Hong Kong will capitalise on the opportunities arising from the national Belt and Road Initiative and the Guangdong-Hong Kong-Macao Bay Area development proactively and holistically. The government shall play the role of a “facilitator” and “promoter”.
Key economic initiatives announced in the 2022 Policy Address include:
Attract enterprises, investment and talent
- New Office for Attracting Strategic Enterprises, offering special facilitation measures and services
- Establish the HK$30 billion Co-Investment Fund to attract enterprises to Hong Kong and invest in their business
- Set up Talents Service Unit to enhance recruitment and support for talents from outside Hong Kong
- Dedicated Teams to be set up in Mainland Offices and overseas Economic and Trade Offices to reach out to enterprises and talents
- Launch Top Talent Pass Scheme to widely entice top-notch talents to Hong Kong
Create impetus for growth
- Attract not less than 100 high-potential I&T enterprises to set up operations in next five years
- $10 billion Scheme to support commercialisation of R&D outcomes by university research teams
- Amend the legislation to facilitate expansion of 5G network
- Facilitate fund-raising of pre-profit advanced technology enterprises on Main Board of HKEX
- Promote the launch of more Renminbi-denominated investment tools
- Further strengthen cross-boundary mutual market access
- Tax concession to attract family offices to set up or expand operations in Hong Kong
- Launch a new HK$1.4 billion scheme to support the convention and exhibition industry in staging over 200 exhibitions over three years
- Invest over HK$100 billion (US$12.8 billion) annually on capital works over next few years
Healthy and vibrant city
- Revamp healthcare system to focus on prevention and early treatment; set up the Primary Healthcare Authority
- Commissioner for Chinese Medicine (CM) Development to strengthen development of CM
- Develop a “Round-the-Island Trail” of about 60km on Hong Kong Island
- Promote urban sports and explore eco-tourism opportunities
- 10-year development blueprint to provide about 30 diversified sports and recreation facilities
- Enhance the “M” Mark System to support major international sports events
- New Mega Arts and Cultural Events Fund to support international arts and cultural events
- Promote Hong Kong’s pop culture globally through film, TV and streaming platforms
- 10-year development blueprint for arts and cultural facilities
Key initiatives announced in the 2022-23 Budget include:
- Provide recurrent provision of around $90 million to InvestHK to strengthen its work on investment promotion
- Organise a high-level Global Financial Leaders’ Investment Summit in Hong Kong, inviting representatives of Mainland and international financial institutions to attend to learn more about the unique advantages and investment environment of Hong Kong
Relieving People’s Hardship
- Issue $10,000 electronic consumption vouchers to each eligible Hong Kong permanent resident and new arrival aged 18 or above
- Tax Deduction for domestic rental expenses subject to a deduction ceiling of $100,000 for a year of assessment from the year of assessment 2022/23
- 100% Personal Loan Guarantee Scheme for Individuals
- Prohibit landlords from terminating the tenancy of or not providing services to tenants of specified sectors for failing to settle rents on schedule, or taking relevant legal actions against them. Valid for three months, the legislation automatically lapsing after three months
- Special 100% Loan Guarantee for Enterprises and increase the maximum loan amount to 27 months of employee wages and rents, with the loan ceiling raised to $9 million
- Reduce profits tax for the year of assessment 2021/22 by 100%, subject to a ceiling of $10,000
- Provide rates concession for non-domestic properties for 2022/23, subject to a ceiling of $5,000 per quarter in the first two quarters and a ceiling of $2,000 per quarter in the remaining two quarters
- Waive the business registration fees for 2022/23
- Continue to waive 75% of water and sewage charges payable by non-domestic households for eight months, subject to a monthly ceiling of $20,000 and $12,500 respectively
- Extend the waivers/concessions of the existing 34 groups of government fees and charges for 12 months
- Continue to grant the 75% rental/fee concession to eligible tenants of government premises/short-term tenancies and waivers for six months (100% concession for those closed at the Government’s request)
Innovation and Technology
- Increase the funding allocated to the Hong Kong Growth Portfolio under the Future Fund set up a $5 billion Strategic Tech Fund to invest in technology enterprises and projects which are of strategic value to Hong Kong
- Earmark $10 billion to further promote the development of life and health technology
