Holding Hong Kong Company Shares as a Canadian Resident: Which Form Do You Need to File?

The ownership threshold that determines which form applies

The dividing line is 10% equity ownership in the foreign corporation.

What the T1134 actually requires

The T1134 consists of two parts filed together: a Summary (one per reporting entity) and a Supplement (one per foreign affiliate). The Summary covers your identity and the overall organizational structure of your foreign affiliates. Each Supplement requires:

• The foreign affiliate's name, country of residence, and tax identification number
• Your equity percentage and cost amount of shares held
• The affiliate's financial statements (required if you own 20% or more of voting rights)
• The composition of the affiliate's income (active business income, FAPI, dividends)
• Details of any transactions between you and the affiliate
• Identification of any surplus balances

For a Hong Kong private company with active business operations, gathering this information typically requires the company's audited financial statements and cooperation from the company's accountants. Translation is not required — documents can be attached in their original language.

Common situations for Hong Kong immigrants

Situation 1 — Family holding company

A common pattern: parents in Hong Kong hold a private limited company that holds investment properties or a securities portfolio. You hold shares in this company as part of the family structure. Depending on your equity percentage, either T1134 (10%+) or T1135 (under 10%, if cost exceeds $100,000) applies. If the company earns passive income and you hold a controlled foreign affiliate interest, FAPI rules may attribute that income to you annually.

Situation 2 — Operating business

You hold shares in a Hong Kong operating company — a family business, professional firm, or trading company. If your equity is 10% or more, T1134 applies. Active business income of a foreign affiliate is generally not subject to FAPI — but the filing obligation remains, and failure to file T1134 carries the same penalties regardless of whether any Canadian tax is owing.

Situation 3 — Pre-immigration restructuring

The cost base you establish for your Hong Kong company shares on the date you become a Canadian tax resident determines your future capital gains exposure. If the company has appreciated significantly since the original purchase, establishing the correct fair market value at the date of entry — and documenting it contemporaneously — is critical. Errors in this step affect both T1134/T1135 reporting and future capital gains calculations.

Filing deadlines comparison

• T1135: Due April 30 (same as personal tax return for most individuals)
• T1134: Due October 31 (10 months after December 31 year-end)

Both forms are required annually for each year you hold the relevant interest. If you missed prior years, the Voluntary Disclosures Program (VDP) may be available to reduce penalties — provided CRA has not yet contacted you about the specific non-compliance.

Frequently asked questions

I hold 5% of my family's Hong Kong company. The shares are worth HKD $3 million. Which form do I file?

Your equity percentage is below 10%, so the company is not a foreign affiliate and T1134 does not apply. However, if the adjusted cost base of your shares exceeds CAD $100,000, T1135 applies. At current exchange rates, HKD $3 million is well above this threshold. You would report the shares on T1135 annually and report any dividends or other income from the company on your Canadian tax return.

I hold 100% of a Hong Kong holding company that owns investment properties. Do FAPI rules apply?

Yes. A wholly-owned Hong Kong holding company is a controlled foreign affiliate. If the company earns passive income — rental income from investment properties, interest, dividends from unrelated companies — that income is generally subject to FAPI rules and may be attributed to you and taxed in Canada in the year it is earned, even if no distribution is made. The interaction between FAPI, the Canada–Hong Kong Tax Arrangement, and your personal Canadian tax return requires careful analysis.

The shares I hold are in a dormant Hong Kong company with no activity. Do I still need to file T1134?

A dormant or inactive foreign affiliate may qualify for an exemption from filing the T1134 Supplement (but not the Summary) if: the total cost amount of your interest in that affiliate is less than CAD $100,000, and the affiliate had gross receipts of less than CAD $25,000 and assets with a total fair market value of no more than CAD $1,000,000 during its tax year. If these thresholds are exceeded, the full T1134 Supplement must be filed even for inactive companies.

I have not filed T1134 for several years. What are my options?

If CRA has not yet contacted you about the specific non-compliance, the Voluntary Disclosures Program (VDP) may allow you to come forward, file the missing T1134 returns, and significantly reduce penalties. For T1134 non-compliance, VDP can provide 100% penalty relief for unprompted disclosures. The look-back period covers all non-compliant years. Acting before CRA makes contact is the critical factor — once CRA initiates a review, VDP is no longer available.