The second phase of the Unique Business Identifier (UBI) initiative launches in Hong Kong in December 2023. The changes will affect all entities registered with the Companies Registry, private and public Hong Kong companies limited by shares, non-Hong Kong companies registered in Hong Kong, Hong Kong companies limited by guarantee and limited partnerships.
This article summarises the key updates in the UBI initiative to unify identification numbers for companies in Hong Kong, how it compares to other jurisdictions and the impact for businesses.
This article does not, and is not intended to, constitute legal advice, and should not be relied upon as such. Our team can assist in levelling up your company’s compliance with Hong Kong’s legal standards in preparation of investors’ due diligence for capital raising, exit, M&A or investment purposes. Please contact us if you wish to learn more about this.
Until recently, Hong Kong companies were identified by separate numbers issued by the Companies Registry (CR) and the Inland Revenue Department (IRD):
| Company registration number (CRN) | Business registration number (BRN) |
| Upon incorporation, the CR provides a CRN to each Hong Kong company, which is shown on the company’s certificate of incorporation. This is usually a seven-digit number shown on the top left corner of the certificate. | All active businesses in Hong Kong – whether or not they are incorporated as a company – are required to obtain a business registration certificate (BRC) within one month of commencing business. The BRN (assigned by the IRD) is found at the bottom of a BRC in the format “12345678-000-12-12-1”. The BRN of the company is the first eight-digit number which is followed by “000” depending on the number of branches the company has. |
When is identification required for Hong Kong companies?
| The CRN is used for identification in documents prepared and kept for record by companies, such as annual returns and any form filed with the CR as well as statutory registers (members, directors, company secretaries, significant controllers and charges), minutes and written resolutions. | The BRN is used for identifying businesses and their branches. The BRC (including the BRN) must be kept at the address where business is carried out (registered office or branch address) and must be available for official inspection if required. The BRN is used to identify taxpayers for tax purposes (e.g., profits tax return or employer’s return) or as an alternate search criterion when checking the winding-up status of a company on the Official Receiver’s Office. |
Why is identification recommended for Hong Kong companies?
The name of a company alone may not be sufficient to distinguish entities that have the same name but are registered in different jurisdictions, especially if both use the same address for correspondence.
Thus, it is recommended to identify parties via an official number: CRN or BRN (which can cause confusion), and a singular UBI from 27 December 2023. The same goes for documents and records such as payslips, standard terms, purchase orders, bills, invoices or receipts.
Hong Kong’s development of the UBI
Following Singapore and mainland China, Hong Kong launched the UBI project in 2021 for two main reasons [1]:
- to reduce possible errors created by parties when identifying the same entity; and
- to assist with data exchange across government departments.
The exchange of data in Hong Kong is subject to the Personal Data (Privacy) Ordinance (Cap. 486), which requires the express consent of the data subject for the exchange of their data. This applies equally to the CR which should not disclose personal data to third parties without prior consent.
The Efficiency Office (under the Innovation, Technology and Industry Bureau of the Government of the Hong Kong SAR), the Inland Revenue Department and the Companies Registry joined forces to develop the UBI.
Split into two phases, the implementation of the UBI commenced on 1 November 2021 with its first phase for limited partnership funds. The second phase will be implemented on 27 December 2023 alongside the launch of the CR’s revamped information system (currently known as the Integrated Companies Registry Information System (ICRIS)). This phase will cover companies and entities including:
- companies incorporated or registered under the Companies Ordinance (Cap. 622);
- open-ended fund companies incorporated or registered under Part IVA of the Securities and Futures Ordinance (Cap. 571);
- limited partnerships registered under the Limited Partnerships Ordinance (Cap. 37);
- registered trustees corporations companies incorporated under the Registered Trustees Incorporation Ordinance (Cap. 306); and
- other companies or entities formed or registered under various Ordinances administered by the Companies Registrar.
What are the changes after implementing the UBI?
After the UBI is implemented, the first eight-digits of the BRN will replace the CRN and be adopted as the new UBI.
For new companies incorporated on or after 27 December 2023, the UBI will be used on the Certificate of Incorporation and Certificate of Change of Name (if any). The newly revamped information system of the CR will also adopt the BRN as the key number for searches and identification. The BRN will remain as the Hong Kong companies’ tax identification number. This streamlines the identification of companies for both the CR and IRD as well as for other administrative purposes.
Impact on the Automatic Exchange of Financial Account Information (AEOI)
To enhance tax transparency and combat cross-border tax evasion, several jurisdictions including Hong Kong[2] have implemented the Common Reporting Standard (CRS) since 2017 to enable AEOI. This allows for the collection, reporting and exchange of tax-related information and/or documents from institutional customers to identify tax residency, similar to the intergovernmental approach of the Foreign Account Tax Compliance Act (FATCA) enacted in the United States. As of October 2023, a total of 124 countries are part of the CRS[3].
