A Hong Kong company cannot move to Dubai, but its offshore parent can

The regime that only opens inward

A Hong Kong company cannot be moved to Dubai or Abu Dhabi. That is the first fact in any plan to relocate a Hong Kong group to the UAE, and it is usually the one the plan was not built around.

Hong Kong now has a company re-domiciliation regime. It came into force on 23 May 2025, under the Companies (Amendment) (No. 2) Ordinance 2025, which added a new Part 17A to the Companies Ordinance. It allows a company incorporated elsewhere to become a Hong Kong company while keeping its legal identity, its contracts and its history. The Companies Registry describes it plainly as an inward regime that allows non-Hong Kong corporations to re-domicile to Hong Kong "but not the other way round".

So the door is real, and it opens in one direction. A company formed under the Companies Ordinance has no statutory route to transfer its incorporation to ADGM, DIFC or anywhere else. Hong Kong shares that position with the UK and Singapore, which also accept companies without releasing them, a pattern set out in the note on moving a company to another country.

That does not make the move impossible. It makes it a question of which company in the group is actually able to travel.

The usual structure, and which layer can move

Most Hong Kong groups of any size were not built with a Hong Kong company at the top. They were built for flexibility, investment and eventual sale, and that usually meant an offshore holding company above the operating business.

The table explains why two groups that both describe themselves as "Hong Kong businesses" face very different moves. The group with a BVI parent has a mobile top company. The group whose founder owns a Hong Kong company directly has nothing at the top that can travel, and has to build a new parent in the UAE.

Moving the parent

Where the group's holding company is in the British Virgin Islands or the Cayman Islands, it can usually continue into ADGM or DIFC as the same legal person. Its home law has to permit continuance out, its constitutional documents have to allow it, and it has to be solvent and in good standing.

ADGM provides for continuance under its Companies Regulations 2020, and DIFC under its Companies Law, DIFC Law No. 5 of 2018. Both centres removed their GCC-nexus restrictions on special purpose vehicles during 2026, which widened the range of foreign holding companies that can arrive. The arrival mechanics, and the companies that can and cannot make the move, are set out in the note on redomiciling a company into ADGM or DIFC.

The point that matters most for a Hong Kong group is what continuance does not do. The continued parent is the same legal person that owned the Hong Kong company the day before. It still owns the same shares. No Hong Kong stock is transferred, so no Hong Kong stamp duty arises on the operating company's shares, and the subsidiary's own position does not change at all.

That is the strongest argument for continuance over every other route. It moves the top of the group without touching anything beneath it.

The Hong Kong company left behind

The Hong Kong operating company stays in Hong Kong whichever route is chosen. The decision is what it becomes.

Keep it as a subsidiary. This is the usual answer where the business still trades in Hong Kong or with the mainland. The company keeps its licences, contracts, staff, bank accounts and Hong Kong tax position, and the group simply has a UAE parent above it.

Move its business. Where the business is genuinely relocating, the trade, assets, contracts and staff can be transferred to a new UAE company. That is a transfer of a business, not of a company. Contracts need assignment or novation, employees need new arrangements, and the transfer of assets has its own tax and stamp duty consequences on both sides.

Deregister it. Once a Hong Kong private company has ceased operating, is solvent and has no outstanding liabilities, and all its members agree, it can apply to the Companies Registry for deregistration under section 750 of the Companies Ordinance. The application on Form NDR1 must be accompanied by a notice of no objection from the Commissioner of Inland Revenue under section 88B of the Inland Revenue Ordinance, and delivered within three months of the date of that notice.

A group should decide which of the three it wants before it moves the parent. A dormant Hong Kong company left without a plan still files, still keeps records, and still sits on the Hong Kong register with a UAE owner that nobody in Hong Kong is responsible for.

What Hong Kong charges on the way

Hong Kong is a light tax system to leave, but it is not a free one, and the cost depends almost entirely on whether Hong Kong shares change hands. It has no exit charge on a company changing residence, unlike the UK and Ireland, whose charges are set out in the note on the corporate exit tax.

Stamp duty. Transfers of Hong Kong stock executed on or after 17 November 2023 are stampable at 0.1% payable by each of the buyer and the seller, 0.2% in total, on the higher of the consideration and the market value. Continuing an offshore parent does not trigger it, because no Hong Kong shares move. A new UAE company acquiring a Hong Kong company's shares from its founder does.

