As Hong Kong moves on from the COVID-19 pandemic, efforts are being prioritised to revitalise Hong Kong’s economy. Recently, the Financial Secretary announced the 2023-24 Budget (“Budget”) with the specific aim of boosting Hong Kong’s economy, and a number of measures have been proposed to attract and retain talent and support businesses. We have set out below the Top 5 highlights for employers and employees:
1. One-off Profit Tax Reduction
As a measure to support businesses affected by the pandemic, the Budget proposes a one-time reduction of 100% in profits tax for the 2022/23 year of assessment, subject to a cap of HK$6,000.
2. One-off Salaries Tax Reduction
Similar to the profits tax reduction, the Budget also proposes a one-time reduction of 100% in salaries tax and tax under personal assessment for the 2022/23 year of assessment, subject to a cap of HK$6,000.
3. Tax Reduction for Elderly Employees Doubled
The Budget is also proposing to double the current tax deduction (from 100% to 200%) for Mandatory Provident Fund voluntary contributions made by employers for their employees aged 65 or above, so as to encourage more businesses to employ and retain elderly employees.
4. Relaunch of the Capital Investment Entrant Scheme (“CIE Scheme”)
The CIE Scheme, which has been suspended since 2015, is set to be revamped and relaunched to attract more new capital and diversify the talent pool in Hong Kong. The CIE Scheme will require applicants to invest a prescribed amount in designated asset classes in Hong Kong. Holders of a CIE Scheme visa will be able to reside and take up employment in Hong Kong. Further details of the revamped scheme will be announced later.
5. Other Measures to Attract Talents
The Financial Secretary reiterated the government’s commitment to attracting overseas talent to Hong Kong. The Labour and Welfare Bureau is currently updating the Talent List, which is a website that provides information on the types of talent which Hong Kong needs the most in the immediate to medium-term, allowing Hong Kong to attract talent in a more focused manner. The government will also conduct a new round of manpower projections in mid-2023 to help with formulating appropriate strategies to address Hong Kong’s overall manpower needs.
The Budget packs in a range of measures that are expected to benefit both employers and employees. These measures are a step in the right direction and are likely to provide a vital boost to Hong Kong’s economy.
How we can help
Our dedicated employment and immigration teams can support your business with employment matters and visa applications for your employees and their dependants. We are also on hand to support individuals with their CIE Scheme applications once the scheme is relaunched. Please reach out to us if you would like more information.