Tax Measures
- Tax Reductions: Salaries tax and profits tax will be reduced by 100%, but the cap is lowered to HK$1,500 from HK$3,000 in the previous year. This means businesses and individuals will benefit, but the reduction is less generous than before.
- Global Minimum Tax: The government plans to implement a global minimum tax rate of 15% on large multinational enterprise groups with annual consolidated revenues of at least 750 million euros. This aims to address base erosion and profit shifting.
Business Support and Fees
- Business Registration Fees: Although the 2025/26 budget does not specifically mention changes, the previous year saw an increase in business registration fees to HK$2,200 per annum.
- Investment and Talent Attraction: The budget emphasizes attracting enterprises, capital, and talent through various tax and non-tax measures, which could benefit businesses looking to expand or invest in Hong Kong.
Infrastructure and Innovation
- Innovation Focus: The budget highlights strategic investments in innovation and technology, aiming to position Hong Kong as a leader in these sectors. This could provide opportunities for businesses involved in AI, technology, and related fields.
- Infrastructure Development: While specific infrastructure projects are not detailed, the government’s focus on sustainable growth and development might lead to opportunities for businesses in construction and related sectors.
Economic Environment
- Deficit and Fiscal Discipline: The government is managing a deficit of HK$87.2 billion, which may lead to tighter fiscal policies. However, this also means efforts to optimize public spending and ensure long-term sustainability.
- Geopolitical Challenges: The budget acknowledges geopolitical challenges and high interest rates affecting trade and supply chains. Businesses should be prepared for these uncertainties.
Tourism and Education
- Tourism Revitalization: The budget includes measures to boost tourism, which could benefit businesses in the hospitality and tourism sectors.
- Education Initiatives: Enhancements to the “study in Hong Kong” initiative could attract more international students, potentially benefiting educational institutions and related businesses.
Overall, the budget aims to balance fiscal discipline with strategic investments in innovation and sustainable growth, which could provide opportunities for businesses in these sectors. However, the reduced tax relief and increased fees might impact some businesses negatively.