Why list your company in Hong Kong.

The Stock Exchange of Hong Kong (HKEX) is one of the world’s largest market in terms of market capitalisation and also one of the world’s top three initial public offerings (IPO) markets. Hong Kong has long served as an important centre of business and financial activities in that region and around the globe. With this, HKEX plays an ideal platform for enterprises to go public for raising capital.

Hong Kong has a unique blend of advantages to partner with investors and project owners worldwide. It is attractive due to several strong factors. Its strategic position as it is a gateway to the Chinese market, its status as a free port, its simple tax system that provides many incentives, good infrastructure and judicial security. Hong Kong has one of the world’s best regulatory systems for paying taxes together with a robust regulatory regime to protect the investors’ interest.

  • Strategic location – a gateway to the Chinese market

  • Simplified tax system – low tax rate, no tax on dividend income and capital gain

  • Established legal system – a consistent regulatory regime that serves as protection to investors and issuers

  • No foreign exchange control – capital is freely circulated in different locations

Pre-IPO

For most companies and shareholders, going public with an IPO marks a monumental milestone as a “once-in-a-lifetime” event that represents the culmination of many years of hard work and investment. An IPO, however, frequently also brings with it a sense of upheaval as significant preparations and changes are required to be made to the way a company operates and conducts itself as a publicly listed company. Companies that have completed a successful IPO know that the process is complex and challenging, involving a series of preparation, planning, and pervasive changes undertaken to make the transition as smooth as possible while continuing to operate the company’s business.

Preparing for an IPO is an intense and arduous process that involves identifying and dealing with different issues in every aspect of the business. Critical issues which are not handled appropriately could even jeopardise the chances of the company getting successfully listed.

Professional service providers can help companies to identify such potential issues and recognise red flags while it is still not too late to resolve them in a timely and appropriate manner so that they would not affect the overall execution timetable and chances of getting listed.

Benefits of listing

Increase market reputation

Listing in a well-developed stock exchange (such as HK Stock Exchange) will help a company to improve its market reputation and gain market acceptance. It will also create business opportunities that may increase a company’s revenue, profitability and growth potential.

Fundraising platform

Listing serves as a fundraising platform for companies. A company can utilise the listing proceeds for business development and expansion that will further enhance its profit and growth potential.

Broaden investors’ base

Once listed, the shares of a company will immediately become a local and international investment product. This will help to expand a company’s investors’ base and attract more quality and reputable investors.

Corporate and financing activities

Once a company is listed, the company has more flexibility in conducting its business activities (such as mergers and acquisitions) and has more financing channels to raise funds (such as loans, placing and rights issue, etc.) in the future.

Improved stock liquidity

As a company’s shares become liquid after listing, investors can easily buy and sell the company’s stock. This is favourable to existing shareholders who can sell their shares at an opportune time to realise their investment returns.

Value creation in listed premium

Controlling shareholders of listed entities will be able to realise their returns in the listing status by disposing the listed entities to potential buyers who are interested in the listing status only and/or business in the listed entity.

Key considerations when listing in Hong Kong

  • Mandatory post-listing sponsorship period
  • Moratorium
  • Non-competition undertaking
  • Principal business activity
  • Profit forecast
  • Cashflow forecast
  • Connected transactions and competing businesses
  • Taxation
  • Land titles, permits & licenses
  • Personal guarantees
  • Hong Kong presence
  • Share option scheme

Our scope of services

  • In conjunction with the legal advisers and accountants of the Company, to carry out preliminary IPO readiness assessment on the Company and assist in identifying any issues and areas of concern in connection with the legal, and accounting for the IPO and propose solutions and areas for improvement.
  • To advise the Company on the proposed listing structure and corporate restructuring, and to assist the Company in reviewing the reorganisation memo prepared by the legal advisers.
  • To understand the business of the Company and assist the Company in identifying its key investment highlights and equity story
  • To recommend and to assist in the selection and appointment of the other professional parties involved and, in conjunction with the Company, to co-ordinate their work if required.
  • To assist the Company in the co-ordination in the necessary due diligence as may be required by the Company or otherwise as may be required by the counterparties (as the case may be).
  • To review with the Company any reports (such as valuation, financial and other technical reports) prepared in connection therewith.
  • To review with the Company terms of documentation prepared for execution by the Company in connection therewith.

Post-IPO

As required by Rules Governing the Listing of Securities (the Listing Rules) on The Stock Exchange of Hong Kong Limited (the Stock Exchange)/the Listing Rules on GEM of the Stock Exchange, any company listed in Hong Kong have to appoint a qualified chartered company secretary/solicitor/certified public accountant to be the named company secretary of a listed company to advise the board of directors on the compliance and corporate governance matters concerning the Listing Rules and other relevant law and regulations including Securities and Futures Ordinance, Companies Ordinance and the Takeovers Code. To have an efficient operation of the board of directors of listed companies, listed companies outsource all the corporate secretarial work to our listed company team. We are qualified professional team members who possess extensive experience in tackling routine situation encountered by a listed company. The services rendered by our team include, but not limited to, the following:

  • Provision of a qualified professional person to act as the named company secretary and the authorised representative of the listed company.
  • Provision of the principal place of business in Hong Kong.
  • Provision of routine services in preparation of a report, circular and announcement concerning annual results, interim results, quarterly results, annual/extraordinary general meetings; filing of various statutory form/return to government authorities and the Stock Exchange; drafting of board minutes for physical board meetings; maintenance of statutory registers and records.
  • Provision of professional advice on corporate governance matters and corporate project of a listed company.
  • Provision of ad hoc services concerning change of directors, board committee members, auditor, company name, registered office/principal place of business and memorandum and articles of association/bye-laws; transfer of shares; payment of a dividend; repurchase of shares; reduction of capital; dissolution of the company, registration of non-Hong Kong company.
  • Provision of special services for corporate projects in connection with share option scheme, capital reorganisation, fundraising, general offer, corporate reorganisation and corporate secretarial compliance for company proposed to be listed, notifiable transaction, connected transaction.
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Alan, Commercial director

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