2024/25 Hong Kong Budget

Tax and industries viewpoints

  • Insight
  • 5 Minute Read
  • Feb 28 2024

Viewpoints from our tax leaders

The 2024/25 Budget gives impetus to drive Hong Kong’s next lap of growth

“In light of external challenges, the Financial Secretary is facing dual imperatives of invigorating the economy and fostering growth opportunities in key sectors. Looming in the background is the expectation to restore fiscal balance and ensure fiscal sustainability.

The Financial Secretary delivered this carefully laid out 2024/25 Budget that centred around revitalising the economy, fortifying our business environment and supporting our people.

Building on these new initiatives, we must band together to promote the positive aspects of Hong Kong and enable the city to flourish in this globally competitive economy. It is time to uphold the ‘can do’ spirit that defines Hong Kong.”

— Charles Lee, Managing Partner – Tax, PwC China

Propelling Hong Kong’s growth as a global family office hub

“We support the Government reviewing the family office tax concession and look forward to seeing the regime being further enhanced by (i) expanding the classes of specified assets eligible for the tax concession to cover alternative assets like virtual assets, wine, fine arts and collectibles; and (ii) relaxing the restrictions on interest income to qualify for the tax concession. Beyond the tax concession, the Government should also consider giving Hong Kong residency status to the principal family member in charge of a qualified family office and his/her immediate family members, which would encourage long-term commitment in Hong Kong.”

— Agnes Wong, PwC Hong Kong Private Clients and Family Office Services Tax Partner

Developing Hong Kong into an international innovation and technology (I&T) hub

“Innovation and technology continues to be an important way forward for Hong Kong to reposition its economy amidst a series of unprecedented global challenges. We welcome the Financial Secretary’s announcement regarding the upcoming legislative bill to implement the patent box regime, which offers a 5% concessionary tax rate on qualifying profits derived from research and development activities conducted within Hong Kong.

In addition to the various initiatives focusing on enhancing I&T infrastructure, research capacity and talent outlined in today’s Budget, we suggest that related tax measures should integrate with the strategies associated with Hetao. These holistic measures will synergistically reinforce each other, positioning Hong Kong to thrive as an international I&T hub.”

— Kenneth Wong, PwC Hong Kong Tax Partner


Consolidating Hong Kong’s status as a leading asset and wealth management hub

“We understand that the review of the existing tax concession regimes for investment funds, family office and carried interest is in good progress. We eagerly await further announcements and hope for favourable changes to the relevant regimes, including consideration of how private credit and virtual assets may play a part.

The city’s position as a wealth management hub for high-net-worth individuals in the GBA is poised to shine even brighter with the recent enhancements to the cross-boundary wealth management connect scheme.

We also look forward to the introduction of Insurance Connect to complete the Connect ecosystem. This is an important component in solidifying Hong Kong’s position as an insurance and risk management hub.”

— Rex Ho, PwC Asia Pacific Financial Services Tax Leader

Viewpoints from our industry leaders

“We welcome the Government’s announcement of a series of measures to improve market efficiency and promote stock market liquidity, as rolled out in the Budget 2024/25. These include strengthening promotion of Hong Kong’s securities market and deepening connectivity with the Middle East and ASEAN countries. This will help Hong Kong expand its investor base and increase attractiveness as a global fundraising centre. We are happy to see that the Budget has begun to explore measures to enhance the listing regime, improve the transaction mechanisms, boost investor services, step up market promotion, and further promote mutual market access by discussing with Mainland authorities over the introduction of block trading, the inclusion of RMB counters under Southbound Trading of Stock Connect, and the expansion of the mutual market access regime to cover Real Estate Investment Trusts (REITs). It is believed that the relevant measures can inject fresh impetus into Hong Kong’s economic growth and underscore its role as an established international financial centre.”

