Hong Kong will capitalise on the opportunities arising from the national Belt and Road Initiative and the Guangdong-Hong Kong-Macao Bay Area development proactively and holistically. The government shall play the role of a “facilitator” and “promoter”.
Key initiatives announced in the 2018/19 Budget include:
- Provide tax relief to small and medium-sized enterprises: profits tax rate for the first $2 million of profits proposed is lowered to 8.25 percent, and standard tax rate at 16.5 percent for profits exceeding that amount.
- Encourage research and development (R&D) investment by enterprises, propose to introduce a 300 percent tax deduction for the first $2 million eligible R&D expenditure, with the remainder at 200 percent.
- Increase the total number of comprehensive avoidance of double taxation agreements to be signed with other tax jurisdictions to 50 in the next few years.
- Focus on four key areas: biotechnology, artificial intelligence (AI), smart city and financial technologies
- Inject $10 billion as university research funding to encourage private companies to increase investment in R&D.
- Kick-start the $500 million “Technology Talent Scheme” to train and pool technology talent, and through the injection of $3 billion into the Research Endowment Fund, provide studentships for local students admitted to research postgraduate programmes funded by the University Grants Committee (UGC); and subsidise local enterprises on a matching basis for training their staff on advanced manufacturing technologies.
- Set aside $20 billion for the first phase of the“Hong Kong-Shenzhen Innovation and Technology Park” at the Lok Ma Chau Loop, and through the Guangdong-Hong Kong-Macao Bay Area development and collaboration between Hong Kong and Shenzhen, develop an international IT hub in the Bay Area.
Key initiatives announced in the 2018 Policy Address include:
- Enhance the status of Hong Kong as an international commerce and trading centre by signing more bilateral and multilateral agreements
- Fully participate in and contribute to the Belt and Road Initiative to generate new impetus for economic development
- Establish a Steering Committee for the Development of the Guangdong-Hong Kong-Macao Greater Bay Area for the overall co-ordination of participation in the development
Innovation and Technology
- Inject $20 billion into the Research Endowment Fund of the Research Grants Council; launch a $3 billion Research Matching Grant Scheme; and introduce fellowship schemes for outstanding academics to strengthen the pool of talent in research and innovation and technology in Hong Kong
- Expedite re-industrialisation by establishing a $2 billion re-industrialisation funding scheme to subsidise manufacturers to set up smart production lines in Hong Kong and allocating $2 billion for building manufacturing facilities required by the advanced manufacturing sector in industrial estates
Transportation Services and Logistics
- Formulate tax measures to foster ship leasing business; provide tax concessions for the marine insurance sector; support Hong Kong to provide dispute resolution services to the global maritime industry; and inject $200 million into the Maritime and Aviation Training Fund
- Issue the first batch of virtual banking licences by the end of 2018 or early 2019
- Proactively open up appropriate government premises for the installation of 5G base stations by mobile service operators
- Inject $1 billion into the Film Development Fund to nurture talent, enhance local film production, expand markets and build up audiences
The Government of Hong Kong SAR is also committed to driving local business through a variety of initiatives.
Different schemes have been established to assist companies wishing to set up or expand.
SME Funding Schemes: The scheme provides financial assistance to small and medium enterprises (SMEs) looking to expand their markets outside of Hong Kong.
Technology and Innovation Funding: The Innovation and Technology Fund (ITF) provides support for businesses which adopt innovative ideas and implement modern technology.
Universities and research institutions in Hong Kong can apply for science and technology funding of the Central Government and use the funding here in Hong Kong.
Various programmes have been developed to provide comprehensive support for businesses.
The Hong Kong Science & Technology Parks have three incubation programmes for start-ups in the field of web and mobile technology, technology and biotechnology. The schemes provide subsidised office space, consultancy services, investment matching and financial aid packages.
The Design Incubation Programme (DIP) provides incubates with office space and other professional support such as business knowledge enrichment programmes and mentorships.
The Cyberport Incubation Programme includes financial assistance and rent-free working space as well as other subsidised services.
Technology Talent Admission Scheme
The Government of Hong Kong SAR announced in May 2018 to launch the Technology Talent Admission Scheme (TechTAS) to meet the demand for talent in the innovation and technology sector. The scheme will fast-track the admission of overseas and Mainland research and development talent and will run on a pilot basis for three years. Under the pilot scheme, tenants and incubates of the Hong Kong Science and Technology Parks Corporation (HKSTPC) and Hong Kong Cyperport Management Company Limited (Cyberport) that are engaged in the areas of biotechnology, artificial intelligence, cybersecurity, robotics, data analytics, financial technologies and material science are eligible for application. A maximum of 1,000 people will be admitted in the scheme’s first year.