Business boost for Hong Kong at heart of Carrie Lam’s first Policy Address

Carrie Lam, the Chief Executive of Hong Kong SAR, has used her maiden Policy Address to outline a suite of measures aimed at boosting business and investment in the city.

The Chief Executive’s speech included reference to tax breaks for small and medium enterprises and a HK$3 billion investment pot for student research and innovation.

Tax breaks

Introducing a number taxation changes, Mrs Lam said: “In order to further enhance the competitiveness of Hong Kong, we will demonstrate greater determination in our taxation policies.”

The Chief Executive, who will be speaking at Asia House’s Signature Conference in Hong Kong next month, proposed to halve taxation on profits up to HK$2million – bringing the rate down to 8.25 per cent.

“Profits above that amount will continue to be subject to the standard tax rate of 16.5 per cent,” she added.

“To ensure that the tax benefits will target small and medium enterprises, we will introduce restrictions such that each group of enterprises may only nominate one enterprise to benefit from the lower tax rate.”

Innovation

Fostering innovation is also a key aim for the Chief Executive, who outlined a 300 per cent tax deduction on companies’ first HK$2million of R&D expenditure.

Other initiatives to encourage innovation include HK$10billion investment in university research funding; a HK$500 million “Technology Talent Scheme” and HK$3billion committed to research studentships.

“Our aim is to encourage our young people to engage in research and product development,” she added.

Hong Kong will set aside HK$2 billion to match fund venture capitalists investing in local tech firms, while ‘green bonds’ will also seek to attract investment.

Read the full Policy Address here.