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WHY USE DEBITURA? 

Recovering your debt in Hong Kong can be made easier by utilizing this method.

Debitura is a Hong Kong-based debt recovery specialist that offers a wide range of services. Our team of skilled professionals provides accounts receivables management, debt collection notices, pre-legal and legal debt collection, and enforcement court proceedings. We specialize in Hong Kong debt collection laws and regulations, enabling us to deliver efficient and effective solutions to help businesses recover outstanding debts.

We provide unwavering assistance throughout the entire process.

Tailored approach for debt recovery.

We have a team of over 500 professionals who specialize in debt collection worldwide.

Achieving a 87% success rate with the lowest cost.

INTRODUCING OUR LOCAL PARTNERS: Leading Debt Collection Lawyers in Hong Kong.
Units 23804-07, 28/F., Man Yee Building, No. 68 Des Voeux Road Central, Central, Hong Kong
Patrick Chu, Conti Wong Lawyers LLP

We are specialized in debt recovery, bankruptcy and winding-up. We are also specialized in shareholders dispute.

Lawsuits
Legal collection
Debt enforcement
50
2019
Law firm

The ultimate guide about debt collection in Hong Kong

Are you seeking financial retribution from someone in Hong Kong? Look no further! We have served numerous other businesses with their debt collection needs.

Struggling to recollect a debt in Hong Kong can be daunting due to cultural differences, foreign laws, and the geographic distance between you two. This is why it's best to work with an agency that comprehends these barriers and has expert knowledge of the country where your debtor resides. Hundreds of customers have already used our services successfully; allow us to help take away some of the stress associated with this process for you too!

At Debitura, we focus on people first and prioritize getting your money back whilst sustaining a positive relationship with customers. Our public relations strategies are reasonable yet effective- ensuring that your reputation is our number one priority!

If you'd like to become well-versed in the detailed debt collection process of Hong Kongers from start to finish while collecting debts independently, keep reading this guide. Alternatively, if working with an experienced local law firm dedicated to debt recovery in Hong Kong appeals more to you -we can help too!

New to debt collection?
The debt collection process can be complex and daunting for those new to it. Our team of experts is here to help you understand the process and navigate it with ease. Get free expert advice on your specific case, provided by our team of experienced professionals.

At Debitura, we provide a straightforward path to reclaiming your debt around the world. Start now by uploading your claim and within 24 hours you'll receive three free quotes from local Hong Kong attorneys who specialize in debt collection. Don't wait—collect what's yours today! Our team of debt collectors, attorneys, suppliers and vendors are all integral parts to our unique approach in driving results while maintaining customer relationships. We incorporate the latest tech-driven solutions with a people-oriented mindset to deliver the desired outcomes for our clients. What's more, every one of these connections is highly valued as many small entities come together collectively to get the job done effectively!

We work with the following process: 
1

Upload claim

Begin the process of collecting your debt in Hong Kong without cost today. Easily create a free profile and upload your case in just two minutes.

2

Pre-legal

We have a proven pre-legal recovery process to collect your claim for 3 months. During this time, we offer a 100% no-cure-no-pay service.

3

Legal

If your claim remains unpaid during the pre-legal phase, we will present you with three quotes from our team of local debt collection attorneys.

4

24/7 updates

You get access to our online portal where you can track your case in real-time

Introduction to collecting debt in Hong Kong

Struggling to get paid by Hong Kong customers? Let us take the hassle out of collections for you. In debt recovery in Hong Kong, creditors are responsible for receiving payment while debtors owe money on an invoice or other contract. If a creditor seeks assistance from an outside service provider, they opt into third-party collection services; if they want to collect themselves, this is known as first-party collection. Here at XYZ Company we make it easy and effortless for businesses like yours to reclaim what's rightfully theirs!

  • The payment tendencies of homegrown companies are tolerable, taking an average of 30 to 90 days. Unhappily, delays and late payments cannot be monitored by legal measures due to the lack thereof.
  • Trustworthy and expeditious, Hong Kong courts are a dependable source for business disputes. Unfortunately, when it comes to insolvent debtors the law does not offer any clear-cut measures to restructure their financial obligations.

Days Sales Outstanding

On average, payments in Hong Kong take place from 30 to 90 days. For domestic companies, although default is uncommon, delays of up to 60 days are typical. Fortunately for listed companies, the DSO has been steadily decreasing over the past few years.

