Contracts and company law essentials in Hong Kong

Why Hong Kong law is chosen

Hong Kong retains a common law system under the Basic Law, with bilingual courts, an independent judiciary and the HKIAC as a leading arbitration seat. The practical reason groups choose Hong Kong law and forum for China-related deals is enforcement: arrangements between Hong Kong and the mainland allow reciprocal recognition of judgments and arbitral awards, which a Singapore or English judgment does not enjoy to the same degree.

Parties may choose any governing law. English and Chinese are both official; contracts are usually in English, and a Chinese version, where signed, should carry a prevailing-language clause. Hong Kong law does not require a company chop, although mainland counterparties will expect one.

Electronic signatures and the Schedule 1 exclusions

The Electronic Transactions Ordinance (Cap. 553) treats an electronic signature between private parties as valid where the method is reliable and appropriate and the recipient consents; consent is usually written into the contract. Where a government entity is a party, only a digital signature supported by a recognised certificate will do.

Schedule 1 lists documents outside the Ordinance: wills; trusts (other than resulting, implied or constructive); powers of attorney; instruments required to be stamped under the Stamp Duty Ordinance; government leases; land documents under the Land Registration Ordinance and the Conveyancing and Property Ordinance; floating charge documents; oaths, affidavits and statutory declarations; court documents; and negotiable instruments. The stamp duty item is the one that affects corporate work: a share transfer instrument and bought and sold notes must be stamped, so they are signed on paper even though the shareholders' agreement and resolutions around them are signed electronically. The Estate Agents Authority reminded licensees in June 2026 that provisional sale and tenancy agreements remain excluded, which shows the list is applied strictly.

Companies Ordinance: authority and duties

The Companies Ordinance (Cap. 622) governs private companies. A company signs a contract by any authorised director and executes a deed by two directors, a director and the company secretary, or a sole director with a witness, without a seal. Every company must have a company secretary resident in Hong Kong (an individual or a licensed trust or company service provider) and at least one natural-person director; there is no residency requirement for directors.

The duty of reasonable care, skill and diligence is codified in section 465; fiduciary duties remain common law and are summarised in the Companies Registry's guide. Directors must disclose interests in transactions. The approval most often missed is section 140: directors may not allot shares without prior shareholder approval, so an option plan or a new investor round needs a shareholder resolution before any allotment, including shares issued on exercise.

Private companies may pass written resolutions and dispense with annual general meetings, and must file an annual return within 42 days of the incorporation anniversary. The significant controllers register must be kept at the registered office with a designated representative.

Share transfers step by step

A private company's articles must restrict the transfer of shares, so the sequence is: offer to existing shareholders or obtain waivers under the articles and shareholders' agreement; board resolution approving the transfer; execution of the instrument of transfer and bought and sold notes on paper; stamping by the Inland Revenue Department within the statutory window, with duty on each side at the current rate on the higher of consideration and net asset value plus a fixed fee on the instrument; entry in the register of members; and issue of a new share certificate. Ordinary resolutions pass by simple majority and special resolutions by 75 per cent, and a member may petition for relief from unfairly prejudicial conduct under section 724.

LegalMatrix subscription and share transfer documents for Hong Kong include the stamping checklist and the paper-signature instruments; GoGoTrust arranges stamping and the register update for companies it administers.

Employment Ordinance essentials

The Employment Ordinance (Cap. 57) applies to all employees, with continuous-contract protections after four weeks of 18 or more hours. Probation is contractual, but the Ordinance fixes the notice consequences: during the first month of probation either side may terminate without notice; after the first month the agreed notice applies with a seven-day minimum; and for a continuous contract without probation, or after probation, the agreed notice applies with a seven-day minimum and a one-month default if nothing is agreed. Payment in lieu is permitted.

Restrictive covenants follow the common law: enforceable only if reasonable between the parties and in the public interest, and the court will not rewrite an overbroad clause. Garden leave and non-solicitation terms are more dependable. Share option gains are chargeable to salaries tax, and employers report them through the annual return; the allotment needs section 140 approval.

Trade marks under Cap. 559

Hong Kong is first to file. Applications go to the Trade Marks Registry of the Intellectual Property Department; substantive examination usually begins within about four months, accepted marks are published for a three-month opposition period (an intended opponent may obtain one two-month extension), and registration follows if unopposed, so approximately six to nine months in total. Registration lasts ten years from filing and is renewable. A Hong Kong mark does not cover mainland China, Macao or Taiwan, and the Madrid Protocol had not yet been applied to Hong Kong at the review date, so each territory needs its own filing. Check the authority.

Checklist before you sign

• Identify any Schedule 1 document and sign it on paper; sign the rest electronically with a consent clause.
• Confirm section 140 shareholder approval before any allotment.
• Diarise stamping deadlines for share transfers.
• Set probation and notice terms to the Employment Ordinance floors.
• File trade marks in Hong Kong and the mainland separately, early.