Debt collection in Hong Kong

How to recover a trade debt from a debtor based in Hong Kong

Hong Kong represents an important financial and commercial hub for foreign companies exporting to mainland China and Asia. Many business relationships, though, are entered into quickly and with a degree of mutual trust, but without devoting sufficient attention to contractual and credit protection tools. The risk of the Hong Kong-based counterparty being a mere intermediary, however, is real and must be handled with great care.  The cost-effectiveness of litigation in Hong Kong should also be considered, considering the high legal costs (solicitor and barrister fees), the possible obligation to provide “security for costs,” and the risk of having to reimburse the counterparty’s legal fees in the event of a loss.

Legal actions for international debt collection in Hong Kong

Several actions are available to those who wish to recover a debt against a debtor based in Hong Kong:

  • Small claims court: competent for claims up to HKD 75,000 (approximately US$9,500).
  • District Court: competent for claims between HKD 75,001 and HKD 3,000,000 (up to about USD 380,000).
  • High Court: competent for claims exceeding HKD 3,000,000.
  • Insolvency proceedings: a creditor may file a “statutory demand” for amounts of HKD 10,000 and above; if payment is not made within 21 days, the debtor is deemed insolvent and liquidation proceedings may be initiated.
  • Recognition of foreign judgments: a creditor who has already obtained a judgment abroad must initiate registration proceedings in Hong Kong to make it enforceable, which is possible thanks to the Foreign Judgments (Reciprocal Enforcement) Ordinance, which includes Italy among the designated countries

Why rely on an experienced attorney for debt collection in Hong Kong

Managing a debt collection in Hong Kong requires practical and strategic assessments: from the cost-effectiveness of initiating an action, to the correct choice of jurisdiction, to the possible use of insolvency proceedings.

Ursusnetwork offers the possibility of receiving legal assistance from a specialized attorney for international debt collection in Hong Kong, identifying the most effective strategy based on the type of credit and the debtor’s conditions, with the aim of reducing the time and cost of the action.

To learn more about the main features of the debt recovery system in Hong Kong, you can consult the Practical Information below.