Basic Information
License plate type
Hong Kong 1,4,9 license
Issued Area
Hong Kong
s
Hong Kong SFC
Validity period
Continuously valid (annual review required)
price range
Negotiable
Licence Details
| 1 | Consideration (exclude NAV) | Negotiable |
|---|---|---|
| 2 | SFC License Type | 1 & 4 & 9 |
| 3 | Licence Conditions (if any) | No |
| 4 | Office & Rentals | Kowloon, Hong Kong |
| 5 | Rental expiry | 2025 January 9 |
| 6 | Number of shareholders | 3 |
| 7 | Holding Company above Licensed Corp | a BVI company |
| 8 | HKEX trading right (if applicable) | No |
| 9 | Total expenses per month | HKD 175,000 |
| 10 | No. of Staff | There is currently 1 employee, who is transferring |
| 11 | No. of RO | 2 |
| 12 | Will the RO stay after transfer? | Need to communicate and negotiate with the RO |
| 13 | Total payroll | HKD 105,250, (including RO salary HKD 55,000) |
| 14 | 3 years Profit/Loss | Not yet opened |
| 15 | Monthly net income in the past six months | Not yet opened |
| 16 | Latest financial report | 2024/12/31審計2023年度，2024年審計正在進行 |
| 17 | Do you have any long-term agreements with other companies or institutions? Long term agreement with other institutions |
Compliance consultant complianceplus 9500 HKD/month; Payroll agency ADP 2000 HKD/month; Secretary fee 8400 HKD/year |
| 18 | Auth. & Paid-up capital | HKD 20,556,000 |
| 19 | Net Asset Value NAV | HKD 5,335,491.66 (24-year audit report has not been completed, but the bank balance is expected to be HKD 4,513,707.15) |
Hong Kong 1,4,9 license acquisition process and timetable
| Stairs | content | Points to note | Estimated cycle |
|---|---|---|---|
| 1. Initial Due Diligence | – Review of financial statements (audited in 2023, in progress in 2024), NAV (HKD 5,335,491.66), bank balance (HKD 4,513,707.15).
– 確認牌照（1、4、9號，無條件限制）、股東結構（3名股東，BVI控股）、RO資質（2名，薪資HKD 55,000）。 – Check the lease (ICC, expires on September 2025, 9), long-term contract (compliance consultant HKD 30/month, ADP HKD 9,500/month, secretarial fee HKD 2,000/year). |
– Hire lawyers, accountants, and compliance consultants.
– Confirm the legal and tax status of the BVI holding company. – Verify the difference between NAV and bank balance. |
2-4 weeks |
| 2. Negotiation and signing of Letter of Intent (LOI) | – A preliminary consensus was reached on the transfer price (HKD 3.5 million, excluding NAV), RO retention, lease, etc.
– Signing of a non-binding letter of intent. |
– Confirm whether NAV is factored into the final price.
– Assess the potential risks of non-operation status. |
1-2 weeks |
| 3. Signing of the formal agreement (SPA) | – Drafting of share transfer agreement, covering price, payment method, RO arrangement, contract transfer.
– Clarify the transaction completion conditions (such as SFC approval). |
– Ensure compliance with Hong Kong Company Ordinance and SFC requirements.
– Review of BVI holding company related provisions. |
2-3 weeks |
| 4. SFC change application | – Submit an application for substantial shareholder change, including the buyer’s background, financial status, and business plan.
– Confirm the retention of RO or nominate a new RO (subject to SFC approval). |
– Ensure that the buyer and RO meet the SFC eligibility criteria.
– RO replacement may extend the approval time. |
4-8 weeks |
| 5. Transaction Completion and Delivery | – Complete payment (HKD 3.5 million + NAV or as negotiated).
– Transfer of shares, update of company and SFC information. – Processed lease and contract transfers and completed employee transition (1 employee transferred). |
– Ensure transfer of bank balances and other assets.
– Confirm lease and long-term contract transfer details. |
1-2 weeks |
| 6. Subsequent compliance and operations | – Start business (not yet in business, need new business plan).
– Ensure capital adequacy (HKD 20,556,000), annual audit. – Processing lease renewals or relocations. |
– Continue to use compliance consultants to ensure SFC compliance.
– Develop business plan and update SFC. |
ongoing |
Total cycle
- Shortest: 3-4 months (with complete information and no RO replacement).
