The Hong Kong Budget 2023: What you need to know to launch a business
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Hong Kong is a popular destination for foreign investors. It offers many benefits, such as its low tax rates on income earned overseas and its strategic location. But there is more. The Hong Kong budget 2023 has revealed new plans to help foreign investors start or grow their businesses in Hong Kong.
In this article, we will explain what these programs are and how they can help foreign investors with their business in Hong Kong.
The Hong Kong Budget 2023 was announced on Feb 22 by The Financial Secretary. The budget provides a number of initiatives that can provide financial incentives and support for foreign businesses.
Initiative 1# SME Financing Guarantee Scheme (SFGS)
The SME Financing Guarantee Scheme (SFGS) aims to address the financing challenges faced by SMEs and create an enabling environment for foreign businesses.
The following are its key features.
- Extension of the application period
The government has extended the application period for the SFGS until March 2024, which gives you more flexibility and time to prepare your application and secure the financing you need for your business.
- Direct contact with participating lenders
To apply for the SFGS, investors can directly contact the participating lenders. and submit your application and supporting documents. These documents include a business plan, company incorporation documents, financial statements, credit reports, and proof of address. The Hong Kong Mortgage Corporation Insurance Limited (HKMCI) will assess your eligibility and approve the guarantee for your loan.
Initiative #2 Tax measures proposed to support enterprises
Hong Kong is renowned for its low taxes, especially when compared to European countries. This advantage is further extended in the budget. The government has announced tax cuts and concessions that can help investors save money and grow their businesses.
- Tax cut on profits
For the year 2022-23, investors can enjoy a 100% tax reduction on their profits, up to HK$6,000. This means that investors can retain more of their earnings in their business.
- Lower rates for commercial properties
For the first two quarters of the 2023-24 financial year, investors can benefit from a rate concession for their commercial properties, up to HK$1,000 per quarter for each property. This means that investors can reduce their property expenses by up to HK$2,000 per property in a year.
- Rental or fee concession for eligible tenants
Starting from July 2023, eligible tenants of government premises can receive a 50% rental or fee concession for six months, until the end of 2023. This means that tenants can lower their rental or fee obligations by half for half a year.
- Global effective taxation
The government has decided to adopt the global minimum effective tax rate of 15% for MNE groups with global revenues exceeding EUR 750 million. This means that these MNE groups are required to pay at least 15% tax on their profits, whether earned in Hong Kong or elsewhere.
Initiative #3 Hong Kong Trade Development Council (HKTDC) assistance
The Hong Kong Trade Development Council (HKTDC) provides a range of programs to support foreign investors who want to start or expand their business in Hong Kong. These programs offer access to opportunities, enhance capabilities, and facilitate international market expansion. Three unique programs offered by HKTDC are GoGBA, T-box, and Start-up Express.
This is a comprehensive platform that helps investors explore business opportunities between Hong Kong and the Greater Bay Area (GBA), which comprises Hong Kong and 10 other cities in China.
GoGBA provides investors with market intelligence, business matching services, and networking events, which are essential for understanding and tapping into the potential of the GBA market. This platform enables investors to connect with stakeholders, establish partnerships, and leverage the opportunities presented by the GBA region.
This is a program that offers comprehensive support for investors who want to register a limited company in Hong Kong. T-box is explicitly designed for SMEs and covers various aspects of business operations. T-box provides investors with resources to enhance their competitiveness and expand their capabilities.
Whether an investor needs assistance with e-commerce strategies, branding initiatives, supply chain solutions, or manufacturing processes, T-box provides tailored guidance to help their company thrive in the Hong Kong market.
- Start-up Express
This is a program that supports tech-oriented startups in expanding to international markets. Start-up Express provides investors with access to industry experts, other investors, and potential partners for mentorship and guidance.
The program also provides financial assistance through grants and subsidies to cover operational costs. Additionally, startups get exposure through exhibitions, trade fairs, and pitching events, allowing them to showcase their products and services to a global audience.
Emerhub provides tailored solutions to help you navigate the complexities of the Hong Kong Business market, streamline your operations, and maximize your growth potential. Get in touch with us today.
Initiative #4 Establishing a vibrant I&T ecosystem
The budget adds further proof to Hong Kong’s claim of supporting the IT sector in the country. The following initiatives are aimed at aiding startups and tech companies with their business in Hong Kong.
- Co-acceleration Program
This is a program that helps tech start-ups take their business to the next level. HKSTP is investing an extra HK$110 million to give start-ups all the support and resources they need to scale up their business regionally or globally. Investors can get access to mentors, networks, markets, and funding through this program.
- Corporate Venture Fund
This is a fund that helps tech start-ups get the money they need to innovate and develop their technology. HKSTP is adding another HK$400 million to this fund, which means more opportunities for start-ups to get financial backing, strategic guidance, and market insights. Investors can turn their innovative ideas into successful businesses with this fund.
Emerhub’s team of professionals, including experienced company secretaries and skilled accountants based in Hong Kong, provides personalized advice tailored to your unique needs. With our expertise and resources, we offer seamless support for setting up your company, whether you’re a local entrepreneur or an international business owner.
Emerhub ensures a smooth, efficient, and hassle-free process, unlocking the path to your success in Hong Kong’s vibrant business landscape. Fill in the form below to get started.
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