Hong Kong’s Financial Secretary, Paul Chan, outlined his budget for 2023-24 in his Budget Address on 22 February 2023. With the backdrop of a nascent post-pandemic recovery and the Hong Kong’s second-highest fiscal deficit on record, the 2023/24 budget (the Budget) balances the need to support economic recovery and shore up the public finances. Highlights of some measures of particular interest to Hong Kong companies and those with business interests in Asia, are set out below.
Business Registration fee waiver ends
The Business Registration (BR) fee waiver that Hong Kong companies have enjoyed since the 2019-20 budget has not been included in the most recent Budget, and thus the full BR certificate fee will come into effect once again. Accordingly renewals and new incorporations taking place 1 April 2023 onwards will be charged the HKD2,000 (USD255) for their BR certificate payable to the Hong Kong Government, along with the BR levy of HKD150.
The IRD’s current business registration and levy fee table can be viewed here.
The other statutory annual government fee currently remains unchanged. Namely the Annual Return filing fee of HKD105.
REMINDER: For Hong Kong companies in the process of deregistration, the above statutory fees are still required to be paid annually until the company is deregistered unless the company has already claimed dormancy.
For more details please contact your usual Marbury advisor, or contact us at info@marburys.com.
Workforce
Capital Investment Entrant Scheme
In line with the Government’s initiative to attract investment and talent, the Budget announced the reintroduction of a Capital Investment Entrant Scheme whereby applicants may reside and pursue development in Hong Kong after making investment at a certain amount in the local asset market, excluding property.
When further details become available, we will update Marbury’s Visa Services pages.
Tax deduction for Mandatory Provident Fund (MPF) contributions for older employees
To boost the size of the working population, the Budget proposed the increase in tax deduction for Mandatory Provident Fund voluntary contributions made by employers for the their employees aged 65 or above, from 100% to 200% so as to simultaneously encourage their employment and increase their pension savings.
– #HKPayroll Services: See Marbury’s explainer – what is MPF?
Watch this space
Tax policy
In line with Hong Kong’s previous commitment to actively implement the BEPS 2.0 proposals, relating to global minimum taxation, the Financial Secretary has given the start date of 2025 for Hong Kong to implement the global minimum effective tax rate (GMT) on large multinational enterprise (MNE) groups and domestic minimum top-up tax. A consultation exercise will be launched to allow MNE groups to make early preparations.
Re-domiciliation mechanism
Given recent international tax trends, such as the above GMT, MNE groups might be prompted to re-domicile their companies in tax-free or low-tax jurisdictions elsewhere. In order to promote Hong Kong as a preferred base for MNE groups, the Budget includes a proposal to introduce a mechanism to facilitate companies domiciled overseas, particularly enterprises with a business focus in the Asia Pacific region, to re-domicile to Hong Kong.
The government will conduct a consultation and submit legislative proposals in 2023-24.
More information can be found at the official website of the Budget proposal.
Disclaimer
This updater has been prepared for clients and professional associates of Marbury. The information and expressions of opinion contained are not intended to be a comprehensive study or to provide legal advice. Readers are advised to seek specific advice concerning individual situations. For more information, please contact your usual Marbury advisor or info@marburys.com.