Hong Kong's chief executive, Carrie Lam has used her maiden policy speech to unveil tax relief policies to increase its competitive edge.
"In the face of competition from other economies as well as the rise of protectionism in recent years, Hong Kong is facing increasingly grave challenges. We must develop a high value-added and diversified economy," Lam said.
During the speech made at the Legislative Council in Hong Kong yesterday (October 11 2017) Lam announced support for small and medium enterprises in the Asian financial hub by cutting company profits tax to 8.25 percent from 16.5 percent for the first HK$2 million ($256,000) of earnings. Earnings after that would be taxed at the current 16.5 percent. Only one enterprise nominated by each business group is eligible for the lower tax rate.
In a bid to encourage research and development investment Lam proposed a 300% tax deduction for the first $2 million eligible R&D expenditure, with the remainder at 200 per cent. She also said no less than $10 billion would be set aside as university research funding to encourage private companies to increase investment in R&D.
During her speech Lam allocated more resources to the Financial Services Development Council and said the Government will take the lead to issue green bonds in the coming financial year to encourage investors to finance their green projects through Hong Kong capital markets.
Lam spelt out assistance for creative industries by agreeing additional resources to the Hong Kong Design Centre to reinforce its status as a city of design excellence in Asia. There will also be a review of the Film Development Fund to promote the local film industry and nurture more professionals for film production or post-production.
Managing director of ILS World's Hong Kong office, Lilian Cheung said: "With its stable legal, political and regulatory environment and progressive approach to business Hong Kong is a preferred platform for those seeking a gateway into Asia. These new tax incentives show it is responsive to the market and further strengthens Hong Kong's position and offer."
Anyone who wants any more information about the advantages of doing business in Hong Kong should contact Lilian at firstname.lastname@example.org