Medical Practice Sale Agreement (Hong Kong)
MEDICAL PRACTICE SALE AGREEMENT
Dated: [Agreement Date]
Vendor: [Vendor Name] (HKID/CRN: [Vendor HKID/CRN], MCHK No.: [Vendor MCHK No]), of [Vendor Address];
Purchaser: [Purchaser Name] (HKID/CRN: [Purchaser HKID/CRN], MCHK No.: [Purchaser MCHK No]).
1. THE CLINIC
1.1 The Vendor agrees to sell and the Purchaser agrees to purchase the [Clinic Type] known as "[Clinic Name]" located at [Clinic Address] (the "Clinic") as a going concern, together with all assets described in this Agreement.
1.2 Department of Health Licence No.: [DoH Licence No]. The Purchaser acknowledges that the DoH clinic licence is not transferable and must apply for a new licence under the Private Healthcare Facilities Ordinance (Cap. 633) before commencing practice at the Clinic.
2. ASSETS INCLUDED IN THE SALE
2.1 The sale includes the following assets: (a) the goodwill of the Clinic and the patient base; (b) all clinical equipment, furniture, and fixtures at the Clinic (as set out in the Equipment Schedule); (c) all pharmaceutical stock, consumables, and medical supplies at the Clinic (at cost, to be verified at completion); (d) the lease of the Clinic premises (subject to landlord's consent to assignment); (e) the Clinic's telephone numbers, website domain, and email addresses; and (f) patient records (subject to patient notification and PDPO compliance as set out in clause 4).
3. PURCHASE PRICE AND PAYMENT
3.1 The total purchase price is HK$[Total Purchase Price], allocated as follows:
Goodwill: HK$[Goodwill Price]
Clinical equipment and furniture: HK$[Equipment Price]
Pharmaceutical stock and consumables: HK$[Stock Price]
3.2 A deposit of HK$[Deposit] is payable on execution of this Agreement, with the balance payable on the Completion Date.
3.3 Target Completion Date: [Completion Date], subject to the Purchaser obtaining DoH clinic licence approval.
4. PATIENT RECORDS AND PDPO COMPLIANCE
4.1 The Vendor shall notify all patients of the impending change of ownership no later than 28 days before the Completion Date, in accordance with the Medical Council of Hong Kong's ethical guidelines and the Personal Data (Privacy) Ordinance (Cap. 486) (PDPO).
4.2 Patient notification shall inform patients of their right to: (a) consent to their records being transferred to the Purchaser; (b) redirect their records to another practitioner; or (c) collect their records directly from the Clinic.
4.3 Patient records shall be transferred securely and in accordance with the PDPO's Data Protection Principles. The Vendor indemnifies the Purchaser against any PDPO claims arising from the Vendor's handling of patient data before the Completion Date.
4.4 The Vendor shall retain copies of all patient records for the period required by the MCHK guidelines (minimum 7 years from last treatment date for adult patients).
5. STAFF
5.1 The parties acknowledge that there is no automatic statutory transfer of employment in Hong Kong. The Vendor shall give the required statutory notice under the Employment Ordinance (Cap. 57) to all employees and pay all accrued statutory entitlements (including annual leave and applicable long service payment or severance payment) as at the Completion Date.
5.2 The Purchaser shall offer employment to the following staff (as agreed between the parties and set out in the Staff Schedule). Acceptance of such offers is at the discretion of each employee.
5.3 All MPF (Mandatory Provident Fund) contributions due by the Vendor as employer must be paid up to date as at the Completion Date.
6. RESTRAINT OF TRADE
6.1 For a period of [Restraint Period] after the Completion Date, the Vendor shall not (whether as principal, partner, employee, consultant, or otherwise) practise medicine within a radius of [Restraint Radius] from the Clinic.
6.2 The parties acknowledge that this restraint is reasonable and necessary to protect the Purchaser's investment in the goodwill of the Clinic, having regard to the nature of doctor-patient relationships and the local character of general medical practice in Hong Kong.
