IPO in Hong Kong is a good choice for enterprise who intend to go listing. The transition from private to public ownership is a major step in the lifecycle of a company, involving a complex and often challenging process of dealing with regulators, investors and professional parties, while continuing to run the company’s business. As one of the world’s preeminent international financial centers, Hong Kong has become a destination of choice for many companies seeking to make this transition through an initial public offering (“IPO”) and listing on the Hong Kong Stock Exchange.
Benefits of Going Public
Hong Kong is an international financial and information centre, with standard and mature capital market. It has established laws and regulations, including Securities and Futures Ordinance, IPO Rules, Codes on Acquisitions and Mergers and others. It does not levy on dividends and profits of any placing, Institutional investors and the public proactively participate in the active market, and has no foreign exchange control, and capital is freely circulating.
Other advantages of listing in Hong Kong include:
1. Hong Kong acts as a gateway to Mainland China and Asia and offers opportunities for greater exposure to China and the rest of Asia.
2. Hong Kong has a well-established legal system based on English common law, as well as a sound regulatory framework that promotes a high level of disclosure from listed companies.
3. The Exchange promotes the use of international accounting standards, as well as other recognized accounting standards under certain circumstances, such as secondary listings.
4. Hong Kong provides for the free flow of capital, with tax advantages, currency convertibility and the free transferability of securities.
5. Hong Kong has continued to develop as an offshore RMB fund-raising center, which provides future fund-raising opportunities for companies seeking to expand in Mainland China.
Requirement for IPO
The enterprise that tends to go public must meet one of the following three criteria:
1. Profits Test
(1) 3 years' profits after tax ≥ HKD50 million;
(2) First 2 years' profits after tax, HKD30 million, and recent 1 year's profits after tax HKD20 million.
2. Market Capitalization/Revenue Test
(1) Market Capitalization ≥ HKD4 billion;
(2) Recent 1 year's revenue ≥ HKD500 million.
3. Market Capitalization/Revenue
(1) Market Capitalization ≥ HKD2 billion;
(2) Recent 1 year's revenue ≥ HKD500 million;
(3) Previous 3 year's accumulated cash inflow ≥ HKD100 million.
If you have further inquires, please do not hesitate to contact Tannet at anytime, anywhere by simply visiting Tannet’s website www.tannet-group.net, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143422, or emailing to email@example.com. You are also welcome to visit our office situated in 16/F, Taiyangdao Bldg 2020, Dongmen Rd South, Luohu, Shenzhen, China.
Previous：Company Acquisition in China
Next：Company Dissolution in China