Key facts
- Lawmakers support Hong Kong's proposed tax incentives for innovative companies.
- Many lawmakers believe the five-year tax concession period is too short.
- The government plans to offer preferential profits tax rates of 5% or 8.25%.
- The budget aims to attract major firms to establish headquarters or expand operations in Hong Kong.
- Hong Kong's economy grew 3.5% in 2025, with a projected GDP growth of 2.5%-3.5% for 2026.
- The Office for Attracting Strategic Enterprises has attracted over 100 strategic enterprises, with 76 establishing global or regional headquarters.
Hong Kong lawmakers have indicated their support for the government's proposed tax incentives aimed at attracting major innovative companies. However, a significant number of legislators expressed concern that the planned five-year period for these concessions is too short to effectively entice large firms to set up or expand their headquarters in the city.
Chief Executive John Lee Ka-chiu announced in his policy address that the government intends to introduce a bill offering preferential profits tax rates of either 5% or 8.25%, which represents half of the city's standard rate. This initiative is part of a broader strategy to bolster Hong Kong's position as a hub for innovation and finance.
The Hong Kong Budget 2026-27, delivered by Financial Secretary Paul Chan, highlighted a return to fiscal strength with a consolidated surplus of HK$2.9 billion for 2025-26, the first since 2021-22. The economy grew by 3.5% in 2025, and the government projects GDP growth between 2.5% and 3.5% for 2026. The Office for Attracting Strategic Enterprises has already attracted over 100 strategic enterprises, with 76 establishing global or regional headquarters, contributing approximately HK$60 billion in investment and creating 22,000 jobs.