Hong Kong's 2024-25 budget has been officially announced. This year's budget proposes a number of measures to support enterprises and the public against the backdrop of a challenging global economic environment. Below is an in-depth analysis of the business-related policies in the budget.
I. Support Measures for SMEs
The budget continues the focus on SMEs with a range of targeted support measures:
- Profits tax relief: Increased caps on corporate profits tax relief to help SMEs ease their tax burden
- Business registration fee waiver: continue to waive business registration fees and reduce business operating costs
- Financing Guarantee Scheme: Optimize the SME Financing Guarantee Scheme to increase the guarantee ratio and loan ceiling
- Digital Grant: Launch of a dedicated grant program to support enterprise digital transformation
II. Tax Policy Adjustment
Salary tax refund
The budget proposes salaries tax and personal assessment tax refund measures to provide substantial tax relief for the working class and indirectly help reduce the pressure on enterprises' labor costs.
Stamp Duty Adjustment
There have been adjustments to the stamp duty policy for the real estate market, which will have a direct impact on business decisions involving property investments. Businesses need to re-evaluate their property investment strategies.
Offshore Passive Income Waiver
The budget refers to arrangements to further improve the offshore passive income exemption (FSIE) system, which is of great significance for multinational enterprises with Hong Kong as their regional headquarters and helps to consolidate Hong Kong's position as an international corporate hub.
III. Innovation and the Digital Economy
The Budget invests significant resources in advancing innovation and the digital economy:
- R&D grants: Increase funding for R&D activities and encourage companies to increase investment in innovation
- AI development: Grants to drive the adoption of AI technologies across industries
- Digital economy infrastructure: Invest in digital infrastructure such as data centers, 5G networks, etc.
- Life Health Technology: Continue to support R&D and industrialization in the field of life health technology
IV. Talent Introduction Measures
The Budget re-emphasises the importance of talent for Hong Kong's economic development:
- Continued implementation of the Premium Talent Pass program
- Optimize the approval process for various talent entry plans
- Increased support for international students and graduates to stay and work in Hong Kong
- Launched the Future Talent Development Fund
V. Regional Cooperation and the Belt and Road Initiative
The budget highlights the importance of regional cooperation:
- Continue to promote the construction of the Guangdong-Hong Kong-Macao Greater Bay Area
- Strengthening economic and trade cooperation with ASEAN countries
- Supporting enterprises to develop markets along the Belt and Road
- Strengthening Hong Kong's position as an international legal and dispute resolution service centre in the Asia-Pacific region
VI. corporate revelation
- Take advantage of tax incentives: understand and apply for tax exemptions in a timely manner to reduce operating costs
- Driving digital transformation: leveraging government funding to accelerate the pace of enterprise digitalization
- Focus on talent policies: Attract top talent with an optimized talent acquisition policy
- Expand regional markets: Expand your footprint with Greater Bay Area and Belt and Road opportunities
- Increase R&D investment: Improve corporate competitiveness with government R&D funding
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