Viewpoints from our tax leaders
“The latest estimated consolidated deficit of HK$87.2 billion for the fiscal year 2024/25 will further reduce Hong Kong’s fiscal reserves as of 31 March 2025 to HK$647.3 billion. Despite the challenges, the Financial Secretary has shrewdly prioritised maintaining stringent control over public spending and driving sustainable growth for enterprises in an increasingly uncertain business environment. Notably, key foci of the 2025/26 Budget include advancing Hong Kong’s strategic industries and nurturing sustainable growth that complements the national strategy through various tax and non-tax measures. These include introducing new tax regimes and enhancing existing ones, as well as attracting enterprises, capital and talent on all fronts. These initiatives aim to ensure the sustainable development of Hong Kong as an internationally competitive economy and foster a thriving business ecosystem.
To optimise convenience and benefit for the public and businesses, it is imperative that the government acts swiftly to effectively implement these initiatives.
Hong Kong should also continue to expand its tax treaty network. This will enhance Hong Kong's role as a super connector bridging the Chinese Mainland and global markets under the Belt and Road Initiative.”
— Jeremy Ngai, PwC South China (incl. Hong Kong SAR) Tax Leader
“We commend Hong Kong’s continuous efforts to enhance the competitiveness of the local stock market. Apart from the prior clarification by the SFC regarding the relevant regulatory requirements to facilitate private equity funds to list in Hong Kong, the Financial Secretary also proposes to reform the trading mechanism to ensure technical compatibility with the T+1 settlement cycle by the end of this year. To further attract capital inflows into Hong Kong’s capital market, we recommend that the Government waive the buy-side stamp duty to reduce transaction costs.”
“We welcome the earlier consultation on the enhancements to the preferential tax regimes for investment funds and carried interest. The industry is highly enthusiastic about these improvements and anticipates their swift implementation. Therefore, we urge the Government to implement these enhancements by 2025, to solidify Hong Kong's status as a premier asset and wealth management hub.”
— Rex Ho, PwC Asia Pacific Financial Services Tax Leader
“The Government has conducted an industry consultation on the proposed enhancements to the family office tax concession regime, for which we have provided various recommendations, including expanding the qualifying investment list for the tax concession to cover fine arts and collectibles. We also suggested introducing complementary non-tax measures, such as accelerating the granting of Hong Kong permanent resident status to members of family offices and streamlining the employment visa application process for foreign investment professionals. We hope the Government will give favourable consideration to our comments and expedite the implementation of enhancements to attract more overseas family offices to establish a presence in Hong Kong.”
“In addition to the range of enhancement measures that will take effect next month, we recommend aligning the qualifying investment list under the New Capital Investment Entrant Scheme (CIES) with that of the family office tax concession, as both initiatives share similar objectives. Further, investment in real estate is subject to a cap of HK$10 million when determining the applicant’s investment value under the CIES. We recommend that the Government raise the cap to HK$25 million to make the scheme more equitable and accessible to more investors.”
“Creating a commodity trading ecosystem in Hong Kong is vital to driving the development of maritime, logistics and related professional services. We welcome the Financial Secretary’s announcement that a preferential tax regime will soon be introduced in this regard to enhance Hong Kong’s appeal. Currently, various targeted industries can enjoy an 8.25% concessionary tax rate in Hong Kong. We are pleased that the Financial Secretary intends to consider providing similar tax concessions to commodity traders. By expanding the Talent List to include experienced professionals in commodities trading, as recently announced by the Government, this initiative will significantly narrow the gap between Hong Kong and other leading maritime jurisdictions.”
“We welcome the Financial Secretary’s proposal to enhance the ship leasing regime in response to changes in the latest international tax standards. This should alleviate some of the industry’s concerns, especially when certain jurisdictions have already implemented the global minimum tax rules with legislation also in progress in Hong Kong. We support the Financial Secretary’s proposal, which includes enhancements such as providing tax deductions on ship acquisition cost for ship lessors under an operating lease.”
“We are happy to see that the Government is making every effort to trawl for talent, indicating that it will not only invite top and leading talent to come to Hong Kong for development under the Quality Migrant Admission Scheme, but will also enhance the Admission Scheme for Mainland Talents and Professionals and the General Employment Policy by allowing young non‑degree talent with professional and technical qualifications and experience to come to Hong Kong to join skilled trades facing manpower shortages. We view attracting talent and retaining talent as equally important. Consequently, a further recommendation is to expand the functions of Hong Kong Talent Engage, especially regarding aligning talent with suitable employment and providing more personal assistance, such as helping with educational arrangements for newcomer’s children, to ensure a smooth transition and integration.”
