Fiscal incentives for business growth
For more than a decade, Hong Kong has been keen to build up the startup ecosystem through the Hong Kong Science and Technology Park (HKSTP) and Cyberport and to upgrade itself in the international ranking on innovation and technological advancement. In the coming years, the Lok Ma Chau Loop (now officially known as Hong Kong-Shenzhen Innovation and Technology Park (HSITP)) will start operation. San Tin Technopole, in the core part of the Northern Metropolis and not far away from HSITP, has also been earmarked for technological enterprises.
The three Inno Parks, namely Tseung Kwan O on data technology / advanced manufacturing, Yuen Long on microelectronics and Tai Po on pharmaceutical innofacturing / precision manufacturing / medical accessory resilience supplies / health products etc. have been refurbished for different target manufacturing segments and products.
With all these developments, it is imperative to attract businessmen, both local and overseas, to come with their projects.
In recent years, the Government of the Hong Kong Special Administrative Region (HKSAR) has been giving out tax deduction of 200% / 300% on qualified research and development expenses to encourage researches in Hong Kong. Qualified institutes e.g. Hong Kong Applied Science and Technology Research Institute, Nano and Advanced Materials Institute Limited etc have been helping enterprises, big or small, to conduct technological as well as life science researches.
To help in research, the 2024 budget provided for:
a. HK$6 billion for universities and research institutes to set up thematic research centers on life and health technology;
b. HK$3 billion for frontier technology fields such as artificial intelligence and quantum technology;
c. HK$260 million for Cyberport to nurture small living startups;
d. HK$400 million for the Corporate Venture Fund and HK$110 million for the Co-acceleration program of HKSTP;
e. HK$75 million for conducting studies on establishing the Building Testing and Research Institute, constructing an advanced construction industry building and strengthening the supply chain of Modular Integrated Construction modules;
f. A Microelectronics Research & Development Institute will be set up to enhance the collaboration of universities, research centers and the industry;
g. Feasibility study on the setting up of the 2nd Advanced Manufacturing Centre.
As HKSAR is also promoting digital economy / virtual asset industry/ green tech to transform Hong Kong, fundings have also been allocated for:
1. HK$500 million for the Digital Transformation Support Pilot Program to help SMEs (small to medium size enterprises) to adopt ready-to-use basic digital solutions;
2. HK$200 million to enhance the “iAM Smart” platform to improve user experience;
3. Tax deduction for the spectrum utilization fees paid by telecommunication network operators which successfully bid for radio spectrum;
4. Conduct a feasibility study on the setting up of an Artificial Intelligence Supercomputing Centre;
5. More efforts will be made to develop the virtual asset industry and HK$50 million will be used to further develop the Web3 ecosystem;
6. A Green Technology and Finance Development Committee will be set up to formulate action agenda on green technology, green finance, standard certification etc.
7. The numerous funding schemes are still available to help enterprises in financing and marketing.
All the tax incentives and fundings introduced in previous years are still in place. It is hoped that positive results could be seen in the coming years.
Useful links:
https://www.iamsmart.gov.hk/en/
https://nm-santintech.hk/en/study-overview/pvap/
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