The group relief. Section 45 of the Stamp Duty Ordinance exempts transfers between associated bodies corporate, meaning one beneficially owns at least 90% of the issued share capital of the other, or a third body corporate owns at least 90% of both. It is therefore available for transfers within an existing corporate group, but not where an individual sells his Hong Kong company to a new parent, because the individual is not a body corporate. The 2026-27 Budget proposed widening the relief to associated entities without share capital, with legislation expected from October 2026; the 90% test remains the core condition.

Capital gains and dividends. Hong Kong has no capital gains tax, and capital receipts are generally not taxable. It charges no withholding tax on dividends, so a Hong Kong subsidiary can pay dividends up to a UAE parent without a Hong Kong exit charge on the payment.

Profits tax stays. Hong Kong taxes profits that arise in or are derived from Hong Kong from a trade or business carried on there, whatever the owner's residence. Corporations pay 8.25% on the first HK$2 million of assessable profits and 16.5% above that. The Hong Kong subsidiary keeps paying exactly what it paid before the move.

Foreign-sourced income and a parent still run from Hong Kong

Hong Kong's territorial system has a modern exception that catches groups that move on paper but not in practice. Under the foreign-sourced income exemption regime, in force from 1 January 2023, foreign-sourced dividends, interest, income from intellectual property and gains on the disposal of equity interests received in Hong Kong by an entity in a multinational group are treated as Hong Kong-sourced and taxable, unless the entity meets an exception. From 1 January 2024 the regime extended to other disposal gains.

The exceptions are an economic substance requirement, a participation requirement for dividends and equity gains, and a nexus requirement for intellectual property income. Each is a test of real activity or real shareholding, not of where a company is registered.

The practical risk is the parent that continues into ADGM but whose directors still sit in Hong Kong and whose income is still received there. It has a UAE registration and a Hong Kong business presence, and Hong Kong can reach its foreign income. The move only removes that exposure if the parent's management and receipts genuinely leave Hong Kong.

The treaty, and where the group is really managed

Hong Kong and the UAE signed a comprehensive double taxation agreement in Dubai on 11 December 2014. It entered into force on 10 December 2015 and has effect in Hong Kong for years of assessment beginning on or after 1 April 2016. It has since been modified by the Multilateral Instrument, which both sides have signed. Where income is taxed in both places, Emirati tax paid is credited against Hong Kong tax under the agreement and Hong Kong's own law.

The treaty does not decide where a company is managed. The facts do. The UAE treats a company incorporated outside the State as resident if it is effectively managed and controlled in the UAE, under Article 11 of Federal Decree-Law No. 47 of 2022. A continued parent becomes a UAE taxpayer on arrival, but whether its decisions are actually taken in the UAE is what decides whether the group's centre of gravity has moved.

On the UAE side, a holding company's dividends and gains from a qualifying shareholding can be exempt under the participation exemption in Article 23 of that Decree-Law, and a free zone holding company can take qualifying holding income at 0% as a Qualifying Free Zone Person. A Hong Kong subsidiary taxed at Hong Kong's headline rate will usually meet the 9% subject-to-tax condition, but a Hong Kong company that pays little tax because its profits are offshore needs checking against the alternative tests. The conditions are set out in the note on when a UAE holding company is tax-free.

Owners in the mainland

Where the shareholders of a Hong Kong group are resident in mainland China, the move has a third set of rules. Outbound investment from the mainland, including a change to the offshore structure, can require filings and approvals in the PRC before the money or the shares move. Those rules are separate from Hong Kong's and the UAE's, and they are set out in the note on registering a UK company from mainland China, which applies equally to a UAE parent.

Five traps

Trap one: trying to redomicile the Hong Kong company. It cannot be done. The answer is to identify which company in the group can move, usually the offshore parent, and build the plan around that.

Trap two: re-owning the Hong Kong company when continuance was available. A group with a BVI parent that sets up a new UAE company and sells the Hong Kong shares to it pays stamp duty it did not need to pay. Continuing the parent moves the top of the group without transferring Hong Kong stock.

Trap three: assuming section 45 covers the founder. Group relief applies between 90% associated bodies corporate. An individual selling a Hong Kong company to his new UAE parent is not inside it.

Trap four: moving the registration but not the board. A continued parent whose directors still meet in Hong Kong, and whose income is still received there, has a UAE licence and a Hong Kong presence. Hong Kong's foreign-sourced income rules can still reach it.