— Agnes Wong, PwC South Private Clients and Family Office Tax Leader
“We welcome the indication by the Financial Secretary to our recommendation to review the relevant tax deduction arrangements related to the acquisition of intellectual property rights (IP), including lump sum licensing fees for acquiring the rights to use IP, and related expenses incurred on purchase of IP or the rights to use IP from associates, in response to our repeated recommendation. Additionally, we continue to recommend that the Government relax the tax deduction criteria for R&D expenditure. This will help further reduce the operating costs of high-tech enterprises, and facilitate the development of Hong Kong into an international innovation and technology hub as well as the development of IP trading.”
— Kenneth Wong, PwC Hong Kong Tax Controversy Services Leader
“In order to be a next generation international financial hub, it is essential for Hong Kong to take a leading role in the development of responsible and sustainable regulation in areas of emerging technology, such as digital assets and AI. From a policy perspective, we must ensure that the right balance is struck between risk and opportunity.”
— Peter Brewin, PwC Hong Kong Digital Assets Leader
Viewpoints from our industry leaders
“With Western generative AI (GenAI) models limiting access for Chinese users and import restrictions on high-computing chips, there were concerns that China's GenAI development might lag globally. However, the rise of local GenAI engines like DeepSeek, which rely less on high-powered chips, alleviates these worries, promising accelerated adoption across Chinese businesses. We support enhancing Hong Kong's role as a super connector leveraging its international trade infrastructure by developing GenAI use cases featuring both Chinese and Western technologies to market GenAI solutions globally.
Concurrently, the commitment to advancing Hong Kong's Low Altitude Economy (LAE) with drones is promising. The government should streamline the approval process for LAE Sandbox pilot projects and expedite legislation for advanced air mobility. Collaboration with Greater Bay Area (GBA) regulators can also foster cross-border logistics innovations using Hong Kong as a hub for LAE developments in the GBA.”
— Wilson Chow, PwC's Global Technology, Media and Telecommunications Industry Leader and China Artificial Intelligence Leader
“Net Zero is a key initiative in Hong Kong which aligns with the Double Carbon Goal of the Chinese Mainland. Achieving this goal will require development of innovative green technology, decarbonisation of the transportation system, and support from green finance. We support the array of tax incentives and subsidies provided to corporations to transform their value chains, as well as policies in talent development for accelerating the green journey. Professionals and those involved in the real economy will benefit from these policies, and we look forward to a more sustainable future in Hong Kong.”
— Loretta Fong, PwC China Sustainability Assurance Leader
“We welcome the Government's initiatives to promote new industrialisation and anticipate that the two-year Pilot Manufacturing and Production Line Upgrade Support Scheme (Manufacturing+) will play a pivotal role in encouraging enterprises, especially high-value SME manufacturers, to commence their smart manufacturing journey. This scheme is expected to facilitate access to professional guidance on fit-for-purpose technologies, thereby enhancing the confidence of these manufacturers in adopting technologies and fostering innovation in the sector.
The value of IPs has to be realised through commercialisation in services and products. It is vital for Hong Kong to continue to optimise and commercialise its IP repositories, especially those developed with the support of public resources. In complementing the proposed review of tax deduction arrangements for various expenditures related to IPs, this approach will enhance the economic potential of IPs and also strengthen Hong Kong's position as a leader in innovation and technology.”
— Albert Wong, PwC Hong Kong Public Sector Consulting Partner
“It was pleasing to see the Financial Secretary confirm the critical role played by infrastructure development in supporting economic growth of (approx.) 3% in 2025 and beyond. Consistent with our view, infrastructure was recognised as an 'investment in the future'.
The Northern Metropolis was recognised as an economic engine, although short-term financing challenges could be met through a greater focus on Public Private Partnerships and the potential re-zoning of commercial land to residential purposes. Our recent work to deliver key infrastructure projects in Hong Kong demonstrates that this is key to enhancing the long term financial viability of projects and unlock more private investment.
Land disposal initiatives also featured strongly. It is encouraging to see that the Government will unlock the commercial feasibility of these sites by funding enabling infrastructure and public facilities; largely supported by new bond issuance. This will, in turn, promote their viability and unlock more private investment through Public Private Partnership models.
Besides, the announced development of Hong Kong Park in Hetao Co-operation Zone with HKD3.7 billion earmarked to expedite Phase 1 infrastructure and public facilities and land parcels identified for private development proposals will also be conducive to the economic development for the Greater Bay Area including Hong Kong.”
— Simon Booker, Government and Infrastructure Partner, Asia Pacific, PwC Hong Kong
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