Hong Kong Chief Executive John Lee announced, in his 2022 Policy Address on 19 October, promised that his government would be more proactive and aggressive in attracting enterprises, investment and talents to Hong Kong. Over the past two years, the local workforce has shrunk by about 140,000.
To enhance Hong Kong’s competitiveness, he said the government would put in place new institutional structures and implement an array of new initiatives, including tax breaks and looser visa rules, to attract foreign talents to the Special Administrative Region (SAR) and support its economic recovery.
The proposed new structures include the creation this year of an Office for Attracting Strategic Enterprises (OASES), which will be tasked with attracting high-potential enterprises from around the world, particularly those from industries of strategic importance, such as life and health technology, artificial intelligence and data science, Fintech, advanced manufacturing and new energy technology.
To be led by the Financial Secretary, OASES will formulate special facilitation measures covering aspects such as land, tax and financing enterprises, and provide target enterprises with dedicated plans to facilitate the setting up of their operations in Hong Kong. It will also provide one-stop facilitation services in areas such as visa applications and education arrangements for children.
As the government wants to attract “at least 100 innovation and technology businesses” by 2027. With the establishment of a new HKD30 billion (USD2.83 billion) Co-Investment Fund, the government will also consider co-investing in individual projects of the target enterprises, taking into account their potential to drive industry development in Hong Kong.
The government will expand the functions of Mainland Offices and overseas Economic & Trade Offices (ETOs). A total of 17 offices will each set up a Dedicated Team for Attracting Businesses and Talents to target enterprises and talents, liaise with the world’s top 100 universities and promote related schemes.
To attract talent to Hong Kong, the government said it will “proactively trawl the world for talents”. It will launch a ‘Top Talent Pass Scheme’, a two-year pass for exploring opportunities in Hong Kong that is not subject to any quota. Eligible talents will include individuals whose annual salary reached HKD2.5 million (USD318,472) or above in the past year, and individuals graduated from the world’s top 100 universities with at least three years of work experience over the past five years.
The government will also:
- Streamline the General Employment Policy (GEP) and the Admission Scheme for Mainland Talents and Professionals (ASMTP) by removing the requirement to provide proof of difficulties in local recruitment for vacancies falling under the 13 professions with shortage of local supply in the Talent List, or for vacancies with annual salary of HKD2 million (US$318,000) or above.
- Suspend the annual quota under the Quality Migrant Admission Scheme (QMAS), currently set at 4,000 units, for a period of two years
- Extend the duration of stay from one to two years under the Immigration Arrangements for Non-local Graduates (IANG) and extend its scope to include graduates from the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) campus of a Hong Kong SAR university.
- Lengthen the quota validity period under the Technology Talent Admission Scheme (TechTAS) to two years and include emerging technology areas into its list.
- Extend the duration of employment visas to a maximum period of three years under the existing and newly launched talent admission schemes.
To encourage long term relocation, skilled foreign nationals who arrive in Hong Kong under talent attraction programmes and purchase a home in Hong Kong will be eligible to request a refund of the additional buyer’s stamp duty if they apply for permanent residency after living in Hong Kong for seven years. This will bring them into parity with local house buyers who are not first-time purchasers.
The government will establish a Talents Service Unit to co-ordinate with the Immigration Department to process applications received under the talent admission schemes and providing support services. It will also launch electronic services for all visa applications within this year.
Family offices are identified as a key growth segment of the asset and wealth management industry. Last year, Hong Kong managed over USD1,700 billion of relevant assets. The government will introduce a bill this year to offer a tax concession to eligible family offices. The target is attracting no less than 200 family offices to establish or expand their operations in Hong Kong by end-2025.
It will also implement a risk-based capital regime for the insurance industry in 2024 to align with international standards and launch a public consultation this year on a proposal to establish a policy holders’ protection scheme.
It will seek to encourage more Fintech services and products to undergo proof-of-concept trials, taking forward cross-boundary Fintech projects and nurturing Fintech talents. A Commercial Data Interchange will be launched this year to provide a one-stop platform for enterprises to share operational data, enabling banks to make accurate assessments on the operating condition of enterprises and providing SMEs with a better chance of securing loans.
The government has introduced a bill to propose establishing a statutory licensing regime for virtual asset service providers (VASPs). The Hong Kong Monetary Authority (HKMA) is examining market feedback on the regulation of stablecoins and will ensure that the regulatory regime is in line with both the international regulatory recommendations and the local context. The HKMA has also begun the preparatory work for issuing ‘e-HKD’ and is collaborating with the Mainland institutions to expand the testing of ‘e-CNY’ as a cross-boundary payment facility in Hong Kong.
To enhance Hong Kong’s position as a global fundraising platform, the Hong Kong Exchanges and Clearing Limited (HKEX) will revise its Main Board Listing Rules next year to facilitate fundraising of advanced technology enterprises that have yet to meet the profit and trading record requirements. It is also planning to revitalise GEM (Growth Enterprise Market) to provide small and medium enterprises (SMEs) and start-ups with a more effective fundraising platform.
To enhance Hong Kong’s position as the largest offshore RMB business centre – Hong Kong currently processes about 75% of offshore RMB settlement globally – the government will promote the launch of more RMB-denominated investment tools and the provision of stable and highly efficient treasury services such as foreign exchange, exchange rate risk and interest rate risk management tools in the market.
To promote Hong Kong as a financing platform for governments and green enterprises in the Mainland and around the world, the government plans to develop Hong Kong into an international carbon market and will support the HKEX to continue pursuing co-operation with, among others, financial institutions in Guangzhou in carbon market development.