Trap five: leaving the Hong Kong company without a decision. A dormant subsidiary still files and still carries liabilities. Decide whether it trades, is emptied, or is deregistered under section 750 before the parent moves.

Frequently asked questions

Can I move my Hong Kong company to Dubai?

Not by moving the Hong Kong company itself. Hong Kong's re-domiciliation regime, in force since 23 May 2025, is inward only, so a company incorporated in Hong Kong cannot transfer its incorporation to the UAE. What can usually move is an offshore holding company above it, such as a BVI or Cayman parent, which can continue into ADGM or DIFC as the same legal entity. The Hong Kong company then stays as a subsidiary, transfers its business, or is deregistered.

Can a Hong Kong company redomicile to ADGM or DIFC?

No. ADGM and DIFC both accept companies by continuance, but continuance needs the home law to release the company as well as the destination to accept it. Hong Kong's regime only works inward, allowing foreign companies to become Hong Kong companies and not the reverse. A group that wants an ADGM or DIFC parent either continues an offshore holding company that its home law allows to leave, or forms a new UAE company to acquire the Hong Kong company's shares.

Does moving a BVI parent to ADGM trigger Hong Kong stamp duty?

Generally not. When a BVI or Cayman holding company continues into ADGM or DIFC, it remains the same legal person and still owns the same shares in its Hong Kong subsidiary, so no Hong Kong stock is transferred and no stamp duty arises on those shares. Stamp duty becomes relevant where Hong Kong shares are actually transferred, for example where a new UAE company acquires them.

How much stamp duty is payable when a UAE company acquires a Hong Kong company?

For transfers of Hong Kong stock executed on or after 17 November 2023, stamp duty is 0.1% payable by the buyer and 0.1% by the seller, 0.2% in total, on the higher of the consideration and the market value. Intra-group relief under section 45 of the Stamp Duty Ordinance can exempt a transfer between bodies corporate that are 90% associated, but it does not cover an individual transferring his own shares to a new parent.

Does the Hong Kong company stop paying tax once the group moves to the UAE?

No. Hong Kong taxes profits that arise in or are derived from Hong Kong from a business carried on there, regardless of who owns the company or where the owner lives. A Hong Kong subsidiary of a UAE parent continues to pay profits tax at 8.25% on the first HK$2 million of assessable profits and 16.5% on the rest. Hong Kong does not charge withholding tax on the dividends it pays to the UAE parent.

Is there a double tax agreement between Hong Kong and the UAE?

Yes. The comprehensive double taxation agreement was signed on 11 December 2014, entered into force on 10 December 2015, and has effect in Hong Kong for years of assessment beginning on or after 1 April 2016. It has been modified by the OECD Multilateral Instrument. Where income is taxed in both places, Emirati tax is credited against Hong Kong tax on the same income, subject to Hong Kong's own rules.

What happens to the Hong Kong company after the move?

There are three options. It can stay as a trading subsidiary of the UAE parent, keeping its licences, contracts, staff and tax position. Its business can be transferred to a new UAE company, which is a transfer of assets and contracts rather than of the company. Or, once it has ceased operating and is solvent, it can be deregistered under section 750 of the Companies Ordinance with a notice of no objection from the Commissioner of Inland Revenue.

Can Hong Kong still tax a parent company that has moved to the UAE?

It can, if the parent is still run from Hong Kong. Hong Kong's foreign-sourced income exemption regime treats foreign-sourced dividends, interest, intellectual property income and disposal gains received in Hong Kong by a member of a multinational group as taxable, unless the entity meets economic substance, participation or nexus conditions. A parent whose directors and receipts genuinely leave Hong Kong is outside that net; one that only changes its registration may not be.

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Critical advisory. The question a Hong Kong group asks is how to move the company. The question that decides the cost is which company can move at all, and whether anything in Hong Kong has to change hands to get there. In my experience the groups that overpay are the ones that build a new UAE company first and then work out how to put the Hong Kong business under it, when the offshore parent they already own could have continued into ADGM or DIFC without a share transfer.

We map the group from the top down, continue the parent where the law allows, decide what the Hong Kong company becomes, and set up the UAE holding company's board, tax registration and substance so that the move holds when Hong Kong and the UAE both look at it. If you are planning a move from Hong Kong, speak to us through our services page before any shares are transferred. This article is general information and not legal or tax advice; your own position should be confirmed against your specific facts before you act.