- Normal: 4-6 months (considering RO negotiation and SFC approval delays).
- Delay factors: RO replacement, financial issues, SFC supplementary information requirements.
FAQs on Hong Kong Financial License Trading
How does the issue of retention of responsible officers (ROs) during a transfer affect the transaction?
The two ROs (salary HKD 2) need to negotiate whether to stay or not. They may not be willing to continue or ask for higher salary. The SFC requires at least 55,000 ROs. If one resigns, a new RO must be nominated and approved by the SFC, which may extend the transaction cycle by 2-1 months. New ROs may be rejected if they do not meet the qualifications.
Solution suggestions: Communicate with ROs in advance to clarify retention conditions or compensation; prepare a list of candidate ROs to ensure they meet SFC qualification standards.
Solution suggestions: Communicate with ROs in advance to clarify retention conditions or compensation; prepare a list of candidate ROs to ensure they meet SFC qualification standards.
What challenges does the issue of financial transparency bring?
The non-operating company has no revenue record, there is a discrepancy between NAV (HKD 5,335,491.66) and bank balance (HKD 4,513,707.15), the audit in 2024 has not been completed, and there may be hidden liabilities or financial inconsistencies. The buyer may question the rationality of the transfer price of HKD 3.5 million, and the SFC may request additional information and delay approval.
Solution suggestions: Entrust an accountant to conduct due diligence to verify the difference between NAV and balance; provide the latest financial statements or bank statements.
Solution suggestions: Entrust an accountant to conduct due diligence to verify the difference between NAV and balance; provide the latest financial statements or bank statements.
What are the reasons for the delay in SFC approval?
The SFC has strict scrutiny over changes in substantive shareholders or directors and needs to verify the buyer's background, financial status and business plan. If the information is incomplete, the buyer is not qualified enough, or the RO is changed, the approval process may be extended by 4-8 weeks or longer.
Solution suggestions: Prepare complete information in advance (buyer background, business plan); ensure that the RO remains in office or the new RO’s qualifications meet the requirements.
Solution suggestions: Prepare complete information in advance (buyer background, business plan); ensure that the RO remains in office or the new RO’s qualifications meet the requirements.
What issues does a BVI holding company structure raise?
As a holding company, a BVI company may be subject to offshore tax, legal obligations or additional disclosure requirements. If the buyer is not familiar with offshore structures, it may increase the complexity of due diligence or the time required for SFC review.
Solution suggestions：Hiring offshore legal advisors to verify BVI company obligations and equity structure; ensuring that the SFC application includes holding company information.
Solution suggestions：Hiring offshore legal advisors to verify BVI company obligations and equity structure; ensuring that the SFC application includes holding company information.
What problems will changes in shareholder structure cause?
The company has three shareholders and is held through a BVI holding company. If there are disagreements among shareholders over the transfer agreement, or the BVI company’s shareholding structure is complex, it may lead to delays in transaction negotiations or legal disputes. The SFC requires disclosure of all substantial shareholders (holding more than 3% of shares). If shareholder information is incomplete, it may affect approval.
Solution suggestions: Confirm the consensus of the three shareholders on the transfer in advance and sign a shareholder agreement; hire a lawyer to review the equity structure of the BVI company and ensure that the SFC application materials are complete.
Solution suggestions: Confirm the consensus of the three shareholders on the transfer in advance and sign a shareholder agreement; hire a lawyer to review the equity structure of the BVI company and ensure that the SFC application materials are complete.
How do employee transition issues impact deals?
The company currently has 1 employee (who plans to transfer), and the employee's resignation may involve severance pay or labor disputes. If not handled properly, it may increase the buyer's costs or legal risks.
Solution suggestions：Confirm employee resignation arrangements and severance pay (whether included in the monthly expenditure of HKD 175,000); ensure that the termination of the labor contract complies with Hong Kong labor laws.
Solution suggestions：Confirm employee resignation arrangements and severance pay (whether included in the monthly expenditure of HKD 175,000); ensure that the termination of the labor contract complies with Hong Kong labor laws.
How will tax issues affect the transaction?
The BVI holding company may be involved in offshore tax arrangements and the Hong Kong local company may have outstanding taxes (such as profits tax). If proper disclosure is not made, the buyer may incur additional tax liabilities or penalties.