- Double the subsidy amount to $440 million to strengthen support to the R&D activities of 16 State Key Laboratories and six Hong Kong Branches of Chinese National Engineering Research Centres in Hong Kong
- Double the subsidy amount under the Technology Startup Support Scheme for Universities to $16 million
- Set up a Digital Economy Development Committee to accelerate the progress of digital economy
- Earmark $600 million to conduct a comprehensive e-government audit
- Increase the funding allocated to the Hong Kong Growth Portfolio under the Future Fund to set up a $5 billion GBA Investment Fund to focus on investment opportunities in the Guangdong-Hong Kong-Macao Greater Bay Area (“GBA”)
- Plan to issue no less than $15 billion of inflation-linked retail bonds (iBond), no less than $35 billion of Silver Bond and no less than $10 billion of retail green bonds in the next financial year
- Explore ways to enhance the prospectus requirements, in order to make it easier for retail investors to participate in bond market
- Examine the revision of the listing requirements to meet the fundraising needs of technology enterprises
- Make preparation to allow stocks traded via the Southbound Trading of Stock Connect to be denominated in RMB
- Explore enhancement measures for the Cross-boundary Wealth Management Connect Scheme in the GBA
- Propose to provide tax concessions for the eligible family investment management entities managed by single-family offices
- Continue to issue green bonds totalling about US$4.5 billion or equivalent, and enhance the Green and Sustainable Finance Grant Scheme
- Implement a pilot scheme on infrastructure financing securitisation to offer infrastructure financing securitisation products with a total value of US$450 million
- Allocate $10 million for launching a new round of the Fintech Proof-of-Concept Subsidy Scheme
- Explore the introduction of more commercial data sources to the Commercial Data Interchange
Arts and Culture
- Allocate $42 million for organising the Hong Kong Performing Arts Market designed for the performing arts industry
- Allocate $40 million to facilitate the application and development of arts technology
- Earmark $1.26 billion to support and develop the tourism industry, including to provide incentives to develop and launch tourism products, sponsor the training of practitioners, and support the work of the Hong Kong Tourism Board to revive the tourism industry
- Allocate $135 million to the Hong Kong Trade Development Council for the introduction of the Support Scheme for Pursuing Development in the Mainland to facilitate Hong Kong people and entrepreneurs in seizing opportunities in the Mainland
Aviation and Maritime
- Continue to develop sea-air cargo transhipment between the Hong Kong International Airport and the rest of the GBA
- Explore concrete proposals to promote the development of “Smart Port” and propose to provide half-tax concession to attract more maritime enterprises to establish a presence in Hong Kong
Agriculture and Fisheries
- Inject $1 billion to launch pilot schemes to support the development of the industry by adopting new technologies
The Government of Hong Kong SAR is also committed to driving local business through a variety of initiatives. For details of government funding schemes, please visit here.
Hong Kong enjoys an ideal location in Asia that enables businesses to tap into the multitude of opportunities in the Guangdong-Hong Kong-Macao Bay Area and throughout the rest of the region.
The Perfect Business Base
With all of Asia’s key markets less than four hours’ away, it is easy to see why over 9,000 businesses and companies have made Hong Kong their home. Many have placed their strategic functions, including sales, operations, research and development (R&D), distribution, regional headquarters and corporate treasury centres in the city. Over 100 airlines offer easy and efficient travel to 190 locations from Hong Kong whilst half of the world’s population can be reached within five hours by plane.
The Belt and Road Initiative is set to link Mainland China with countries across Asia, Europe and the Middle East. As an international finance centre, Hong Kong’s independent legal system, rule of law, free flow of information and capital, and sound regulatory regime, put it in a prime position to help businesses make the most out of the Belt and Road.
Another opportunity arises from the Guangdong-Hong Kong-Macao Bay Area (GBA) . The economic integration will combine the expertise of more than ten cities throughout the region to create a world-class city cluster. Hong Kong will play a key role in ensuring the city cluster is internationally competitive, making it the ideal location for businesses and companies to reap the benefits of the city cluster.
Another benefit of setting up business in Hong Kong is its free trade policy. The city’s free port status and easy customs procedures makes it easier for businesses and companies to operate.