Common payment types in Hong Kong

Below are the most commonly used payment methods:

Bank transfers are an extremely reliable, safe, and rapidly developing method of payment both domestically and internationally. To further ensure the security of your exports, Allianz Trade provides Export Credit Insurance policies to protect against any potential customer insolvency or monetary loss. Additionally, our worldwide network is constantly monitoring your customers’ financial standing in order to establish a specific credit limit for trading with peace-of-mind that you will be compensated should anything unforeseen occur.

Alternatively, as an expression of good faith and dependability, Standby Letters of Credit (where a bank guarantees payment from the debtor) act as reliable assurances which can be activated if necessary. Additionally, Irrevocable and Confirmed Documentary Letters of Credit (which denotes that the debtor ensures funds are accessible through a bank upon completing agreed terms) are frequently used.

Bank guarantees can be obtained quickly, opening the possibility of negotiating down payments based on the amount at hand. Cheques are also a popular alternative to Bills of Exchange.

Establishing a corporate framework, the foundations of modern businesses.

Depending on their legal structures, businesses may be held liable for various debts. Here is a summary of the types of liability:

  • For many small businesses, proprietorship is the go-to option due to its reliance on a single owner's entrepreneurial skills and personal ownership of company assets. Of course, with this kind of arrangement comes complete individual liability for all business dealings and related debt.
  • Partnering up gives multiple individuals the opportunity to share both ownership and responsibilities, while not having to incorporate a business. Keep in mind, however - when working with partners, all are held accountable for one another's actions; both together as an entire partnership and individually.
  • Private Limited Companies are the most popular business entities on the market due to their low requirements: only a director (non-residents can participate) with limited liability and a company secretary (either an individual or another company). The capital requirement is minimal, approximately EUR 110,000. Conversely, Public Limited Companies offer shares that are liable for public trading when raising equity. As such they remain the preferred choice of larger companies who require this feature.
  • In Hong Kong, with the large number of cross-border businesses present, Branch Offices are frequently seen; however, it is important to note that because these entities lack separate legal structures from their parent companies and offer no liability limitations. As a result, Subsidiaries tend to be established as Private Limited Companies due to added protection they provide. For Joint Ventures that require more flexibility in structure, partnerships are often used despite not having any specific designated form for this type of business organization. Lastly Representative Offices may also be employed if an entity wants to conduct market exploration but cannot partake in activities leading directly towards profit generation.

The debt collection process in Hong Kong

Executing debt collection in Hong Kong is ordinarily carried out in several stages.

The image below explains the process we use to collect debt in Hong Kong:

1 Upload your claim:

If you want someone else to help you with your debt, you will start by finding a company that deals with debt collection. You will then upload your claim onto their website. If you use Debitura, we will provide you with 3 quotes from local partners in the Asia country where your case is taking place. This is free - there are no conditions attached.

2 Amicable collection:

If someone owes you money, we can help you get it back. We will send reminders to the person who owes you money. We will try to get them to pay you back or at least start a plan to pay you back. If we are successful, then you only have to pay us a small success fee. There is no risk if we do not succeed!

3 Evaluation:

If the person you lent money to has not paid you back after you have talked to them, it is time to decide what to do next. We will look at how much money you are owed, the chance of getting paid back, and other factors to help you decide what to do. There are three typical next steps:

A Surveillance:

If your claim is for less than 2.000-5000€, it is often not worth it to take more legal actions. In this case, we recommend "debt surveillance". We will keep trying to reach your debtor and try to negotiate an agreement that is fair for both sides.

B Legal collections:

We suggest taking legal action for bigger problems. The way to do it varies depending on the specific problem and how big it is. Usually, it will take around one and a half to two years to finish the process.

C: Debt enforcement:

If the person you are owed money from has said that they owe you money or if there is a court order, you can go to the bailiff's court to get your money.

At Debitura, we are proud to provide detailed support and guidance throughout the entire registration process in Hong Kong.

