the company's ordinance. So what records must a Hong Kong company actually keep? The short answer? Enough records to show every dollar in and every dollar out. Your books of account, invoices, receipts, bank statements, and a record of your assets and liabilities. And you must keep them for at least seven years. Two different laws require this and they are not identical.
In the next eight minutes, I'll walk you through exactly what to keep, for how long, in what format, and one obligation that survives even after you close the company. That last one surprises almost everyone, so stay to the end. Hong Kong company bookkeeping is governed by two ordinances at the same time. First, the tax side. Section 51C of the Inland Revenue Ordinance, that's chapter 112, says every person carrying on a trade, profession, or business in Hong Kong, must keep sufficient records of income and expenditure, so assessable profits can be readily ascertained. Fail without reasonable excuse and the maximum fine is HK$100,000. Second, the company law side.
Section 373 of the company's ordinance, chapter 622, requires accounting records that show and explain the company's transactions and disclose its financial position with reasonable accuracy at any time. A director who fails to take all reasonable steps faces a fine of HK$300,000, and if the failure is willful, up to 12 months in prison on top. Same records, two sets of teeth. Keep the records once and you satisfy both. The records you must keep. Here is the actual list, straight from the Inland Revenue Department and the ordinance. Five categories. One, books of account. A record of receipts and payments, income and expenditure.
In practice, this is your cash book or your accounting software. Two, source documents, vouchers, bank statements, invoices issued and received, and receipts. The paperwork that proves the entries in Category 1 are real. Three, a record of your assets and liabilities, what the business owns and what it owes, including year-end lists of debtors and creditors. Four, a day-by-day record of all money received and spent, daily, not monthly. This is the requirement founders miss most often. Five, extras, depending on your business.
If you deal in goods, and that includes every Amazon and Shopify seller watching, you also need full particulars of goods purchased and sold, plus year-end stock statements and the stock -taking records behind them. Picture a Shopify seller in Berlin running a Hong Kong company and sourcing from Shenzhen. That's the city just across Hong Kong's northern border in mainland China. Every supplier invoice from Shenzhen, every stock count in the warehouse, kept for seven years. If you provide services instead, you need records detailed enough to trace every sum charged through your books. Now, the seven years and here the two laws differ slightly, so listen carefully.
The Inland Revenue Ordinance says records must be retained for at least seven years from the date of the transaction. The Company's Ordinance, Section 377, says accounting records must be preserved for seven years after the end of the financial year the last entry relates to. The safe approach, and the one we recommend, is to count seven years from the end of the financial year. In effect, a record from early in your financial year lives closer to eight years. Three details most guides skip. If you stop trading, the obligation does not stop with you. It runs until the full period expires.
If you have tax losses being carried forward and set off against later profits, keep those records until seven years after the year the losses are fully used up. And even if you deregister the company entirely, Section 758 of the Company's Ordinance requires every former director to keep the company's books and papers for at least six years after dissolution. Closing the company does not close the filing cabinet. What format? Records must be in English or Chinese. Digital is fine. Section 376 of the Company's Ordinance expressly allows electronic records, as long as they can be reproduced in hard copy and you guard against falsification.
Cloud accounting software qualifies, but, and this matters, software alone is not enough. You must still keep the source documents behind the entries, the actual invoices, the actual bank statements. A tidy dashboard with no paperwork behind it will not survive scrutiny. Where? Here is the part built for overseas founders. Records can be kept at the registered office or anywhere else the directors think fit, including outside Hong Kong. But if they live abroad, Section 374 requires accounts and returns to be sent back to and kept in Hong Kong, showing the company's financial position at intervals of no more than six months.
If you run your Hong Kong company from London or Berlin, your bookkeeping cannot simply live on a laptop overseas. A Hong Kong anchor is required. Now the honest part. Some founders assume that no profit or an offshore claim means no bookkeeping. Wrong on both counts. The record-keeping duty applies from day one, profitable or not. And if you plan to claim offshore profits, as we covered in our video on whether Hong Kong companies really pay 0% tax, you will need more evidence, not less, because the Inland Revenue Department tests offshore claims against your records. The same records also feed your statutory audit.
Every active Hong Kong company needs one, as we explained in our audit video. No records means your auditor cannot sign, the department can issue an estimated assessment, and you lose the paper trail that protects you. Hong Kong is low tax, not low standards. The deal is simple. Light taxes, kept books. Four mistakes we see constantly. One, discarding bank statements. They are a required record and banks may charge you to reissue old ones. File every statement every month. Two, mixing personal and business money. One company, one bank account. If you must pay a business cost personally, record it the same day. Three, unrecorded cash sales.
If you take cash, every sale needs a record, register tape, numbered receipts, or a daily takings log. There is a limited concession for cash retail businesses on recording customer identities, but daily takings and full purchase records are still mandatory. Four, keeping totals but not details. A monthly revenue number is not a record. The commissioner must be able to verify quantities, values, and the parties involved. The facts in 30 seconds. Every Hong Kong company must keep books of account, source documents, asset and liability records, and a daily money log, plus stock records if you sell goods. Retention, at least seven years. Count from the financial year end to be safe.
Penalties, up to 100,000 Hong Kong dollars under tax law, up to 300,000, and 12 months imprisonment for directors under company law. Electronic records are fine, English or Chinese only, and the duty outlives the company, six more years after dissolution. At CapTime Corporate Management Limited, bookkeeping is one of our core services. We keep your records compliant with both ordinances, month by month, so your audit and tax filing are built on a clean foundation instead of a year-end scramble. We are a licensed Hong Kong corporate services firm, and we work with overseas founders and e-commerce sellers every day. hk or use the link in the description. No credit card, no obligation.
Thank you for watching. If this saved you a future headache, subscribe. Our compliance videos are built to keep your Hong Kong company out of trouble. See you in the next video.
Related Captime services
Related Videos
Ready to start your Hong Kong company?
Book a free consultation with our team — we'll walk you through it.
