KPMG Welcomes Hong Kong’s Tax-related and Talent Policies: A Step in the Right Direction

HONG KONG SAR 30 October 2023 – KPMG welcomes the recent tax-related policy measures and talent retention policies announced in the Policy Address. These initiatives mark a significant step forward in addressing key challenges faced by the city.In response to the current residential property market and economic conditions in Hong Kong, the government has adjusted the demand-side management measures for residential properties. Notably, this includes a reduction in the rates of both the Buyer’s Stamp Duty and the New Residential Stamp Duty from 15% to 7.5%, effectively lowering transaction costs for homebuyers. Ivy Cheung, Regional Senior Partner in Hong Kong SAR, KPMG, said, “We agree with the government’s decision and believe that continued monitoring of the property market is necessary to ensure its healthy and stable development.”

The Capital Investment Entrant Scheme will enable eligible investors who invest HK$30 million or more in assets such as stocks, funds, and bonds to apply for entry into Hong Kong. Ivy Cheung further added, “Considering the minimum asset threshold of HK$240 million under the family office tax regime, this threshold is not high, and ultra-high net worth (UHNW) families should not face difficulties meeting the requirement. The Scheme, along with the family office tax regime effective from the 2022/23 tax year, will contribute to the development of family office businesses in Hong Kong and enhance its status as an international asset management centre. We look forward to the announcement of the further details of the Scheme by the end of this year.”

Commenting on the talent initiatives, Ivy Cheung said: “The introduction of the Multiple-entry Visa to the Mainland for Foreigners Working in Companies Registered in Hong Kong is highly welcomed as it aligns well with the goal of attracting overseas companies to set up operations in Hong Kong. The ability for foreign executives to have easy access to the Mainland through multiple-entry visas will give Hong Kong an advantage over other jurisdictions. The administrative friction that often accompanies frequent travel to the Mainland will be alleviated, making Hong Kong an attractive destination for companies and talents alike.”

Regarding the Talent List coverage, she commented: “The Talent List currently covers a wide range of professions and industry segments, and we suggest including accountants in the list. Additionally, streamlining the application approval processes will support the smooth movement of talent into Hong Kong.”

These policies implemented by the Hong Kong government are steps in the right direction to address the talent shortage. By continuously evaluating and refining these policies, KPMG believes that Hong Kong could remain competitive and attractive to professionals from various fields, thereby bolstering its position as a global hub for professionals.

With the strong support of Chinese Mainland and the close connection to the world, Hong Kong should capitalize its strength as the only world-class city that can benefit from both Chinese Mainland and the rest of the world.