— Brian Choi, PwC China Capital Markets and Accounting Advisory Services Leader

“We are delighted to learn that the Government has further strengthened key pillars supporting Hong Kong’s role as an international financial centre, and will position Hong Kong as the financial risk management centre for China. The key measures introduced by the Government will further support the city to develop its equity and debt financing market. Leveraging the integration of cross border financial services will help institutions, as well as corporate and retail markets in Chinese Mainland, to position Hong Kong as a key driver for RMB globalisation and a fund raising gateway of the China market. Specific measures that are particularly relevant to the GBA integration include Wealth Management Connect 2.0, ETFs in Stock Connect and Swap Connect, Bond Connect, family offices initiatives, the new CIES and a Grant Scheme for Open-ended Funds and REITs. Additionally, insurance is an integral part of Hong Kong’s financial services market, and acts as the financial risk management centre for China. Consequently, the Government has introduced support that focuses on expanding and promoting our capabilities and market coverage in captive and specialty insurance to meet the rapidly increasing demands for insurance in Chinese Mainland.”

— Chris ST Chan, Financial Services Markets Leader, GBA Services, PwC Hong Kong

“We welcome the investment committed by the Government on AI including support for an AI Supercomputing Centre and a three‑year AI Subsidy Scheme to help local universities, research institutes and enterprises leverage the Centre's computing power. The Government, as an important stakeholder of the AI ecosystem, could lead by example by initiating responsible use of AI in the public sector. Further, initiatives that place Hong Kong as a data trading hub will be vital for driving further development of AI. Data trading can become a strategic industry in its own right, representing a new era for commercialisation of data and data-related services, complementing existing open data and spatial data sharing arrangements. For full optimisation, these AI and data initiatives should work in tandem to maximise Hong Kong’s competitive edge.”

— Albert Wong, PwC Hong Kong Public Sector Consulting Partner

“Infrastructure formed a key theme of today’s budget – both in terms of its pivotal role in promoting a recovery by attracting new investment into Innovation & Technology projects, and by stimulating the capital markets by committing to issue HKD95-135 billion of Green, Sustainable and Infrastructure Bonds annually. Spending on infrastructure will also rise by 17%, and as we expected, will focus on the Northern Metropolis. The wider portfolio of projects will be subject to a review of cost effectiveness. In our view, this presents a real opportunity to prioritise the delivery of projects to maximise social and economic prosperity. Housing and transboundary transport also dominated – with commitment to GBA connectivity and the sustainable development of Hong Kong airport. The removal of property cooling measures should also enhance the affordability of property-led infrastructure projects, by stimulating land sales.”

— Simon Booker, PwC Hong Kong Sustainable Urban Partner

“Digital technology continues to evolve rapidly. At the forefront, transformational advances, including Generative AI which are incredibly popular across all industries, rely on the GPU computing power of microelectronics. We are particularly impressed by the commitment of the Hong Kong Government in fostering investment and exerting efforts to expand Hong Kong’s role as an R&D hub in GBA for the ongoing development of microelectronics.

There are clear strategic and competitive advantages for Hong Kong playing the role. Not least, given its long held position as a gateway between China and the international arena. The cosmopolitan culture has helped attract people from all around the world to stay in here and work. There are outstanding tertiary education and research institutes in Hong Kong which align neatly with those in the GBA to generate added value to industry research. Furthermore, the internal stock exchange and private equity and venture capital companies provide startups and mature industry players with access to capital for expansion. We expect Hong Kong to have a lot to contribute towards China’s ongoing industry development.”

— Wilson Chow, PwC Global Technology, Media and Telecommunications Industry Leader and China Artificial Intelligence Leader

“The Budget coincides with Hong Kong Green Week, and incentives to promote a Green Future are evident across the economy, particularly in finance and transport. The Hong Kong Government is making good use of issuance of green bonds and implementing other green finance measures to retain Hong Kong’s role as a global green and sustainable finance centre. It is also initiating new collaboration such as with the Dubai Financial Services Authority on transition finance – highly relevant for Asian and Middle Eastern countries. The Budget focuses on shipping and aviation, allocating HKD65 million for incentives for improving carbon reduction ratings of Hong Kong registered ships and developing green-methanol bunkering facilities, in addition to encouraging the uptake of sustainable aviation fuels. These measures demonstrate the Government's commitment to enhancing Hong Kong's international competitiveness and addressing difficult challenges in the net zero transition. Long-term policy support will be necessary for tangible emission reductions, reinforcing the importance of continuity in future policy direction.”

— Lit Ping Low, PwC Asia Pacific Sustainability, Climate Change Partner

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