Hong Kong unveils preferential tax regime to attract high-value industries
Hong Kong's Financial Secretary announced plans for a preferential tax regime targeting advanced manufacturing, R&D, headquarters, logistics and financial sectors. Eligible firms could receive a 5 per cent or half tax rate for up to five years. A legislative amendment bill will be submitted in Decem
The Secretary for Financial Services and the Treasury briefed the Legislative Council on 5 October 2026 on a proposed preferential tax regime under the city's policy package to attract high-value industries and high-potential enterprises.
According to the government, the 2025 Policy Address announced the formulation of a policy package to lure high-value industries. The 2026 Policy Address further declared that a legislative amendment bill would be submitted by the end of this year to establish the tax scheme, which would consider factors including investment plans and substantive contributions to Hong Kong's economy.
The regime targets firms in advanced manufacturing, innovation and research and development, headquarters activities, logistics and supply chain management, and financial services. Eligible companies meeting minimum thresholds for qualifying activities, operating expenditure and full-time employees, and satisfying conditions on investment plans and economic contributions, could receive a preferential rate of 5 per cent – or half the standard corporate rate of 8.25 per cent – for up to five years.
The scheme is designed to be highly selective, with a rigorous vetting process. Both newly arriving businesses and existing Hong Kong firms can apply through InvestHK and the Office for Attracting Strategic Enterprises. A steering committee chaired by the Financial Secretary will assess applications, considering factors such as scale, nature and business plans, and impose conditions on spending and employee numbers.
The government stressed that the proposed regime would complement existing sector-specific tax incentives for finance, shipping and aviation, not replace them. Qualifying enterprises will continue to enjoy preferential rates or exemptions without prior approval.
The legislative amendment bill is scheduled to be submitted to the Legislative Council in December 2026, with implementation planned for the 2027-28 tax year.