A shelf company is a company incorporated in advance and left dormant, ready to be sold to a buyer who wants a company immediately. In Hong Kong, a new company can now often be incorporated within hours, so the main historical reason to buy a shelf company, speed, has largely gone. For most clients we recommend a new incorporation.
A shelf company may carry hidden history, and banks will still carry out full due diligence on the new owners. An older incorporation date is not a sound reason to buy one; banks and counterparties look at actual trading history.
At a glance
- New incorporation
- Clean history, your chosen name, no stamp duty on issue of shares
- Shelf company
- History to check, transfer stamp duty, usually a change of name
- Banking
- Full due diligence on owners either way
- Our usual advice
- A new company
Comparing the options
| Point | New incorporation | Shelf company |
|---|---|---|
| Speed | Often within hours once documents are ready | Immediate, but transfer filings still needed |
| History | Clean, known | Must be checked; possible liabilities or missed filings |
| Name | Your chosen name | Usually changed after purchase (further filing and government fee) |
| Cost | Government fees plus service fees | Purchase price plus transfer and change-of-name costs |
| Banking | Full due diligence on owners | Full due diligence on new owners; prior history may raise questions |
| Stamp duty | None on issue of shares | Payable on transfer of existing shares |
If you are considering a shelf company
- Confirm it has never traded and has no liabilities, with written warranties from the seller.
- Check filings on the Companies Registry: Annual Returns, changes and any charges.
- Check the Inland Revenue Department position: returns issued and filed.
- Obtain all statutory registers, minutes and the company chop.
- Arrange the share transfer, stamp duty and filings for new directors and secretary.
- Update the Significant Controllers Register and Business Registration.
Our view
For almost every client, a new company is cleaner, cheaper overall and just as fast. Where a client has a specific reason to acquire an existing company, for example an operating business with contracts, licences or a track record, that is an acquisition and needs proper due diligence, not a shelf-company purchase.
Self-check: where do you stand?
| Question | If the answer is no |
|---|---|
| Do you know exactly why you need a company immediately? | Plan incorporation alongside banking and contracts instead |
| If buying, have you checked all Companies Registry filings? | Search the register before paying |
| Has the seller given written warranties of no trading and no liabilities? | Do not proceed without them |
| Have you checked the company's tax position? | Confirm returns issued and filed |
| Will you receive all registers, minutes and the chop? | Make delivery a condition of completion |
| Have you budgeted for transfer stamp duty and change-of-name fees? | Add them to the cost comparison |
- New incorporations, typically completed within a day once KYC is complete.
- Due diligence and transfer formalities where you are acquiring an existing company.
- MAP Asia Pacific supports acquisitions of operating businesses, including due diligence and deal structuring.
In summary
- New incorporation is fast and clean.
- Shelf companies carry history and transfer costs.
- Acquiring a trading company is a different exercise and needs due diligence.
Official references
- Companies Registry: incorporation and search services, www.cr.gov.hk
- Stamp Duty Ordinance (Cap. 117)