Hong Kong (HK)

Jurisdiction Overview

172 *Are bearer shares available? No, bearer shares are not available/not circulating.
 Data Date: 2019


In conclusion, private companies were allowed to issue bearer shares until 1933. Those who issued bearer shares should have paid stamp duties. In 2019, the Global Forum confirmed that authorities checked that no stamp duty on bearer shares had been paid and concluded that no company had issued bearer shares previous to 1933. As for public companies, they were allowed to issue bearer shares until 2014 but provisions for pre-existing bearer shares did not ensure they would be converted/registered because s. 139 of the Companies Ordinance grandfathered bearer shares' holders until they decided to surrender them. However, Hong Kong reported in 2014 that none of the 333 public companies that could have issued bearer shares before 2014, actually issued them. Therefore, no holder of bearer share could have benefited from s. 139 (because there were no bearer shares). After 2014, public companies were not allowed to issue bearer shares. In conclusion, given that bearer shares have been prohibited since 1933 for private companies and since 2014 for public companies, and that no bearer shares were actually issued when they were still allowed, we conclude that there are no bearer shares in Hong Kong.
Specifically the Global Forum wrote: "As noted by the 2013 Report (paras 133-137), 333 public companies limited by shares were previously permitted, if so authorised by their articles of association, to issue share warrants to bearer. [...] Hong Kong authorities advised that the CR [Companies Register] has gone through the records of all relevant public companies on the Companies Register as at 28 February 2014 and no share warrant to bearer was found to have been issued before the commencement of the new CO [Companies Ordinance]. As the new CO operative from March 2014 has repealed the power to issue bearer shares, the Hong Kong authorities confirmed that currently there are no share warrants to bearer in circulation" (GF 2019: 51; [TJN's note]).
As for private companies, the Global Forum wrote "pursuant to s. 29 of the old CO which had been in effect since 1933 (now s. 11 of the new CO), a private company must restrict a member’s right to transfer shares. Accordingly, issue of share warrants to bearer has long been impossible for private companies. As a cross-checking measure, the Stamp Duty Ordinance (Cap. 117) provides that the issuance of share warrants to bearer was chargeable with stamp duty (Head 3 of the First Schedule). Given this mandatory stamping requirement, the Hong Kong authorities were able to check the records of the IRD to determine if any share warrants to bearer had been issued. IRD’s records reaffirm that there are currently no share warrants to bearer in circulation." (ibid.: 52).
The law that prohibited bearer shares for public companies didn't make it compulsory to register pre-existing ones (they were grandfathered). However, the Global Forum in 2019 wrote that in 2014 Hong Kong went through the records of the 333 public companies that could have issued bearer shares, but none of them did so. So, while the grandfathering was a problem, if no company actually issued them, no one could have benefited from the grandfathering. In 2014 it was no longer possible to issue bearer shares.


GF 2011: 33-34, 48; GF 2013: 43-44; Companies Ordinance Cap. 32 (as of August 2019): Sec. 139(2) and (3)