Solution suggestions：Engage tax advisors to review the tax status in Hong Kong and BVI; ensure that the transaction structure takes tax optimization into consideration and clearly allocates tax responsibilities.
Solution suggestions：Engage tax advisors to review the tax status in Hong Kong and BVI; ensure that the transaction structure takes tax optimization into consideration and clearly allocates tax responsibilities.
What are the issues with post-transaction capital requirements?
The SFC requires licensed companies to maintain minimum capital (e.g. approximately HKD 1 million for a Type 300 license, and for Type 4 and Type 9 licenses depending on the size of the business). The company's registered capital of HKD 20,556,000 is sufficient, but if NAV (HKD 5,335,491.66) decreases due to transaction costs or business start-up, additional capital injection may be required.
Solution suggestions：The buyer evaluates the capital needs after the business starts; ensures that the post-transaction NAV meets SFC requirements to avoid the pressure of additional capital.
Solution suggestions：The buyer evaluates the capital needs after the business starts; ensures that the post-transaction NAV meets SFC requirements to avoid the pressure of additional capital.
What challenges does office lease transition issues present?
The ICC office lease (expiring on September 2025, 9) may be expensive (monthly outlay of HKD 30 may include rent), and the buyer will have to bear relocation costs or early termination fees if the lease is not renewed.
Solution suggestions: Review lease terms and confirm termination conditions; evaluate renewal costs or search for a more economical office location.
Solution suggestions: Review lease terms and confirm termination conditions; evaluate renewal costs or search for a more economical office location.
What problems might arise from hidden legal or litigation risks?
A non-operating company may have undisclosed legal disputes (such as those related to suppliers, shareholders or former employees), or a BVI holding company may be involved in offshore litigation, which may affect the smooth progress of the transaction or increase the buyer's liability.
Solution suggestions: Hire a lawyer to conduct legal due diligence and verify the litigation records in Hong Kong and BVI; require the seller to provide a statement of no litigation.
Solution suggestions: Hire a lawyer to conduct legal due diligence and verify the litigation records in Hong Kong and BVI; require the seller to provide a statement of no litigation.
What problems will restrictions on the transfer of a company’s registered capital cause?
The company’s registered capital (HKD 20,556,000) is sufficient, but if the shareholders’ agreement or the BVI holding company’s articles of association have special restrictions on capital transfers, the transaction structure may be complex or require additional approvals.
Solution suggestions：Review the BVI company's articles of association and shareholders' agreement; ensure that the transfer complies with the Hong Kong Companies Ordinance and BVI laws.
Solution suggestions：Review the BVI company's articles of association and shareholders' agreement; ensure that the transfer complies with the Hong Kong Companies Ordinance and BVI laws.
What will be the impact of brand or reputation issues after the transaction?
A non-operating company has no operating history, but if the company name or BVI holding company has negative associations in the market (even if not disclosed), it may affect the buyer's future business promotion.
Solution suggestions: Investigate the company name and reputation of the BVI holding company in public channels; consider changing the name to reduce potential risks.
Solution suggestions: Investigate the company name and reputation of the BVI holding company in public channels; consider changing the name to reduce potential risks.
What challenges do background issues of shareholders or ROs bring?
If the existing three shareholders or two ROs have undisclosed regulatory penalties, bankruptcy records or other non-compliant backgrounds, the SFC may reject the change application or require additional review, thereby extending the transaction cycle.
Solution suggestions：The seller provides background statements of shareholders and ROs; the buyer entrusts a professional organization to conduct a background check to ensure that it meets the SFC qualification standards.
Solution suggestions：The seller provides background statements of shareholders and ROs; the buyer entrusts a professional organization to conduct a background check to ensure that it meets the SFC qualification standards.
What are the issues regarding business license expansion after the transaction?
Licenses 1, 4 and 9 cover securities trading, advice provision and asset management, but if the buyer plans to engage in other regulated activities (such as license 2 or 6 business), it will need to apply for a new license from the SFC, which may increase time and cost.
Solution suggestions：The buyer evaluates business needs in advance and communicates with the SFC in advance about the license expansion requirements; ensures capital (HKD 20,556,000) to support the new license application.
Solution suggestions：The buyer evaluates business needs in advance and communicates with the SFC in advance about the license expansion requirements; ensures capital (HKD 20,556,000) to support the new license application.
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