Hong Kong Drug Licence Applications and Acquisitions · RGYS|Global Licensing and Compliance Service Provider
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HONG KONG DRUG LICENSING

If I plan to sell my company or seek a stock market listing in future, what aspects of financial planning should I consider from an early stage?

A complete explanation of the regulatory basis, Drew Tang’s recommendations and risk alerts. The original material dates from 2025; read it alongside the latest official requirements.

Original guide, 2025 edition: These FAQs are provided for topic-based reference and have not all been individually checked against current rules. Please confirm fees, personnel, renewal, changes and product requirements against the professional in-depth guide for the relevant licence type and the official requirements in force at the time.

Drug Office, Department of Health Chinese Medicines Board

Q298 · Category F: Fees, budgeting and financial planning (Q251–Q300)
If you have a long-term exit plan, such as being acquired or listing through an IPO, you must plan and manage your finances to the highest standards from the first day the company is established. Key points include: 1. “Clear and orderly accounts”: appoint a reputable accounting firm to ensure that every account is clear, compliant and able to withstand the most rigorous due diligence. 2. “Sound internal controls”: establish and enforce strict internal control procedures covering procurement, sales, inventory, financial approvals and all other areas. 3. “Impeccable compliance record”: maintain a clean record in all areas, including tax, employment and pharmaceutical regulation, with no material breaches. 4. “Clear shareholding structure”: avoid complex, opaque shareholding arrangements.

📘 Regulatory basis

Whether it is the buyer's lawyer in an acquisition or the sponsor and HKEX in an IPO, they will conduct extremely detailed due diligence on the target company's financial and compliance status. Any deficiency could become an obstacle to the transaction or even cause it to fail.

📗 Drew Tang's recommendations

We recommend that you “begin with the end in mind” from the outset. Even if your business is currently small, you should hold yourself to the standards of a company preparing for a public listing. Sound financial and governance structures are not just for a future exit; they also support the healthy development of your current business and risk control. This is an investment that can deliver long-term returns.

📕 Risk notice

If, in the early stages of the company’s development, there are numerous off-the-books transactions, tax irregularities or unclear related-party transactions, these “historical sins” will become major obstacles when seeking an exit in the future. Resolving these historical issues can be extremely costly or even impossible, ultimately causing you to miss the best time to exit.

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