Non-disclosure Agreement (NDA)

A Non-Disclosure Agreement (NDA) is a legally binding contract used to protect sensitive, proprietary, or confidential information shared between parties. In Hong Kong, NDAs are essential in business contexts such as mergers, partnerships, employment, and joint ventures to prevent unauthorized use or disclosure of private information. These agreements foster trust and ensure that both parties understand their legal obligations regarding confidentiality.
NDAs in Hong Kong serve to legally secure intellectual property, trade secrets, financial data, and internal strategies. They provide a clear legal remedy if the Receiving Party breaches confidentiality, ensuring that business interests are protected throughout negotiations or collaborations, as supported by the Department of Justice website. Formalizing confidential discussions at the board level? Download the Minutes of Meeting to record and protect all NDA-related resolutions securely and in compliance with corporate governance standards.

A strong NDA should contain specific clauses to define the agreement’s scope and enforceability. In Hong Kong, the most critical NDA clauses include:

Each of these clauses strengthens the legal framework of the NDA, making it easier to enforce if breached. Including them helps align the agreement with best practices and typical expectations under Hong Kong contract law.

Yes, NDAs are enforceable under Hong Kong law if they meet basic contract principles: offer, acceptance, consideration, and legal intent. The NDA must define what information is protected and the scope and duration of the confidentiality obligation. Courts in Hong Kong have upheld NDAs when they are clear, specific, and reasonable.

An NDA may be partially or fully invalidated if it is overly broad, lacks clarity, or attempts to restrict basic rights unreasonably. Tailoring the NDA to the situation and local legal standards significantly increases its enforceability, as explained in Contract Law basics

Most NDAs in Hong Kong last between two and five years, depending on the sensitivity of the information. The agreement should explicitly state the duration of confidentiality.

It is common for NDAs to include a clause stating that confidentiality obligations continue for three (3) years after termination. This protects businesses from future misuse of confidential data, even after the relationship ends. Planning to assign authority to act on confidential matters? Download the Power of Attorney to legally delegate decision-making while safeguarding your information through an NDA.

A Hong Kong NDA can protect a wide range of information, including:

For the NDA to be enforceable, the confidential nature of the information must be clear either explicitly marked or reasonably expected to be confidential. Publicly available information or data lawfully obtained through independent means is not protected.

NDAs can be:

Using the correct type ensures that confidentiality obligations are fair and legally enforceable. Mutual NDAs are ideal for bilateral collaborations, while one-way NDAs suit simpler transactions.

Yes, NDAs in Hong Kong can and should include clauses protecting intellectual property rights and trade secrets. This includes patents, trademarks, software, technical processes, business know-how, and proprietary formulas.

The NDA must clarify that disclosure does not transfer ownership, which helps prevent the Receiving Party from using or misappropriating the Disclosing Party’s intellectual property, as outlined by the Intellectual Property Department of Hong Kong.

No, a standard NDA cannot prohibit an employee from working for a competitor. That would fall under a non-compete clause, which is regulated separately and is harder to enforce in Hong Kong. However, NDAs can prevent former employees from disclosing confidential company information to a competitor. This makes them an essential part of employment contracts involving access to sensitive business information.

If someone breaches an NDA in Hong Kong, the harmed party can pursue legal action, including:

To successfully enforce the NDA, it must contain a governing law clause stating that Hong Kong law applies. Including a dispute resolution mechanism (arbitration) can also make enforcement faster and more efficient.

For businesses operating in Hong Kong, having a well-drafted Non-Disclosure Agreement is essential to protect sensitive information, safeguard intellectual property, and establish legal recourse in case of breach. If you require assistance in drafting or reviewing your NDA, Themis Partner provides professionally tailored documents prepared by experienced legal experts. Download your Non-Disclosure Agreement today to ensure your confidentiality obligations are enforceable and compliant with Hong Kong law.