Enterprises who meet the requested financial and business criteria may apply to Hong Kong Exchanges and Clearing Limited for IPO in Hong Kong.
Advantages of IPO in Hong Kong
|Access to capital for growthOpportunities to raise funds at time of listing and thereafter
|Broader shareholder baseInvestors from a more liquid market
|Employee incentiveLink up commitment with employee by granting of employee share options
|Higher profile and visibilityBring confidence to the Company’s suppliers and customers
|Increased corporate transparencyBetter credit to bankers
|Well established legal systemBest protection to issuers and investors
|Simple tax systemLow profits tax rate, no tax on dividend income and capital gain
|No foreign exchange controlCapital is freely circulate among different locations
A decision to list must be made after due and careful assessment of your company, its business strategy and the intentions of its shareholders and management.
You should consider the following questions:
- what is the rationale for listing the company? Is the company looking for capital to fund its development? And does a listing fit into the company’s overall strategy?
- are the company and its management aware of the time and cost involved in a listing exercise?
- are the shareholders ready to accept a degree of loss of control in the company, where certain transactions may require the prior approval of the company’s independent shareholders?
- is the management prepared to accept the rigorous on-going obligations that is demanded of a listed company and accept closer scrutiny by the public?
- are the directors aware that any changes of personnel at the board level may affect the company’s share price and investor confidence?
- is the company’s management willing to commit time to meeting and communicating with its investors and research analysts?
- will the management be able to balance the company’s short term performance such as maximising shareholders’ value with its longer term corporate strategy?
- are the directors aware of their fiduciary duties and restrictions on dealings once a company is listed?