A summary of the Hong Kong Budget 2023/24

The latest Hong Kong budget focuses on post-pandemic economic recovery and rejuvenating the city’s position as an international financial centre and asset management hub.  

Paul Chan, the Financial Secretary of Hong Kong SAR Government delivered the first budget speech, under the current term of government led by John Lee. 

With goals of pursuing economic growth and improving people’s quality of life, the government maps out an array of measures and allocates 80% of the resources for budget initiatives to the general public and small and medium enterprises (SMEs).  

Key takeaways for SMEs 

• Reduced profit tax and salary tax by 100 percent for the assessment year 2022/23, both subject to a ceiling of HK$6,000 to ease business operating pressures 
• Extension to the application period of all guaranteed products from June 2023 to March 2024, under the SME Financing Guarantee Scheme, a scheme that helps SMEs to obtain financing from the government  
• An injection of HK$500 million into the dedicated fund on Branding, Upgrading and Domestic Sales (BUD Fund) for SMEs to grasp economic opportunities and boost competitiveness 
• Reserves of HK$500 million will be used to launch a Digital Transformation Support Pilot Programme to facilitate SMEs’ business digitalisation 
• An allocation of HK$100 million to support the Hong Kong Productivity Council, which has various government subsidies for SMEs to apply for, such as 
  • Export Marketing Fund – for SMEs participating in export promotion activities and expanding to overseas markets  
  • Technology Voucher Programme - for SMEs to improve business processes by adopting technological solutions  
  • Enterprise support scheme - for SMEs to conduct in-house research and development to encourage investment from the private sector  
• Continuing to attract overseas companies to re-domicile to Hong Kong, following the mechanism in 2021, allowing foreign investment funds to be re-domiciled as limited partnership funds (LPFs) or open-ended fund companies (OFCs) 
• Providing HK$100 million to InvestHK, to attract more family offices to Hong Kong, alongside the introduced profit tax exemption for single family offices in Hong Kong in December 2022 (more can be found in article Guide to Establishing Family Office in Hong Kong) 

Summary  

We welcome the government embarking on a post-pandemic recovery journey by launching this series of relief measures, while balancing the livelihood pressure of the public and its shrinking reserves.  

Some overseas enterprises with minimal or no presence in Hong Kong have shown interest in growing their business in the city but are worried about not being categorised as an SME, and therefore not receiving government funding.  

The Equiom Hong Kong team is available to support clients, individuals or companies looking to establish a firm footing in Hong Kong or learn more about the government application process.  

If you would like to learn more about how the budget measures benefit your business, or discuss your specific circumstances, please contact Gerard Chinniah.  

This article has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. This article cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained within this article without obtaining specific professional advice. Please contact Equiom Group to discuss these matters in the context of your particular circumstance. Equiom Group, its partners, employees, and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this article or for any decision based on it.