Hong Kong launches tax-break plan to strengthen role as a corporate treasury base The Hong Kong government has unveiled an action plan to broaden tax incentives and introduce a pre-approval mechanism aimed at attracting more companies to establish corporate treasury centres in the city, according to Secretary for Financial Services and the Treasury Christopher Hui Ching-yu. “This sets out our targeted actions to strengthen Hong Kong as a premier hub for multinational corporate treasury centres and an optimal platform for ‘bringing in and going global’, leveraging the city’s strengthen as a leading international financial centre,” Hui said on Tuesday. Tax is the central theme of the plan, which seeks a law change in the first half of next year to expand the scope of interest deductions eligible for the 50 per cent profit-tax concession introduced in 2016. The government also planned to introduce a pre-approval mechanism under which the Inland Revenue Department would grant approved corporate treasury centres favourable tax benefits for a renewable period, giving companies greater certainty, Hui said. Applications could begin next year if the Legistlative Council approved the proposal. Hui said the government would pursue more double-taxation agreements with major trading partners to prevent overseas companies using Hong Kong as a treasury base from being taxed twice. Promotion and talent training were also part of the package, he added. “The action plan aims to attract more multinational corporations to establish corporate treasury centres in Hong Kong and enable existing centres to scale up operations and fully leverage Hong Kong’s financial ecosystem,” Hui said. He unveiled the plan at the Corporate Treasury Centre Forum, co-organised by his bureau with the Inland Revenue Department, Hong Kong Monetary Authority and InvestHK, the government agency tasked with attracting foreign investment. “Hong Kong is ideal for mainland companies to set up corporate treasury centres because the city has the world’s largest offshore yuan trading centre, while its stock and bond markets make it easy to raise funds,” said Sean Sun, secretary general of the treasury centre committee of the Hong Kong Chinese Enterprises Association, which also co-organised the forum. Since 2016, the government has offered tax incentives to encourage mainland Chinese and international companies to establish corporate treasury centres in Hong Kong to manage international payments, invest excess liquidity and conduct risk management. Financial Secretary Paul Chan Mo-po, in his budget speech in February, outlined plans to reinforce Hong Kong’s role as a base for corporate treasury centres and to boost the city’s appeal as a platform for overseas expansion, framed under the slogan “bringing in and going global”. China Mobile Communications Group established its corporate treasury centre in Hong Kong in March 2024, serving as its global platform for managing capital and risk. The company also established an innovation research institute in the city the same year as part of its development strategy. The action plan marks the latest effort by the government to promote the city as a wealth management centre. Since 2023, authorities have introduced tax incentives and other measures to attract wealthy families to establish family offices in Hong Kong for succession planning, investment and art collections. Hong Kong overtook Switzerland as the world’s largest cross-border wealth hub, with US$2.95 trillion in cross-border wealth booked in the city last year, compared with US$2.94 trillion in Switzerland, according to Boston Consulting Group last month. Hui earlier said the government would also submit a law change proposal to the Legislative Council by the end of the month to exempt hedge fund and venture capital staff from salaries tax on performance fee income. Fund houses would not pay profit tax on such income under the proposal. It would also broaden tax exemptions to cover more products invested in by family offices and funds, including private credit, gold and other commodities, carbon credits, insurance-linked securities and certain digital assets. At present, only traditional investment products such as stocks and bonds qualify. https://www.scmp.com/business/banking-finance/article/3356511/hong-kong-launches-tax-break-plan-strengthen-role-corporate-treasury-base?pgtype=live (ICE HONG KONG)

Fonte notizia: South China Morning Post