A one-person workshop in Hong Kong has no single maker records rulebook to follow. Four separate obligations decide what ends up in the filing cabinet: tax records under the Inland Revenue Ordinance, licences attached to controlled imports, origin paperwork behind a preferential export claim, and the evidence trail a patent application depends on. One folder structure can carry all four, and building it before anyone asks is cheaper than rebuilding it after a client, a tester or an examiner does.
The tax file is the base layer
A Guide to Keeping Business Records, published by the Inland Revenue Department, explains the record keeping requirements of the Inland Revenue Ordinance. The ordinance requires sufficient records, kept in English or Chinese, so that assessable profits can be readily ascertained. Records have to be adequate, and the guide states that failing to keep them can result in a fine.
Businesses dealing in goods carry extra duties in the same guide. You must keep records that record and explain all sales transactions. The same applies to purchases and expenses, and to trading stock on hand. Assets need their own records, and the guide points to a fixed asset register for that. It also notes that the pamphlet is a guide to the law rather than a legal document.
Treat that list as the floor. It tells you what an assessor needs to see. Nothing in it asks which resin, alloy or pigment went into a part, and nothing in it will help you when a buyer asks which shipment the material in their order came from.
Five records per material input
For each material that ends up in a finished object, hold five things:
- The supplier's datasheet, saved as a PDF against the material name.
- The batch or lot code exactly as printed, photographed as well as typed.
- The supplier invoice or receipt, filed with the batch, not only with the month's accounts.
- The safety data sheet that arrived with the shipment.
- A short storage note covering where the material sits and how it is packed.
The tax file answers how much a material cost and how much stock is left. The batch file answers which shipment is inside a specific object. Only the second question still matters a year after the invoice has been filed away.
On safety data sheets, the official guidance used for this guide does not set out a Hong Kong retention rule aimed at small producers. Keep the sheet anyway. It documents composition and handling, and it is the first thing a workshop needs when a material behaves differently from the last delivery.
Imported material: keep the clearance paper with the batch
Customs clearance for imports and exports runs on a short list of documents. An import or export licence, or a removal permit, is required where one applies, to facilitate clearance. Goods under licensing control need that permission before the consignment arrives. Pesticides, for example, require an import licence obtained in advance from the Agriculture, Fisheries and Conservation Department, acting as delegated by the Trade and Industry Department. Explosives falling under the Munitions List need import licensing by the Trade and Industry Department with prior endorsement of the Mines Division, or of Create Hong Kong for pyrotechnic special effects materials. Rough diamonds need a Kimberley Process Certificate (Import) issued by the Trade and Industry Department before import.
Most workshop inputs sit outside those controls. Clearance still generates references worth keeping. Customs runs electronic clearance through the Air Cargo Clearance System for air cargo, the Trade Single Window for advance cargo information on trucks at land boundary control points, and the Electronic System for Cargo Manifests for ocean freight. Those references tie a specific consignment to a specific arrival date.
File the licence, where one was needed, the invoice, the packing list and the shipment reference together per consignment. Name the folder with the same date and supplier as the batch sheet, so the import paper and the material record resolve to the same object.
If you claim Hong Kong origin, the records reach further
Hong Kong and Australia have signed a free trade agreement, and Hong Kong-origin exports that meet the applicable preferential rules of origin and the agreement's other requirements can receive preferential treatment. The Trade and Industry Department circular on the agreement sets out the rules of origin, the documentary requirements and the record keeping requirements.
Under those record keeping requirements, the customs administration of Australia may verify a claim. Verification can take the form of written requests for information addressed to the exporter or producer, a request to the Customs and Excise Department of Hong Kong to assist in verifying origin, or a visit to the premises of the exporter or producer to observe facilities and production processes.
The origin arithmetic matters too. The build-down method works from the value of non-originating materials, including materials of undetermined origin, used in producing the good. Those calculations follow generally accepted accounting principles applicable in Hong Kong.
For a small workshop, that means a bill of materials with a column per line for supplier, origin status and value, plus the working behind any percentage you claim. Where a material's origin is unknown, record it as unknown. The method has a category for materials of undetermined origin, and a blank field is easier to defend than a label added later.
Prototype logs, and what the patent route actually asks for
The Intellectual Property Department's guidance on applying for a patent starts with novelty: a patentable invention must be new, and it advises a prior art search to check that it is. Among the documents in an application, the department singles out the specification as the most complex and important. It advises applicants to seek professional help from people with the necessary technical and legal skills.
Hong Kong has two standard patent routes. A standard patent (O) application goes through both formality and substantive examination, and the applicant must request substantive examination within three years of the filing date or the earliest priority date claimed, or the application is regarded as withdrawn. Examination from filing to grant normally takes at least two to three years. A standard patent (R) is granted on the basis of a prior grant by a designated patent office, which include the China National Intellectual Property Administration and the United Kingdom Patent Office. That application can be filed in English or Chinese, online or by lodging it with the Patents Registry.