7. CONDITIONS PRECEDENT
7.1 Completion is conditional upon: (a) the Purchaser receiving written confirmation from the Department of Health of the approval or in-principle approval of the Purchaser's application for a clinic licence under the Private Healthcare Facilities Ordinance (Cap. 633); (b) the Landlord's written consent to the assignment or sub-letting of the Clinic's lease to the Purchaser; and (c) no material adverse change in the Clinic's patient load, revenue, or compliance status before the Completion Date.
8. GOVERNING LAW
8.1 This Agreement is governed by the laws of the Hong Kong Special Administrative Region of the People's Republic of China. Disputes shall be resolved in the courts of Hong Kong.
IN WITNESS WHEREOF the parties have executed this Medical Practice Sale Agreement on the date first written above.
Vendor
________________
Signature
Purchaser
________________
Signature
What Is a Medical Practice Sale Agreement (Hong Kong)?
A Medical Practice Sale Agreement in Hong Kong records the price, assets, warranties, and completion terms agreed between buyer and seller.
The buyer of a Hong Kong medical practice must be a registered medical practitioner listed on the General Register or Specialist Register maintained by the Medical Council of Hong Kong under the Medical Registration Ordinance (Cap. 161). Operating a medical practice without registration is a criminal offence under Section 28 of Cap. 161. For dental practices, the buyer must be registered under the Dentists Registration Ordinance (Cap. 156) and the dental surgery must meet the standards required by the Department of Health.
If the practice operates from premises that require registration as a private healthcare facility — such as a private hospital, day procedure centre, or other regulated facility under the Private Healthcare Facilities Ordinance (Cap. 633) — the buyer must obtain the necessary registration or licence from the Department of Health before commencing operations. The regulatory transfer process can take several months, which must be factored into the completion timeline and any transitional arrangements.
The transfer of patient records is governed by the Personal Data (Privacy) Ordinance (Cap. 486). Data Protection Principle 3 of Cap. 486 restricts use of personal data (including medical records) to the purpose for which it was originally collected unless the data subject consents. Patients must be notified of the practice transfer and given the opportunity to object to the transfer of their records. The Medical Council of Hong Kong's Code of Professional Conduct requires practitioners to maintain patient confidentiality and continuity of care during practice transfers.
The Inland Revenue Ordinance (Cap. 112) has significant implications for how the purchase price is allocated between goodwill, tangible assets, and any lease premium — different categories attract different tax treatment. Section 16EA of the Inland Revenue Ordinance (Cap. 112) allows the buyer to claim deductions for capital expenditure on patent rights and know-how over five years. The sale of goodwill is generally not subject to Hong Kong Profits Tax for the seller, but the purchase price allocation determines the buyer's depreciation allowances for plant and equipment under Part VI of Cap. 112. Section 39E of Cap. 112 governs initial and annual allowances on medical equipment purchased as part of the practice acquisition. Hong Kong does not impose stamp duty on the sale of goodwill or movable property; however, stamp duty under the Stamp Duty Ordinance (Cap. 117) applies to the assignment of any leasehold interest in the practice premises. The Employment Ordinance (Cap. 57) governs the rights of staff who transfer with the practice, including continuity of service under Section 31 of Cap. 57. Forms-legal.com provides a free Hong Kong Medical Practice Sale Agreement template incorporating the requirements of Cap. 161, Cap. 486, and Cap. 633.
When Do You Need a Medical Practice Sale Agreement (Hong Kong)?
A Medical Practice Sale Agreement in Hong Kong is needed in every transaction involving the transfer of a medical or dental practice as a going concern — regardless of whether the transaction is structured as a sale of assets or a sale of shares in a practice company.
A retiring medical practitioner who has built a solo general practice — perhaps in a residential district such as Tuen Mun, Yuen Long, or Sha Tin, serving a loyal local patient base — needs the agreement to transfer the practice's goodwill and patient records to a successor practitioner, protect the value built over years of practice, and comply with Medical Council requirements for continuity of patient care during the transition.
A medical group or corporate healthcare operator — such as a private hospital group or a group practice network — acquiring an established solo practice to expand its network needs the agreement to document the acquisition of the practice's assets, address the non-compete and non-solicitation obligations of the seller, and manage the transition of the practice's employed staff under the Employment Ordinance (Cap. 57).