5-star user rating5-star user rating5-star user rating5-star user rating5-star user rating
"We were struggling with unsuccessful debt collection in Hong Kong until Debitura stepped in. They delivered results quickly and effectively. Their expertise in debt collection in Hong Kong is second to none!"
Helen Wong - Chief Financial Officer
5-star user rating5-star user rating5-star user rating5-star user rating5-star user rating
"Thanks to Debitura, our company was able to recover outstanding debt in Hong Kong with ease. Their debt recovery Hong Kong service is efficient, effective, and highly recommended!"
Lena Wong - Accounts Receivable Manager
4.97/5
Average rating based on feedback from over 600 satisfied clients
87%
Average debt recovery rate, exceeding industry standards
100M+
Debt recovered for our clients in the past 18 months

Amicable collection in Hong Kong

At Debitura, our risk-free and highly effective Amicable collections process is simple. Submit your claim today and be sure that we will begin working on it within 24 hours!

To maximize the chances of successfully recouping your debt, we will contact your debtor through all available mediums in Hong Kong—including e-mails, texts, letters, phone calls and social media.

This process is designed to:

A) Secure the entire payment from the debtor, or 

B) Receive a confirmation of debt and initiate an organized repayment plan.

If the debtor has challenged your claim, you must bypass friendly negotiations and immediately move to legal collections.

Late payment interest

Due to the lack of a legal framework, late payment interest is something that is agreed upon by both parties involved in a contract. This means that without clearly defining which party will bear responsibility for any accrued late payment interest, seeking debt collection can become tangled and problematic. For example, many businesses operate with no written sales contracts but instead rely on purchase orders or verbal agreements that do not designate who would be liable for associated late payment interests.

Get started with
amicable debt collection

Upload your claim and get started with our 100% no-cure-no-pay collection solution.

100% free
Get the best price
No-cure-no-pay
Fast collection process
High recovery rate
100%
Risk free
Upload claim!

Debt enforcement in Hong Kong

If you are in possession of a written acknowledgment from the debtor or court order, then the bailiff's court in Hong Kong can help enforce your claim.

When a judgment is settled and becomes final (with no appeal lodged within 28 days), enforcing the law may begin. When debtors cannot meet the obligations of payment, they can request an enforcement order from court to minimize their losses. This could comprise of garnishee orders which permit claimants to acquire repayment through third-party funds belonging to debtors; Fieri Facias orders allowing bailiffs to confiscate any tradable goods owned by debtors in exchange for payments; or even charging orders that grant seizing and selling rights over real-estate properties owned by defaulters as recompense for debts owed. The court can assign a receiver to oversee the enforcement proceedings and issue an insolvency order. They may also demand a prohibition order restraining the debtors from leaving Hong Kong.

In order to gain a better understanding of the company's financial standing, courts may issue Examination Orders that authorize verbal interviews with the Director of the debtor firm. This will provide additional insight into their current state and help ensure all information is accurate before making any further decisions.

Uncertain about the exact process or costs related to your particular situation? Debitura has you covered. All it takes is submitting a case, and within 24 hours we will provide three precise quotes for your claim. It's that straightforward - yet unbelievably effective! That is the heart of what makes Debitura so reliable.

Get started with
debt enforcement

Upload your claim and get 3 FREE quotes from our local collection partners.

100% free
Get the best price
No-cure-no-pay
Fast collection process
High recovery rate
100%
Risk free
Upload claim!

Insolvency proceedings in Hong Kong

If your debtor is unable to pay his or her debts, the last resort you can take is a bankruptcy proceeding. The objective of this process is to liquidate all of the debtor's assets and divide them among creditors according to debt priorities.

  • Restructuring proceedings in Hong Kong take place through informal workouts, compositions, and schemes of arrangement between parties concerned, with no formal procedures specified by law.
  • A company may enter into a binding compromise with shareholders and/or creditors at any time.
  • Liquidation (winding up) under the Companies Ordinance & Companies Rules (Chapter 32) may be initiated on demand of the debtor or creditor. In this case, a liquidator is appointed and creditors must file their claims with the liquidator.
  • Priority rules normally apply whilst distributing proceeds to creditors, with costs relating to insolvency proceedings given top priority followed by secured creditors, then wages/government debts (preferential status), then unsecured claims.

Hong Kong country risk profile

We have studied Hong Kong's critical financial data and extrapolated a risk assessment. You can use this analysis to evaluate your payment terms and manage your risk when doing business with customers in Hong Kong.