Trade and Economic Ties
To secure favourable conditions for exports of goods and services from Hong Kong to the Mainland and international markets, Hong Kong government endeavours to enter into more Hong Kong's Free Trade Agreements with the trading partners. The Economic and Trade Offices (ETOs) set up by the HKSAR Government in Mainland China and overseas will further promote economic ties and exchanges with Belt and Road countries.
So far, Hong Kong has forged eight Hong Kong's Free Trade Agreements, respectively with the Mainland of China, New Zealand, the Member States of the European Free Trade Association (EFTA), Chile, Macao, the Association of Southeast Asia Nations (ASEAN), Georgia and Australia. FTA negotiation has also begun with other trading partners. FTA negotiation has also begun with other trading partners. Hong Kong has so far signed Investment Promotion and Protection Agreements with 20 economies and has concluded negotiations with Bahrain, Mexico, Myanmar and the United Arab Emirates. Negotiations will commence or continue with other Belt and Road countries.
A Leading Financial Centre
Hong Kong has long been the region’s leading financial hub. It offers a highly transparent and robust regulatory regime for financial services industries such as banking, securities and futures, insurance and retirement schemes. These industries adhere to the best global practices and standards, giving confidence to everyone looking to do business in Hong Kong.
The city is also home to the world’s largest offshore hub in Renminbi settlement. Businesses can easily enjoy a wide variety of Renminbi services on offer from banks and financial institutions.
Stock Connect and Bond Connect have launched in Hong Kong. They have given investors in Hong Kong direct access to Mainland China whilst further cementing the city’s status as an international finance centre. The relevant authorities are expediting the implementation of the Wealth Management Connect under which residents in Hong Kong, Macao and nine cities in Guangdong Province could carry out cross-boundary investment in wealth management products distributed by banks in the Guangdong-Hong Kong-Macao Greater Bay Area.
Hong Kong Monetary Authority issued virtual bank licences to eight virtual banks so far, and all have already officially opened. Insurance Authority has also issued four virtual insurer authorisations.
Businesses and individuals in Hong Kong enjoy one of the most tax-friendly systems in the world. Only three direct taxes are imposed and there are generous allowances and deductions which can reduce your taxable amount.
The three taxes are:
- Profits tax for the first HK$2 million of profits of corporations is 8.25 percent. Profits above that amount will be subject to the tax rate of 16.5 percent. For unincorporated business (i.e. partnerships and sole proprietorships), the two-tiered tax rates will correspondingly be set at 7.5 percent and 15 percent.
- Salaries tax with standard rate of 15 percent
- Property tax of 15 percent
Here are the taxes which Hong Kong does not impose:
- No sales tax or VAT
- No withholding tax on dividents and interest
- No capital gains tax
- No tax on dividends
- No estate tax
Free Trade Port
Another benefit of setting up business in Hong Kong is its free trade policy. The city’s free port status and easy customs procedures make it easier for businesses and companies to operate.
Hong Kong is home to a diverse talent pool, equipped with the skills and knowledge to drive business in Hong Kong and beyond.
A Multi-lingual Location
Newcomers to Hong Kong will find that language is rarely an issue with most locals being either bilingual or trilingual. Many business professionals can speak English and Cantonese (Hong Kong’s most widely spoken language), a lot of people may also speak Mandarin (Mainland China’s official language).
Top Educational Foundation
Hong Kong is home to 22 degree-awarding higher education institutions. Currently four Hong Kong universities are featured in the Quacquarelli Symonds (QS) World University Rankings top 100 list, demonstrating the high quality of our education system.
With liberal immigration policies, a vibrant cosmopolitan lifestyle and abundant opportunities for career advancement, Hong Kong offers attractive prospects for professionals and experts from around the world. Various talent admission schemes are in place to attract talent and drive Hong Kong’s development as a high value-added and diversified economy.
To attract high quality world talents, the Talent List of Hong Kong identifying 13 specific professions in demand in Hong Kong.
Hong Kong has always maintained an open business environment for business activities and commerce.
One Country, Two Systems
Hong Kong has maintained its own currency, political and legal systems. This has allowed the city to continue to flourish as an international business city whilst enjoying the benefits of unrivalled access to opportunities in Mainland China.
