CE pledges to ensure SAR stays as a leading finance, trade hub
The government will work to maintain and consolidate Hong Kong’s role as an international center of finance, trade, commerce, as well as for maritime and aviation services, Chief Executive Carrie Lam Cheng Yuet-ngor said in her maiden Policy Address on Wednesday.
As a global hub, Hong Kong has so far concluded comprehensive avoidance of double taxation agreements (CDTAs) with 38 tax jurisdictions. It will seek to sign free-trade agreements (FTAs), investment promotion and protection agreements (IPPAs) and CDTAs with other economies. These include those along Belt and Road routes.
In November, Hong Kong will sign an FTA and IPPA with the Association of Southeast Asian Nations. The government also plans to set up an economic and trade office (ETO) in Thailand, which will be the third ETO representing Hong Kong in ASEAN.
Terence Chong Tai-leung, associate professor at the Department of Economics of the Chinese University of Hong Kong, agreed that ASEAN is important to Hong Kong’s economy as the city’s second-largest trading partner, coming only after the Chinese mainland.
However, Chong said Hong Kong should not just focus on ASEAN. “Hong Kong should expand its relations with other countries and regions along the Belt and Road routes,” he said.
In her speech, Lam also proposed that the profits tax rate for the first HK$2 million of profits of enterprises be lowered to 8.25 percent, or half of the standard profits tax rate. This would further enhance the city’s competitiveness.
“The tax deduction will be most appealing to foreign companies,” said Chong, who expects more international companies to move to Hong Kong as a result.
“This will definitely outpace other places, which will improve the business environment and eventually Hong Kong’s ranking in the global market.”
Lam also aims to enhance the convention and exhibition industry, with plans to build new venues to cater for large-scale conventions and exhibitions.
To maintain investors’ confidence, the city will strengthen risk prevention and the resilience of its financial system. This is to ensure the financial market mechanism meets international standards.
It will establish a policyholders’ protection scheme to provide policy holders with a safety net, so as to boost confidence in the insurance sector.
The Department of Justice will implement various initiatives to consolidate Hong Kong’s position as a center for international legal and dispute resolution services in the Asia Pacific. This is with a priority to boost efforts to promote its involvement in the Belt and Road Initiative and the Guangdong-Hong KongMacao Greater Bay Area.
The government is rolling out the legal hub program to attract more international legal services and dispute resolution institutions. The program will start providing office space in early 2019.
To consolidate Hong Kong’s status as a maritime and aviation center, the government will upgrade and expand the airport. It will also further develop the maritime industry.
Efforts will also be made to boost Hong Kong as a regional intellectual property trading center and encourage commercialization of intellectual property. This would allow creative industries to diversify further.
The government also sets a clear vision to press ahead with developing Hong Kong into a world-class tourism destination.
Hong Kong should expand its relations with other countries and regions along the Belt and Road routes.”
associate professor at the Department of Economics, the Chinese University of Hong Kong
The tax (profits tax for the first HK$2 million) deduction will be most appealing to foreign companies.”
associate professor at the Department of Economics, the Chinese University of Hong Kong