Low risk
5-10
Medium-low risk
11-15
Medium risk
16-20
Medium-high risk
21-23
High risk
24-26
Low risk
5-10
Medium-low risk
11-15
Medium risk
16-20
Medium-high risk
21-23
High risk
24-26
Low risk
5-10
Medium-low risk
11-15
Medium risk
16-20
Medium-high risk
21-23
High risk
24-26
Low risk
5-10
Medium-low risk
11-15
Medium risk
16-20
Medium-high risk
21-23
High risk
24-26
Low risk
5-10
Medium-low risk
11-15
Medium risk
16-20
Medium-high risk
21-23
High risk
24-26

Our analysis has shown that the risk of doing business in Hong Kong is medium-low. Based on this medium-low score, we recommend being careful providing credit and considering charging upfront payment or using credit insurance when trading if you don't know the customer in Hong Kong well. If possible, provide a short credit period or even better upfront payment. The medium-low risk score is based on the following factors:

Economic Risk:
3
Economic Risk:
3
Economic Risk:
3
Economic Risk:
3
Economic Risk:
3
Economic Risk:
3
Business Risk:
2
Business Risk:
2
Business Risk:
2
Business Risk:
2
Business Risk:
2
Business Risk:
2
Political Risk:
3
Political Risk:
3
Political Risk:
3
Political Risk:
3
Political Risk:
3
Political Risk:
3
Commercial Risk:
2
Commercial Risk:
2
Commercial Risk:
2
Commercial Risk:
2
Financing Risk:
2
Financing Risk:
2
Financing Risk:
2
Financing Risk:
2

The economic risk in Hong Kong

Our analysis shows that the economic risk in Hong Kong is medium (3 out of 6). An economic risk of 3 out of 6 is low in Asia.

GDP and economic growth are critical drivers for economic risk.
The GDP of Hong Kong is 368.14 bn. USD (2021), growing by 6.42% per year.

In terms of the size of its economy, Hong Kong ranks #39 out of 183 countries and has a large economy.

In terms of growth rate, it is ranked #56 out of 183 countries and is therefore considered a fast-growing economy.

GDP per capita is 49661 USD, ranking Hong Kong number #20 out of 183 countries. This means the purchasing power of citizens in Hong Kong is high compared to the rest of the world.

You can see a more detailed picture of GDP and economic growth in Hong Kong in the table below:

GDP and economic growthLatest value
Economic growth: the rate of change of real GDP6.42%
Gross Domestic Product, billions of U.S. dollars368.14
GDP per capita, current U.S. dollars49660.63
GDP per capita, Purchasing Power Parity60051.75

Another big impact for the risk score is the inflation rate and the interest rates. You can see a more detailed overview of monetary data points in Hong Kong in the table below:

Monetary KPI'sLatest value
Inflation: percent change in the Consumer Price Index1.6%
Business credit interest rate, percent5%

The inflation in Hong Kong was 1.6% in 2021 which is considered a very low inflation rate.

Looking at the interest rate for businesses, it is 5%.

The business environment risk in Hong Kong

Our analysis shows that the business environment risk in Hong Kong is low (2 out of 6), which is a low risk score in Asia.

Economic freedom and rights determine the business environment risk in a country. You can see the critical facts for Hong Kong in the table below:

Economic freedom indexLatest value

The political risk in Hong Kong

The political risk in Hong Kong is medium, with a score of 3/6. This is a relatively low political risk score in Asia.

The governance and political stability indicators are vital drivers for political risk. An overview of Hong Kong can be seen in the table below:

Governance and political stability indicators Latest value
Rule of law index (-2.5 weak; 2.5 strong)1.45
Government effectiveness index (-2.5 weak; 2.5 strong)1.53
Control of corruption (-2.5 weak; 2.5 strong)1.71
Political stability index (-2.5 weak; 2.5 strong)0.26
Corruption Perceptions Index, 100 = no corruption76
Shadow economy, percent of GDP12.39%

The rule of law index analyses to which extent agents have confidence in and abide by the rules of society, in particular the quality of contract enforcement, property rights, the quality of the courts, and the police's ability to enforce court orders.

When doing business in a country, the rule of law index is critical as it describes your ability to enforce commercial contracts.

In Hong Kong, the rule of law index is at 1.45 points, with the score going from -2.5 (weak) to 2.5 (strong). Hong Kong has, therefore, a very high rule of law index, which means you have a very good chance of enforcing your contracts. If your individual customers have good creditworthiness, you should therefore feel relatively safe when providing credit.

Other drivers for the medium political risks are the strong control of corruption, the weak political stability index, and the normal shadow economy that is 12.39% of Hong Kong's GDP.