The UBI is not expected to impact the AEOI since the taxpayer identification number based on the BRN is already used for this purpose.
Comparison of company identification numbers in various jurisdictions
Jurisdictions using a single identification number for tax and company registry purposes
| Singapore |
| All entities registered in Singapore are required to have a Unique Entity Number (UEN). Introduced in 2009, UENs are issued to all registered entities for convenient interaction with various government agencies. When entities file corporate tax returns or make applications for import and export permit, the UEN is used as identification. |
| China |
| China’s Unified Social Credit Code (USCC) replaced the registered business identifier in 2015. All companies operating in China are required to obtain a USCC. As a unique 18-digit number attached to each entity, the USCC helps identify and establish social credit data with the corresponding entity. The implementation allowed for more comprehensive business credit records by merging the business registration number, organisation code and the tax registration certificate number. If a company has not obtained a USCC, the local tax office will assign an 18-digit tax identification number. |
Jurisdictions using different identification numbers for tax and company registry purposes
| France | ||||||||||||
France uses SIREN as its basis for recognising companies.
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| United Kingdom (UK) | ||||||||||||
| Once a company is registered in the UK, a company registration number will be issued that consists of 8 numbers or 2 letters followed by 6 numbers. The number can be found on all companies’ certificate of incorporation. The same number is used for all documentation related to the company when dealing with the Companies House, Her Majesty’s Revenue and Customs (HMRC) and other general administration such as setting up business bank accounts. However, in comparison with Hong Kong’s new UBI, companies are given a separate unique taxpayer reference number which is issued by HMRC after registration. | ||||||||||||
| Luxembourg | ||||||||||||
| Upon being newly incorporated, all companies in Luxembourg must be registered with the Luxembourg Trade and Companies Registry (Registre de commerce et des sociétés (RCS)), which is a publicly accessible register. RCS numbers are used within the RCS registry alongside filed documents such as articles of association, liability of directors and officers as well as company accounts. This number is not used for tax purposes, as a specific file number for tax administration is allocated. | ||||||||||||
| United States | ||||||||||||
| The use of unique identifiers is prevalent in the United States, varying from state to state. For example, a company in Washington wishing to conduct business in the state must apply through the tax authority’s department to obtain a UBI number (also known as a tax registration number, business registration number or business licence number). In Delaware, company tax identification numbers are not required, however all companies with employers must obtain a separate number: the Federal Employer Identification Number (FEIN). To open a business account in this state, most banks require a FEIN. |
What are the next steps for Hong Kong companies?
The CR has already started issuing letters to all companies incorporated or registered in Hong Kong regarding the replacement of the existing CRN with the BRN in preparation for the UBI implementation.
The CR has revised 117 forms to facilitate the implementation, to be used from 27 December 2023. It has also provided contact numbers for form enquiries relating to:
| Incorporation and registration of companies and change of company name | Miss Mandy SIU, Assistant Registry Manager (New Companies) | (852) 2867 6477 crenq@cr.gov.hk |
| Annual Returns, directors, company secretaries, authorised representatives and share capital | Ms Kamela HAMET, Assistant Registry Manager (Registration) | (852) 2867 6476 crenq@cr.gov.hk |
| Charges, liquidation, receivers and managers | Mr CHAN Ching-hang, Assistant Registry Manager (Charges & Liquidation) | (852) 2867 2611 crenq@cr.gov.hk |
| Deregistration of companies | Ms Vonnie TSANG, Assistant Registry Manager (Deregistration) | (852) 2867 2631 crenq@cr.gov.hk |
From 25 January 2024 onwards (four weeks from the phase two implementation date), the current forms (NNC1, NNC1G, NNC5 and NN1) will no longer be accepted.
Key Takeaways
What are the changes?
The first eight digits of the BRN on the BRC will be adopted as the UBI. The UBI will be used for all filings related to the CR or IRD, as well as for company searches and other administrative procedures.
When are the changes being made?
27 December 2023 is when the second phase of the UBI implementation commences. From this date, company secretaries should use the new forms issued by the CR.
Who is affected by the changes?
All entities registered with the CR will be affected by the UBI implementation. Directors and company secretaries in particular should be fully informed of these changes in order to comply with their statutory duties.
Our team can provide assistance to level up your company’s compliance with Hong Kong’s legal standards in preparation of investors due diligences for capital raising, exit, M & A or investment purpose. Please contact us if you wish to learn more about this.
[1] Implementation of Phase 2 of Unique Business Identifier (Companies Registry External Circular No. 3 / 2023)
[2] Inland Revenue (Amendment) (No.3) Ordinance 2016 – Ord. No. 22 of 2016
[3] Status of commitments for the automatic exchange of financial account information (AEOI) (oecd.org)