Some of the benefits of One Country, Two Systems include:
- No foreign ownership restrictions
- English and Chinese as official languages with English the preferred language for business and contracts
- Free movement of capital, talent, goods and information
- Independent participation in international forums
World’s Most Competitive Economy
Hong Kong has been recognised as one of the world’s most competitive economy. The International Institute for Management Development (IMD) World Competitive Yearbook 2022 ranked Hong Kong 5th out of 63 economies.
The ranking reflects the consistent strides Hong Kong has made in building a favourable business environment. IMD assessed the economy across four competitiveness factors; economic performance, government efficiency, business efficiency and infrastructure. Hong Kong continued to rank favourably in "Government efficiency" and "Business efficiency", and our rankings in "Economic performance" and "Infrastructure” also improved. As regards the sub-factors, Hong Kong continued to top the ranking in "Business legislation", and was amongst the top-three in "Public finance", "Tax policy" and "International investment".
Strong Intellectual Property Protection
The Government of Hong Kong SAR has specific policies and legal protection in place for intellectual property rights. The city’s intellectual property laws have been developed to reach the highest international standards to create a free and fair business environment.
Hong Kong is a global city that has attracted people from all corners of the globe. Many are drawn to Hong Kong thanks to its compact size, vibrant lifestyle, beautiful scenery and welcoming international community. The city’s business community is no different, allowing businesses of all types to thrive in the city’s cosmopolitan surroundings.
A Global Foodie Feast
The variety of food on offer in Hong Kong is one of the best in the world. With thousands of options from street-side food stalls to Michelin star restaurants, there’s something for everyone in Hong Kong. Options are not only plentiful but also diverse, with a wide array of cuisines available for Hong Kong’s international community.
No Language Barriers
Don’t worry if you don’t speak Cantonese – English is one of the city’s official languages along with Cantonese. All of Hong Kong’s signs and transport networks are bilingual in English and Chinese . Many locals are also fluent in Mandarin.
A Nature-filled City
You wouldn’t know it by looking at the towering skyscrapers and bright lights of Hong Kong, but the city is home to beautiful beaches and endless hiking trails. One only has to make a short journey away from the city to discover a completely different side to Hong Kong filled with nature and wildlife. Although Hong Kong is one of the world's largest metropolis, three-quarters of the 1,108 square kilometres of land is countryside.
Those with children will be happy to know that Hong Kong has over 50 international schools offering different international curricula. From kindergarten all the way to university, an international level of education is available to those seeking to maintain the educational consistency of their home country.
Hong Kong is listed as one of the safest countries in the world by different publications and organisations. The city is a relatively crime-free society where people rarely fear for their personal safety.
Hong Kong enjoys some of the most advanced business infrastructures in the world. Businesses and companies can take advantage of the leading business infrastructures in place to maximise their opportunities throughout the region.
The multi-award winning Hong Kong International Airport is the world’s busiest cargo gateway and one of the busiest passenger airports. Getting between the city and the airport only takes 23 minutes via the Airport Express and in-town check-in is available for those seeking maximum convenience. A Three-Runway System is being constructed to meet anticipated air traffic demand at least up to 2030.
Convenient Public Transport
Hong Kong is one of the easiest cities to travel around thanks to its abundance of low-cost public transport options. With one of the world’s most reliable and efficient transport systems, commuters can choose from buses, ferries, taxis, trains and trams to reach their destination. Whether meeting clients or travelling to work, Hong Kong’s transport system has created a truly connected city that businesses can benefit from.
Complete Internet Coverage
Businesses can enjoy reliable and secure communications throughout the territory. With the city having made great investments in its broadband and fiber-optic infrastructure, everyone is able to reap the benefits of a reliable, high-speed internet connection.
World Leading Logistics
Hong Kong has long been one of the world’s leading sea and air cargo hubs. Advanced port and air cargo facilities has ensured Hong Kong’s place as one of the largest trading entities in the world whilst also servicing a large portion of cargo in and out of Mainland China.
Express Rail Link
The Guangzhou-Shenzhen-Hong Kong Express Rail Link runs from the terminus at Hong Kong West Kowloon Station to the Shenzhen boundary in 14 minutes and shortens travelling time to Guangzhou to 46 minutes.
Hong Kong-Zhuhai-Macao Bridge
The 55km-long bridge is the longest bridge-tunnel sea crossing in the world. It connect Guangdong, Hong Kong and Macao and brings the Western Pearl River Delta region to within a three-hour drive of Hong Kong.