Partners in a medical partnership who wish to sell the partnership's practice — whether to an incoming partner, to a third-party buyer, or as part of a dissolution of the partnership — need the agreement to document the assets being transferred, the allocation of the purchase price between the partners, and the termination of any partnership agreement.
A dental practice sale under the Dentists Registration Ordinance (Cap. 156) follows the same structure as a medical practice sale but must additionally comply with the specific registration requirements for dental surgeries and the professional conduct standards of the Dental Council of Hong Kong.
A specialist practice — an ophthalmology clinic, an orthopaedic surgery centre, or a fertility clinic — with a Specialist Register listing under Cap. 161 commands a higher goodwill premium than a general practice. The agreement must address the transfer of specialist referral relationships and the seller's non-compete obligations in the specific specialist area within the agreed geographical radius in Hong Kong.
Practices located in commercially valuable positions — on the ground floor of an MTR station shopping concourse, within a residential development managed by a major property developer, or in a medical centre building such as those operated by Gleneagles, Hong Kong Adventist Hospital affiliates, or St Paul's Hospital group — often have a lease premium component in addition to the practice goodwill and asset value.
What to Include in Your Medical Practice Sale Agreement (Hong Kong)
A Hong Kong Medical Practice Sale Agreement should contain the following key elements to address the complex regulatory, professional, and commercial requirements of a medical practice transfer.
Parties and Registration: The seller's full legal name, HKID number, and Medical Council registration number (General Register or Specialist Register) under the Medical Registration Ordinance (Cap. 161); and the buyer's corresponding details. For dental practice sales, the relevant Dentists Registration Ordinance (Cap. 156) registration numbers. Verification that both parties hold valid, current professional registrations is a prerequisite to completion.
Assets Included in the Sale: A thorough list of all assets being transferred — (1) goodwill (including the practice name, patient base, referral relationships, and location advantage); (2) patient records (subject to the Personal Data (Privacy) Ordinance (Cap. 486) notification and consent process); (3) medical and dental equipment (identified by make, model, serial number, and agreed valuation — supported by an independent equipment valuation); (4) furniture, fixtures, and fittings; (5) consumable inventory (valued at cost at the date of completion); and (6) the practice name and any telephone numbers or domain names.
Purchase Price and Allocation: The total purchase price in HKD and its allocation between goodwill, tangible assets (plant and equipment), lease premium if any, and consumable inventory. The allocation has tax implications under the Inland Revenue Ordinance (Cap. 112) for both parties — the buyer may claim capital allowances on plant and equipment under Part VI of Cap. 112. No GST or VAT applies in Hong Kong.
Patient Records Transfer: The notification process — written notice to all current patients explaining that the practice is being sold and naming the incoming registered practitioner; the opt-out period (typically 30 days); the procedure for patients who object; and the transfer mechanics. Compliance with Data Protection Principle 3 of the Personal Data (Privacy) Ordinance (Cap. 486) and the Medical Council's Code of Professional Conduct is mandatory.
Premises Lease Assignment: If the practice operates from leased premises, the agreement must address the landlord's consent to lease assignment (required under the Conveyancing and Property Ordinance (Cap. 219) and the standard lease terms), stamp duty on the assignment under the Stamp Duty Ordinance (Cap. 117), any lease premium payable, and transitional arrangements if consent is delayed.
Staff Transfer: The position of employed reception staff, nurses, or allied health professionals — whether they transfer to the buyer on existing Employment Ordinance (Cap. 57) terms, including continuity of service and accrued benefits, or whether their employment terminates and they are offered new contracts by the buyer.
Restrictive Covenants: A non-compete covenant preventing the seller from practising within a defined radius (typically 1–3 km in Hong Kong's dense urban environment) for a defined period (typically 2–5 years); a non-solicitation covenant preventing the seller from approaching transferred patients; and a non-disparagement covenant. Hong Kong courts enforce restrictive covenants in business sale agreements more readily than in employment contracts, applying the restraint of trade reasonableness test.