None of those steps sets a format for prototype records. What a dated log does is answer a question that arrives late: what did this object look like, and what was in it, on a given date. One entry per build, numbered, listing the batch codes of the materials used, with a photo set that follows each change rather than only the finished sample. Test notes belong in the same entry, with the method, the date and the result written as they happened.
Testing and certification bodies in Hong Kong
HKQAA is a non-profit organisation established by the Hong Kong Government in 1989 that provides certification and assessment services to industry. The Hong Kong Society for Quality is a non-profit set up to promote awareness of quality needs, and its site lists free workshops for startups as part of a start-up funding project. SGS announced in February 2016 that it had acquired a 51 percent stake in The Lab (Asia) Ltd, a Hong Kong materials testing, inspection and consulting company serving construction, civil engineering, highways, airports and associated industries.
Fee levels and turnaround times for independent makers are not published in the material used for this guide, so any figure you hear is a quotation for a specific job rather than a market rate.
A working system for one bench
Twelve steps, done in this order the first time:
- Create six folders: materials, batches, prototypes, tests, ip, exports.
- Name every file with the date first, in YYYY-MM-DD form, then supplier, material and batch code.
- Fill in a material intake sheet on the day the parcel is opened.
- Photograph the packaging label before the carton is discarded.
- Save the datasheet and the safety data sheet beside the intake sheet.
- Attach the receipt or invoice to the same folder.
- Number each build and open one prototype log entry for it.
- Copy the batch codes of every material used into that entry.
- Write a test note after each test, with method and result.
- Add new equipment to the fixed asset register.
- Record origin status and value per material line in the bill of materials.
- Back up to cloud storage and to one offline drive at the end of each week.
The templates are ordinary: an intake sheet, a prototype log, a test note, a bill of materials. What makes them useful is the naming pattern, because a file called supplier, material, batch code with a date in front can be matched to a physical object years later.
One-page checklist
- Datasheet on file for every material in the product
- Batch or lot code recorded and photographed
- Supplier receipt or invoice attached to the batch
- Safety data sheet saved with the batch
- Import licence or removal permit filed, where one was required
- Shipment reference filed with the consignment
- Origin status and value recorded per material line
- Prototype log entry with version number and date
- Test notes with method and result
- Sales, purchase, expense and stock records complete for the tax file
- Fixed asset register updated for new equipment
Questions makers ask
Does Hong Kong require a small maker to keep material records?
Not under a maker-specific rule. The Inland Revenue Ordinance requires sufficient records, in English or Chinese, to enable assessable profits to be readily ascertained, and businesses dealing in goods must also record all sales transactions, purchases and expenses, trading stock and assets.
Which documents should I keep when a material is imported?
Customs lists an import or export licence, or a removal permit, where one is required to facilitate clearance. Goods under licensing control need that licence before the consignment arrives, including pesticides, listed explosives and rough diamonds. File it with the invoice and the shipment reference for that consignment.
Do prototype notebooks count as evidence for a patent application?
The Intellectual Property Department's guidance centres on novelty, a prior art search and the patent specification, which it calls the most complex and important document in the application. Dated prototype records help you reconstruct what existed and when. They do not replace the specification.
What can happen if a buyer questions a Hong Kong origin claim?
Under the record keeping requirements of the Hong Kong, China and Australia free trade agreement, the Australian customs administration may verify the claim, through written requests for information from the exporter or producer, a request to Hong Kong Customs and Excise to help verify origin, or a visit to the premises to observe facilities and production processes.
Can materials be tested in Hong Kong, and what does it cost?
HKQAA provides certification and assessment services, and The Lab (Asia) Ltd, majority-owned by SGS since 2016, provides materials testing and inspection for construction and civil engineering industries. Fee and turnaround figures for independent makers were not available in the sources used here.
Sources and dates
Inland Revenue Department, A Guide to Keeping Business Records, undated in the version used here; it describes itself as a guide to the law rather than a legal document.
Trade and Industry Department, circular on the Free Trade Agreement between Hong Kong, China and Australia, covering origin rules, documentary requirements and record keeping for Hong Kong-origin exports to Australia.
Hong Kong Customs and Excise Department, Import and Export Clearance; and Controlled Imports, covering licensing controls under the Import and Export Ordinance, Cap. 60.
Intellectual Property Department, Apply for a patent; and the Hong Kong regional IP trading centre page on applying for a standard patent, covering the standard patent (O) and (R) routes.
Hong Kong Society for Quality, About Us, carrying descriptions of HKSQ and of HKQAA, established in 1989.
SGS, announcement of the acquisition of a 51 percent stake in The Lab (Asia) Ltd, published in February 2016. This item is used as background on testing capability, not as current pricing information.