Hong Kong proposes easing stamp duty rules for corporate restructuring
Hong Kong's government introduced a bill to relax stamp duty exemptions for asset transfers between related companies, lowering the ownership threshold from 90% to 75% and expanding eligibility to limited liability partnerships and guarantee companies without share capital. The changes aim to reduce
Hong Kong’s Secretary for Financial Services and the Treasury moved the second reading of the Stamp Duty (Amendment) (No. 3) Bill 2026 in the Legislative Assembly on 14 October, proposing to relax criteria for stamp duty exemptions on asset transfers between associated corporate bodies.
The bill implements a recommendation from the 2026-27 Budget to lower the ownership threshold for two entities to be considered associated from 90% to 75% of issued share capital. Under the current Stamp Duty Ordinance, association is determined primarily by one entity holding at least 90% of the other’s issued share capital.
Two key changes are proposed. First, when determining association, the government will consider direct and indirect beneficial interests and voting rights in addition to issued share capital. This would extend eligibility to qualifying limited liability partnerships and guarantee companies without share capital. Second, the required ownership percentage will be reduced from 90% to 75%.
“The proposed measures will reduce the cost of transferring property or securities within corporate groups, facilitating flexible restructuring or business expansion,” the secretary said. If passed, the relaxed criteria would apply to instruments executed on or after 25 February 2026, the date of the Budget announcement.
The government argues the changes will improve Hong Kong’s business environment and maintain the competitiveness of its tax system.