Warranties: The seller's representations about the accuracy of the practice's financial records (revenue, expenses, and profitability for the preceding three years), regulatory compliance (no outstanding Medical Council disciplinary proceedings, no Department of Health enforcement notices), and the condition of equipment (all items in working order, no undisclosed defects).
Governing Law: Laws of the Hong Kong Special Administrative Region. Disputes may be referred to the Hong Kong International Arbitration Centre (HKIAC) or the courts of Hong Kong.
Forms-legal.com provides a free Hong Kong Medical Practice Sale Agreement template incorporating Cap. 161, Cap. 486, and Cap. 633 requirements.
Sources & Citations
Statutory citations link to official government sources.
- Medical Council of Hong Kong under the Medical Registration Ordinance (Cap. 161)HK official
- Dentists Registration Ordinance (Cap. 156)HK official
- Private Healthcare Facilities Ordinance (Cap. 633)HK official
- Personal Data (Privacy) Ordinance (Cap. 486)HK official
- The Inland Revenue Ordinance (Cap. 112)HK official
- Inland Revenue Ordinance (Cap. 112)HK official
- Stamp Duty Ordinance (Cap. 117)HK official
- The Employment Ordinance (Cap. 57)HK official
- Employment Ordinance (Cap. 57)HK official
- A dental practice sale under the Dentists Registration Ordinance (Cap. 156)HK official
- Register or Specialist Register) under the Medical Registration Ordinance (Cap. 161)HK official
- For dental practice sales, the relevant Dentists Registration Ordinance (Cap. 156)HK official
- The allocation has tax implications under the Inland Revenue Ordinance (Cap. 112)HK official
- Conveyancing and Property Ordinance (Cap. 219)HK official
Cite this page
Reference this free template in an article, syllabus, or research note:
Forms Legal. (2026). Medical Practice Sale Agreement (Hong Kong) (Hong Kong) [Legal document template]. Forms Legal. https://forms-legal.com/hong-kong/business/contracts/medical-practice-sale-agreement-hong-kong
"Medical Practice Sale Agreement (Hong Kong) (Hong Kong)." Forms Legal, 2026, https://forms-legal.com/hong-kong/business/contracts/medical-practice-sale-agreement-hong-kong.
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title = {Medical Practice Sale Agreement (Hong Kong) (Hong Kong)},
year = {2026},
howpublished = {\url{https://forms-legal.com/hong-kong/business/contracts/medical-practice-sale-agreement-hong-kong}},
note = {Free legal document template. Based on Medical Registration Ordinance (Cap. 161)}
}Also available for these jurisdictions:
Frequently Asked Questions
The sale of a medical practice in Hong Kong involves several regulatory considerations. The buyer must be a registered medical practitioner under the Medical Registration Ordinance (Cap. 161) — only persons listed on the General Register or the Specialist Register maintained by the Medical Council of Hong Kong may practise medicine in Hong Kong. The Medical Council must be notified of any change in the practitioner's practice address and arrangements.
If the practice operates from premises that hold a clinic licence, the registration under the Private Healthcare Facilities Ordinance (Cap. 633) must be transferred or a new application submitted by the buyer. The Department of Health oversees the registration of private healthcare facilities.
For dental practices, the buyer must be registered under the Dentists Registration Ordinance (Cap. 156) and the dental surgery must comply with the relevant Department of Health requirements.
If the practice employs other medical professionals, their employment must comply with the Employment Ordinance (Cap. 57) — staff may transfer with the practice under the common law principles of transfer of undertakings, and the agreement should address continuity of employment.
The Personal Data (Privacy) Ordinance (Cap. 486) governs the transfer of patient records — patients must be notified and given the opportunity to consent to the transfer of their medical records to the new practitioner. The Privacy Commissioner for Personal Data has issued guidance on the handling of personal health data in practice transfers.
The goodwill of a medical practice in Hong Kong is the intangible value attributable to the practice's reputation, patient base, referral relationships, and location. Valuation of medical practice goodwill in Hong Kong typically involves several approaches.
The earnings-based method calculates goodwill as a multiple of the practice's annual net profit or the seller's annual billings. For general practice in Hong Kong, goodwill is commonly valued at 1 to 3 times annual net profit. Specialist practices with strong referral networks and established reputations may command higher multiples.
