HONG KONG SAR, CHINA Law and Practice Contributed by: Doos Choi, Pierre Dzakpasu, Ester Chow and Aditya Kurtakoti, Mayer Brown
4.5 Non-Bank Status There are no additional tax considerations nec - essary for non-bank lenders.
Security over real estate may need to be reg - istered at the Hong Kong Land Registry. As of January 2025, the fees for doing so may either be HKD230 for property transactions with value of consideration not exceeding HKD750,000 and HKD450 for those over HKD750,000. Plant, Machinery and Tangible Assets The usual form of security over plant and machinery is by way of a charge. Such charge can be fixed (provided that the chargee exerts sufficient control over the secured asset such that any dealings by the chargor with respect to that asset requires the consent of the chargee) or floating (a charge over a fluctuating pool of assets which remains under the day-to-day control of the chargor such that assets may be added or taken out of such pool despite the existence of the charge). Where it is intended to take a fixed charge over the asset, as part of seeking to exercise control as a practical matter, the chargee may require signs or plaques to be affixed which clearly state that the asset is subject to a fixed charge and that any dealing with such asset will require the consent of the chargee. Receivables, Book Debts and Other Choses in Action Security over receivables, book debts and other choses in action is commonly taken through an assignment by way of security. In doing so it is important to ensure that there are no prohibitions or restrictions on assignment in the underlying agreement giving rise to the chose in action as otherwise such assignment will be invalid. An assignment may be legal or equitable. In order to take effect as a legal assignment, (i) the assignment must be in writing; (ii) the assign - ment must be absolute; (iii) the assignment must
5. Guarantees and Security 5.1 Assets and Forms of Security
The assets over which security can typically be taken and the relevant formalities and perfection requirements are discussed below. As a general note, in addition to any other secu - rity registration requirements set out below, if (i) the security provider is a company incorporated in Hong Kong or registered in Hong Kong as a “non-Hong Kong company” under the CO, and (ii) the asset which is to be charged falls into one of the registrable categories specified in the ordi - nance (and in the case of an asset charged by a non-Hong Kong company, such asset is located in Hong Kong), a certified copy of the instrument creating or evidencing such security, together with a statement of the particulars of that securi - ty, must be registered within one month after the date of creation at the Hong Kong Companies Registry (HKCR). The cost of such registration as of January 2025 is HKD340. If a company fails to make the registration within the statutory time - frame, the company and its responsible person will be liable to default fines and the charge will be void against any liquidator and creditors of Security over real property may be taken either by way of a legal mortgage or equitable charge. A legal mortgage over real property is created by way of a “legal charge”, in writing and must be executed as a deed. A charge which does not satisfy all of the requirements for a legal mort - gage will take effect as an equitable charge. the company. Real Property
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