New Corporate Reforms in Hong Kong: Enhancing Capital Management and Operational Efficiency

Government Passes Companies (Amendment) Bill 2024 to Enhance Hong Kong’s Corporate Landscape

The Government has announced the Legislative Council’s approval of the Companies (Amendment) Bill 2024, a landmark initiative aimed at modernizing corporate practices in Hong Kong. The amendments will enable listed companies incorporated in Hong Kong to hold repurchased shares in treasury and dispose of them under specified restrictions. Additionally, the bill promotes paperless corporate communication for both listed and unlisted companies in Hong Kong.

Commenting on the passage of the bill, the Secretary for Financial Services and the Treasury, Mr. Christopher Hui, stated, “These measures will strengthen Hong Kong’s standing as a global business and financial hub. Introducing a treasury share regime aligned with international standards provides listed companies, including Hong Kong-incorporated ones, with greater flexibility to manage their capital through holding, selling, or transferring repurchased shares. At the same time, the proposed implied consent mechanism for paperless corporate communication will enhance cost-effectiveness and operational efficiency across companies.”

The Amendment Ordinance is set to be published in the Gazette on January 17, 2025. To allow sufficient time for companies to adapt, the new measures will take effect three months after the publication date.