The revenue-based method values goodwill as a percentage of the practice's annual gross revenue, typically 30% to 70% depending on the stability of the patient base and the practice's dependence on the departing practitioner.
The comparison method looks at recent sales of comparable medical practices in Hong Kong, though this data is limited in availability.
Factors that increase medical practice goodwill in Hong Kong include a prime location (Central, Tsim Sha Tsui, or major MTR station proximity), a large and loyal patient base, specialist registration and referral networks, long-established reputation, modern equipment and facilities, and a favourable lease term. Factors that reduce goodwill include high dependence on the departing practitioner's personal reputation, a short remaining lease term, ageing equipment, and increasing competition in the area.
Patient records are among the most sensitive assets in a medical practice sale and must be handled in strict compliance with the Personal Data (Privacy) Ordinance (Cap. 486) (PDPO). The PDPO's six Data Protection Principles govern the collection, use, retention, security, and transfer of personal data including medical records.
Data Protection Principle 3 (Use) restricts the use of personal data to the purpose for which it was collected or a directly related purpose. Patient medical records collected for the purpose of providing medical treatment to the patient may not be transferred to a new practitioner without the patient's consent unless the transfer falls within an exemption.
Best practice for a Hong Kong medical practice sale is: (1) the seller notifies all patients in writing (by letter or through the practice's usual communication channels) that the practice is being transferred to a named registered medical practitioner; (2) the notice explains that the patient's medical records will be transferred to the new practitioner unless the patient objects within a specified period (typically 30 days); (3) patients who object are given the option of having their records transferred to another practitioner of their choice or collecting their records in person; (4) records of patients who do not object are transferred to the buyer on completion of the sale.
Restrictive covenants in a Hong Kong medical practice sale agreement protect the buyer's investment in goodwill and are enforced by Hong Kong courts under common law restraint of trade principles. In business sale contexts — where the seller has received a purchase price for the practice's goodwill — courts are more willing to enforce restrictions than in employment contracts, because the seller has been compensated for giving up the right to compete.
Non-compete covenant: A clause preventing the seller from practising medicine or dentistry within a defined geographical radius — typically 1 to 3 kilometres in Hong Kong's densely populated urban environment — for 2 to 5 years after completion. The radius should reflect the actual patient catchment area; a general practice in Tuen Mun or Sha Tin has a different catchment than a specialist clinic in Central or Tsim Sha Tsui.
Non-solicitation covenant: A clause preventing the seller from approaching or accepting consultations from any patient who was a patient of the practice at the time of sale. The Medical Council of Hong Kong's Code of Professional Conduct imposes confidentiality obligations regarding patient details, which apply alongside the contractual restriction.
Non-disparagement covenant: A clause preventing the seller from making derogatory statements about the practice, the buyer, or the quality of care provided, which could damage the goodwill transferred. Hong Kong courts enforce reasonably scoped covenants that protect legitimate business interests purchased by the buyer.
The tax treatment of a Hong Kong medical practice sale depends critically on how the purchase price is allocated between different categories of assets, as each category is treated differently under the Inland Revenue Ordinance (Cap. 112).
Goodwill: The sale of goodwill by the seller is generally not subject to Hong Kong Profits Tax, as goodwill is a capital asset and Hong Kong does not tax capital gains. From the buyer's perspective, the amount allocated to goodwill is not deductible for Profits Tax purposes and cannot be depreciated — the buyer is making a capital investment that will be reflected in the value of the practice rather than providing a current tax deduction.
Medical equipment and fixtures: The purchase price allocated to plant, machinery, and fixtures is subject to the capital allowance regime under Part VI of Cap. 112. The buyer can claim an initial allowance (IA) of 60% of the qualifying expenditure in the year of purchase, plus an annual allowance (AA) on the reducing balance. This makes the allocation to tangible assets more tax-efficient for the buyer than allocation to goodwill.
Consumable inventory: The amount allocated to consumable inventory (medical supplies, drugs, consumables) is generally a revenue expense deductible by the buyer in computing their Profits Tax liability for the year of purchase, as the inventory is trading stock used in the course of the medical practice business.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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