By Clare Chang, Managing Director, Greater China
On 16 October 2024, Hong Kong Chief Executive John Lee outlined several key initiatives in his third Policy Address, setting forth Hong Kong’s strategic vision to enhance its role as a global leader in finance, trade and innovation.
By capitalising on the advantages of “One Country, Two Systems,” Hong Kong aims to strengthen its financial, shipping and trade sectors while fostering innovation and collaboration within the Greater Bay Area. With targeted investments, such as a $10 billion fund for strategic industries and new measures to attract international enterprises, the city is poised for sustainable growth.
In this article, taking each strategic initiative in turn, we highlight the key tax and business measures discussed in the Address.
International financial centre
- Deepen mutual market access and enrich offshore Renminbi (RMB) business
Hong Kong aims to strengthen its role as a leading offshore RMB hub by improving market access and infrastructure. This includes enhancing the Central Moneymarkets Unit and setting up a central clearing system for RMB bond repurchase transactions. The focus is on expanding RMB-denominated bond markets and boosting liquidity with innovative financing channels. - Further enhance Hong Kong’s status as an international asset and wealth management centre
With 2,700 single-family offices, Hong Kong strives to become the largest cross-boundary wealth management centre by 2028. Initiatives include collaborating with sovereign wealth funds and expanding tax concessions. The enhanced New Capital Investment Entrant Scheme now includes residential properties priced at $50 million or more.
International shipping centre
- Promote development of high value-added maritime services
Hong Kong will enhance its maritime services by offering tax concessions and talent development and attracting marine insurance businesses. This includes promoting existing tax benefits, encouraging maritime companies to establish presence, and expanding the Maritime and Aviation Training Fund to cover more courses.
International trade centre
- Build a high value-added supply chain service centre
Hong Kong aims to strengthen its supply chain services by attracting Mainland enterprises. This includes increasing export protection with the Hong Kong Export Credit Insurance Corporation’s indemnity percentage rising to 95% and promoting electronic trade financing through initiatives like Project Ensemble Sandbox.
Headquarters economy
- Promote development of a headquarters economy
The government seeks to attract strategic enterprises to establish headquarters in Hong Kong by simplifying re-domiciliation processes and extending visa validity for foreign staff to a maximum of five years. This will facilitate business continuity and encourage the internationalisation of Mainland enterprises.
International I&T centre
- Increase investment in information and technology (I&T) industries
A $10 billion fund will be established to drive investment in strategic sectors like AI and robotics. Additionally, $1.5 billion will be redeployed to support start-ups through the Innovation and Technology Venture Fund, enhancing Hong Kong’s tech ecosystem. - Attract International Start-up Accelerators to Establish a Presence in Hong Kong
The I&T Accelerator Pilot Scheme, with $180 million in funding, aims to attract start-up accelerators to Hong Kong, fostering a robust start-up ecosystem through matching subsidies up to $30 million.
Greater Bay Area (GBA) collaboration
- Leverage the strengths of the GBA to foster mutual capacity development
Hong Kong will enhance its role in the Greater Bay Area by promoting integrated development with Mainland cities. This involves improved connectivity, policy innovations, and coordinated development in technology and related industries.
All this and more
Beyond these core areas, the Policy Address also outlined measures to improve Hong Kong’s overall living environment, enhance public services, and support sustainable development. These efforts aim to create a more vibrant, inclusive and forward-thinking city, ensuring that Hong Kong remains competitive on the global stage.
To sum up, Chief Executive John Lee’s third Policy Address laid out a comprehensive strategy to strengthen Hong Kong’s position as a global leader in finance, trade and innovation. By enhancing infrastructure, attracting international talent and deepening integration with the Greater Bay Area, Hong Kong is poised to embrace future challenges and opportunities.
The initiatives reflect a balanced approach, leveraging existing strengths while embracing innovation and flexibility. The focus on collaboration and connectivity indicates a forward-thinking vision that aligns with global trends, presenting Hong Kong as a resilient and dynamic international city. This strategic direction will be crucial for maintaining momentum and achieving sustainable growth in the years to come.
How can IQ-EQ help?
We offer a comprehensive suite of services for investment firms, including family office support, trust and fund administration, accounting, corporate secretarial, regulatory compliance and reporting. We have a global network with offices in 25 jurisdictions and use industry-leading technology to deliver efficiency as well as ESG compliance.
Visit our dedicated IQ-EQ Hong Kong website to find out more and get in touch today.
About the author
Clare is IQ-EQ’s Managing Director for Greater China, based in Hong Kong. She has extensive experience across the Asian funds industry and prior to joining IQ-EQ was responsible for fundraising activities and investor relations as Executive Director and Head of Capital Markets for special situation strategies at COS Capital, China Orient Asset Management’s real estate private equity fund manager.
