What should you do with a five-year-old invoice from a supplier who no longer exists?

In Hong Kong, keep it for at least two more years. The rules are clear and they apply to every company, whatever its size or industry.

Here's how long to keep what, and what happens if you fall short.

The seven-year rule

Hong Kong companies must keep accounting records for a minimum of seven years. That comes from two separate pieces of legislation.

The Companies Ordinance requires records to be kept for seven years from the end of the financial period they relate to. The Inland Revenue Ordinance requires taxpayers to keep records for seven years so the IRD can verify their tax position.

One detail that matters more than it sounds: the seven years runs from the end of the accounting period, not from the date on the document. An invoice from January 2026 relating to a year ending 31 March 2026 has to be kept until 31 March 2033.

Don't delete on closure either

A founder deleted his records after closing the company, assuming they were no longer needed. The IRD reopened the assessment six months later. With nothing to support his position, he paid additional tax and penalties on estimated figures.

What's covered

The seven-year requirement applies to a lot more than the formal accounts.

  • Sales invoices and receipts issued to customers
  • Purchase invoices and receipts from suppliers
  • Bank statements and reconciliations
  • Payroll records and MPF contribution history
  • Expense receipts and reimbursement records
  • Contracts and agreements with customers and suppliers
  • Stock records and inventory counts
  • Import and export documentation
  • Fixed asset registers
  • The formal accounting records themselves: general ledger, trial balance, financial statements

One founder kept everything physically in an office drawer. A water leak destroyed two years of documents and he had to reconstruct the lot. Keep copies in more than one place.

Statutory records are separate

Accounting records and statutory company records are different things under different rules, and both have to be kept.

Statutory records live at your registered office or principal place of business and include the register of members, the register of directors and company secretaries, copies of resolutions passed, minutes of general meetings, and instruments of transfer of shares.

The Companies Ordinance requires these to be kept for as long as the company is active, and for a period after dissolution. The seven-year rule doesn't apply to them in the same way. Store them separately from your accounting records so the two don't get muddled.

Digital is fine

Hong Kong law doesn't require paper. Digital records are perfectly acceptable, as long as they are:

  • Complete and unaltered
  • Accessible for inspection if the IRD or Companies Registry asks
  • Capable of being printed in legible form

Scanned PDFs of original paper documents are fine. Cloud storage is fine, provided you can reliably retrieve everything.

Two warnings from experience. A founder using a cloud service that shut down without much notice lost years of records. And if you use accounting software, make sure you keep access to the historical data even after you switch providers. Migrating platforms and losing your history is not an excuse the IRD accepts.

What happens if you destroy them early

Destroying accounting records before the seven years are up is a criminal offence under the Companies Ordinance. Penalties include fines for the company and, in serious cases, personal liability for directors.

Under the Inland Revenue Ordinance, failing to keep records can also lead to the IRD estimating your profits, issuing additional assessments based on those estimates, and imposing penalties for negligent or wilful non-compliance.

The IRD can audit companies for up to six years after the relevant year of assessment. Your records are your defence in any such review, and without them you're arguing against the IRD's own estimate.

A storage system that works

Keeping seven years of records organised doesn't need to be complicated.

Create a folder for each financial year. Inside each one, separate folders for bank statements, invoices, expenses, payroll and contracts. Scan physical documents as they arrive rather than in an annual pile, and back the whole thing up to at least one location that isn't your office.

Then don't delete anything from a financial year folder until the seven years have clearly passed.

Tagged by year and category, this turns an audit request from a two-day search into a twenty-minute one.

When you can finally delete

Once seven years have passed from the end of the relevant accounting period, you're legally allowed to destroy the records. Before you do, check three things:

  1. Are there any legal disputes pending or possible where those records might matter?
  2. Are there ongoing IRD queries or audits relating to those years?
  3. Do the records relate to assets still sitting on your balance sheet?

That last one catches people. For assets you still own, keep the acquisition documents until the asset is disposed of, even if that runs well past seven years.

The short version

Seven years sounds like a long time, but with cloud storage and a sensible folder structure it costs almost nothing to comply.

Set up a retention system on day one, make sure your accountant knows where everything lives, and review once a year whether anything has passed its date.

Common questions

How long do I keep accounting records?

Seven years from the end of the accounting period they relate to, under both the Companies Ordinance and the Inland Revenue Ordinance.

Does the clock start from the document date or the year end?

The end of the accounting period. A January 2026 document relating to a year ending 31 March 2026 must be kept until 31 March 2033.

Can I keep everything digitally?

Yes, provided the records are complete, unaltered and accessible for inspection.

What does the rule cover?

Invoices, receipts, bank statements, payroll records, contracts, expense records, and all the formal accounting records including the general ledger and financial statements.

What's the penalty for destroying them early?

It's a criminal offence under the Companies Ordinance. The IRD can also estimate your profits, issue additional assessments and impose penalties.

What about assets I still own?

Keep the original acquisition documents until the asset is disposed of, even if that goes beyond the seven-year window.

J

Written by Jan Chow

Jan runs Hong Kong Jan, a small corporate services practice in Central. She has spent her whole career setting up companies across Hong Kong, China, Taiwan and Southeast Asia. These days she looks after founders herself, so you are never talking to a call centre. More about Jan.