The commercial risk in Hong Kong

In Hong Kong, the commercial risk score is 2/4, which in our model is a low score. This low commercial risk score is pretty average compared to the average in Asia.

The commercial risk is impacted by a country's international trade relationships. You can see some of the key facts for Hong Kong in the table below:

International trade and investment Latest value
Exports of goods and services as percent of GDP203.92%
Exports of goods and services, annual growth17%
Imports of goods and services as percent of GDP199.18%
Trade balance as percent of GDP4.74
Trade balance, billion USD17.8
Foreign exchange reserves, billion currency units496.87

Hong Kong has a foreign exchange reserve of 496.87 bn. USD.

Hong Kong has a positive trade balance of 4.74% of GDP. The implications of this is that Hong Kong imports fewer goods and services than the country exports.

The annual growth of exports of goods and services has been growing 17% annually - now 203.92% of GDP. Import of goods and services represents 199.18% of the GDP in Hong Kong.

The financing risk in Hong Kong

We have calculated the financing risk to be 2/4, which equals a low risk. A low financing risk score is relatively low for countries in Asia.

The country's banking system, efficiency, and stability influence the financing risk. You can find the critical facts for Hong Kong in the table below:

Banking system efficiency and stabilityLatest value
Interest rates on bank credit to the private sector5%
Real interest rate: Bank lending rate minus inflation4.46%
Index of legal rights for creditors and borrowers (0 = weak to 12 = strong)8
Credit information sharing index, 0 (low) - 8 (high)7

In Hong Kong, the credit information sharing index is 7 on a scale from 0 (low) to 8 (high). The consequence of that number, is that the access and quality of credit information available in Hong Kong is medium-high.

This makes it easy for you to understand the credit risk of your counterpart in Hong Kong. You should therefore be able to find a good local credit rating agency that can help you analyse the creditworthiness of your specific customers.

Your rights as a creditor are 8 out of 12 and, therefore, medium.

The low financing risk for creditors also impacts the medium interest rate in the private sector of 5%.

Debt Collection in Hong Kong: Frequently Asked Questions (FAQs)

How does debt collection work in Hong Kong?

Debt recovery in Hong Kong involves creditors seeking payment from debtors. Creditors can choose to collect the debt themselves or opt for third-party collection services. Payments in Hong Kong typically take 30 to 90 days, and Hong Kong courts are a reliable source for business disputes. Debt collection in Hong Kong involves several stages, including uploading the claim, amicable collection, evaluation, debt surveillance, legal collections, and debt enforcement. At XYZ Company, we offer hassle-free debt collection services to help businesses reclaim what's rightfully theirs.

What is the debt collection process in Hong Kong?

The debt collection process in Hong Kong generally involves three stages: pre-legal collection, legal debt collection, and debt enforcement. Pre-legal collection involves uploading your claim onto a debt collection company's website to get assistance. Legal debt collection involves sending reminders and negotiating an agreement that is fair for both sides. Debt enforcement involves going to bailiff's court if there is a court order or if the person who owes you money has admitted to owing you money. Debitura provides support and guidance for debt collection in Hong Kong.

What legal options exist for debt collection in Hong Kong?

In Hong Kong, if the debt is disputed, a civil lawsuit is required. Legal actions require a local lawyer. Debt enforcement and insolvency proceedings are also options. It is advisable to seek quotes from multiple lawyers for the best rate. The legal system in Hong Kong is efficient with an emphasis on mediation. District courts handle claims up to approximately EUR 325,000 while the High Court takes on larger commercial matters. Bankruptcy proceedings can be initiated on demand of the debtor or creditor with priority rules usually applied while distributing proceeds to creditors.

How much does debt collection cost in Hong Kong?

Debt collection costs in Hong Kong vary depending on the type of action required. At Debitura, our pre-legal collection follows a no-cure-no-pay model with a success fee between 10-20%. Legal actions cost varies case by case. Debitura can provide you with 3 quotes from the best debt collection lawyers in Hong Kong.

How long does debt collection take in Hong Kong?

The length of debt collection in Hong Kong varies from case to case, depending on factors such as the debtor's willingness to pay and the specifics of the case. Generally, if the issue can be resolved through the pre-legal phase, the process typically takes 3-6 months. However, if legal actions are necessary, it may take 12-18 months to collect the debt.