Hong Kong Announces New Visa and Property Tax Regulations

Hong Kong is decreasing property taxes and stress-free visa necessities for non-permanent residents to attract in worldwide expertise and resurrect town’s fame as a worldwide monetary heart. The brand new measures deal with the present workforce scarcity whereas concurrently growing the native expertise base and shutting the talents hole.

On October 19, 2022, Hong Kong Chief Govt John Lee unveiled a number of coverage proposals, together with tax breaks and looser visa guidelines, to draw international abilities to the Particular Administrative Area (SAR) and help its financial restoration.

In accordance with authorities information launched in August 2022, Hong Kong registered a file 1.6 p.c fall in inhabitants year-on-year, with 113,200 folks leaving town. Furthermore, because of the affect of COVID-19, employment charges have dramatically decreased since 2020. Youthful generations have been hit notably onerous by this pattern. The variety of staff between the age of 20 and 39 fell considerably within the second quarter of 2022, and the variety of these within the age group between 20 and 24 was down 14.98 p.c.

The brand new measures designed by the federal government intend to verify the ‘mind drain’ that has affected Hong Kong’s labor market and jeopardized its financial restoration.

Under we cowl the newest coverage proposals for attracting international abilities to Hong Kong and talk about the affect the brand new coverage could have on town.

Key coverage highlights at a look

Throughout his coverage deal with, Chief Govt John Lee mentioned a number of insurance policies to draw enterprise, funding, and expertise to Hong Kong. Under is a abstract of the assorted schemes:

• Prime Expertise Move Scheme: A brand new Prime Expertise Move Scheme will likely be carried out for people who’ve been incomes a minimum of HK$ 2.5 million (US$318,472) a 12 months, or those that have graduated from one of many world’s high 100 with a minimum of three years of labor expertise.
• Workplace for Attracting Strategic Enterprises: An Workplace for Attracting Strategic Enterprises, headed by the Monetary Secretary, will likely be established with the aim of attracting strategic companies from each Mainland China and overseas, with a specific emphasis on sectors with a strategic significance, resembling life and well being know-how, synthetic intelligence and information science, superior manufacturing, and new vitality know-how.
• Strengthen the connection between universities and companies: The duties of Mainland workplaces and abroad financial and commerce workplaces will likely be elevated with the intention to promote the applications of the Hong Kong Particular Administrative Area to companies and professionals and to interact with the highest 100 establishments on the planet. A HK$30 billion (US$2.83 billion) fund will likely be established to ask firms to ascertain operations in Hong Kong SAR and make investments there.
• Relaxed immigration plans: The Normal Employment Coverage Scheme (GEP) and the Admission Scheme for Mainland Skills and Professionals (ASMTP) will likely be relaxed by eradicating the necessity for labor market testing for a choose group of jobs the place there’s a acknowledged scarcity of expert staff or the place the proposed annual wage is HK$2.5 million (US$318,000) or extra.
• Suspension of the High quality Migrant Admission Scheme: The annual quota of the High quality Migrant Admission Scheme – presently set at 4,000 models – will likely be suspended for the subsequent two years, to permit the entry of extra abilities. Subsequently, the Expertise Checklist will likely be up to date to mirror present market calls for and shortages in related skilled fields.
• Expanded IANG: Below the brand new coverage plan, the Immigration Preparations for Non-local Graduates (IANG) will prolong its keep interval from one to 2 years, and its scope will develop to incorporate graduates from the Guangdong-Hong Kong-Macao Better Bay Space (GBA) campus of a Hong Kong SAR college.
• TechTas Scheme: The Know-how Expertise Admission Scheme (TechTas) will likely be additional improved to incorporate rising know-how areas into its record, and to elongate the quota validity interval to 2 years.
• Different keep permits and visa renewal preparations: The federal government introduced that extra provisions could be taken to switch the keep preparations for a number of different expertise admission schemes and streamline the visa renewal course of.

Attracting (younger) international abilities

Certainly one of Hong Kong’s present visa applications, the High quality Migrant Admission Scheme, permits certified staff to remain within the metropolis for twenty-four months with out taking down a job. Nonetheless, there are a number of necessities that candidates should meet along with passing point-based exams, and as of 2021, there may be an annual quota restriction of 4,000. In earlier years, the quota was even decrease. With the roll-out of latest coverage measures, the quota will likely be suspended – for a specified interval.

A two-year move for exploring alternatives in Hong Kong will likely be obtainable to those that make HK$25 million (US$318,000) or extra per 12 months or who’re graduates of one of many high 100 schools on the planet and have three years of job expertise within the earlier 5 years.

The instructed 18-month visa may very well be just like the technique employed within the UK – which additionally recognized areas with a expertise scarcity and carried out a piece visa program for “Excessive Potential People.”

Tax breaks and home buy

The federal government introduced its intention to boost the tax breaks on supply to buyers and introduce new tax reduction measures as a part of the brand new measures to draw international expert staff.

To help the asset and wealth administration business, by the top of 2022, Hong Kong will introduce a invoice to supply tax concessions for certified household workplaces. This transfer is anticipated to draw a goal of a minimum of 200 household workplaces to ascertain or increase their operations in Hong Kong by the top of 2025.

In his coverage deal with, Lee added that the federal government will enhance the favorable tax framework for plane leasing and undertake tax incentive measures to entice extra high-value-added maritime companies to ascertain a presence in Hong Kong. He outlined plans for the Workplace for Attracting Strategic Enterprises (OASES), because the group will oversee interacting with “high-potential and strategic enterprises from throughout the globe,” notably these concerned in monetary know-how (Fintech), superior manufacturing, and new vitality know-how, in addition to life and well being know-how, synthetic intelligence, and information science. OASES will likely be given the authority to formulate enticing plans protecting facets resembling land, tax, and financing which might be relevant solely to focused companies, and supply them with tailor-made plans to facilitate the establishing of their operations in Hong Kong.

Lastly, to draw the relocation of expert international nationals, beginning October 19, 2022, those that arrive in Hong Kong underneath expertise attraction applications and buy a house will likely be eligible to request a refund of the customer’s stamp responsibility.  Presently, international residents should pay 30 p.c in stamp responsibility when buying a house, which is twice what locals who aren’t first-time purchasers should pay. The additional stamp responsibility will likely be returned to international homebuyers underneath a scheme being developed supplied they’re granted everlasting residency, a standing they will request after dwelling within the metropolis for seven years.

Wanting forward: challenges and tendencies

The Chief Govt’s coverage deal with come as Hong Kong strives to revitalize its economic system and world fame. Town lately misplaced its place as Asia’s high monetary hub to Singapore within the International Monetary Centres Index.

As there aren’t sufficient native graduates to match demand and the marketplace for younger expertise has lengthy been unsaturated, these measures may also help ease the labor scarcity and revive town’s worldwide competitiveness.

Furthermore, the coverage plan pledges to rework Hong Kong into a wise metropolis, with the aim of bringing all governmental providers on-line inside two years. This will prolong to the elevated digitization of visa software procedures.

As the federal government desires to attract “a minimum of 100 innovation and know-how companies” by 2027, enterprise representatives have already expressed satisfaction with the announcement of such applications, hoping that such measures will additional prolong past the sector of know-how sectors.

However the challenges in attracting international abilities, the brand new measures will make it significantly simpler for companies and buyers to relocate to Hong Kong. Certainly, within the short-term, high-skilled abilities in particular fields could also be benefiting extra from such insurance policies. Nonetheless, in the long term, these might have to increase to different sectors as effectively.

General, the brand new coverage plan is a welcome step in the direction of returning town to its spot as a worldwide worldwide hub and enterprise heart