Hong Kong boosts funding support for IT business solutions
In April, the Innovation & Technology Commission (ITC) launched the Distance Business (D-Biz) Programme, under the Anti-Epidemic Fund, to support enterprises to continue their business and services during the epidemic through IT solutions.
The D-Biz Programme provides 100% funding support to qualified enterprises, subject to a cap of HK$100,000 per IT solution (related training expenses to be capped at 10% of solution cost) and HK$300,000 per enterprise. An initial payment of 30% of the approved funding amount is payable to a designated bank account after the application is approved.
In view of the overwhelming responses from enterprises, the government further announced on 26 June to the allocation of an additional HK$1 billion, in addition to the original HK$500 million, to benefit more enterprises.
The Covid 19 epidemic has changed the global business environment and acted as a catalyst for online solutions. Outsourcing of bookkeeping, accounting and payroll functions is an effective route to reduce internal operational costs, enabling the business to devote more time and resources to focus on value-added and revenue generating tasks.
Outsourcing of these activities is beneficial for all kinds of businesses, regardless of their size, but can be particularly advantageous for companies that are just starting-up or are entering a new market for the first time. These companies are often very cost sensitive and will be facing a number of new accounting, employment and tax-related challenges.
The Sovereign Trust (Hong Kong) Client Accounting Team is experienced in managing clients conducting online businesses. We offer operational services including bookkeeping, invoice-raising, payment-settling, payroll, and management accounts (monthly, quarterly or yearly) for managerial decision-making. We also provide tax consultancy services to assist clients in tax planning and future development. Please get in touch with us if you wish to know further about these services.
The Hong Kong government has also made further enhancements to its Branding, Upgrading and Domestic Sales (BUD) Fund, including the removal of the geographical demarcation for each enterprise in undertaking projects in the Mainland and other economies that have signed Free Trade Agreements with Hong Kong ($2 million cumulative funding each).
The BUD Fund was set up in 2012 to provide funding support to assist non-listed Hong Kong enterprises in exploring and developing the Mainland market through developing brands, upgrading and restructuring operations, and promoting domestic sales in the Mainland. In 2018, the geographical coverage of the funding support was extended to include the Association of Southeast Asian Nations (ASEAN) markets.
To strengthen the support to enterprises in exploring new markets and new business opportunities, the Hong Kong government rolled out the following enhancement measures to the BUD Fund.
In January this year, the Trade and Industry Department (TID) further extended the scope of the BUD fund from the 10 ASEAN countries to cover any countries with which Hong Kong has signed a Free Trade Agreements (FTAs), including New Zealand, the four member states of the European Free Trade Association, Chile, Macao, Georgia and Australia.
It also doubled the cumulative funding ceiling for each enterprise from HK$2 million to HK$4 million, such as increasing the cumulative funding ceiling under the Mainland Programme from $1 million to $2 million, and from $1 million to $2 million under the FTA Programme. The ratio of initial payments of the approved government funding was further raised from 25% to up to 75%.
These enhancements to the BUD Fund have been effective since 9 April. An online application service was made available from 30 June.
The Hong Kong Inland Revenue Department and Company Registry are also now encouraging e-tax, e-filling and e-registry and, by way of incentive, the government charge for incorporation (including registration of non-Hong Kong companies) will be reduced by 10% for e-incorporation with effect from 1 October 2020.
In addition, starting from 1 October, the registration fees for annual returns (except for late delivery) charged by the Companies Registry will be waived for two years until 30 September 2022. In cases of any late delivery of annual returns, companies are still required to pay the statutory higher registration fees calculated based on the date of delivery, even though the date of delivery is within the period of waiver.