Hong Kong Budget 2021-22: Stabilising the economy and alleviating people's burden 

For Hong Kong, 2020 was another tough year full of difficulties and challenges with the Covid-19 pandemic ravaging the world and causing economic recessions. While Hong Kong's economy recorded a negative growth of 6.1% with the latest unemployment rate rising to 7% in the past year, Hong Kong’s economy as well as the global economy are expected to resume positive growth this year with the launch of vaccination schemes in various places around the world. 

The 2021-22 Budget puts its focus on “stabilising the economy and relieving people's burden”, aiming at alleviating the hardship and pressure caused by the economic downturn and the epidemic. We have summarised the key points from the Budget that are likely relevant to many of our clients’ businesses:

Support Enterprises 

a)    Extend the application period of 100% guarantee low-interest loan for enterprises to the end of this year, raise loan ceiling to $6 million, extend repayment period and duration of principal moratorium

b)    Reduce profits tax for 2020-21 assessment year by 100%, subject to a $10,000 ceiling

c)    Provide rates concession for non-domestic properties in 2021-22, subject to a ceiling of $5,000 per quarter in first two quarters and $2,000 per quarter in remaining two quarters

d)    Waive business registration fees for 2021-22

e)    Continue to waive 75% of water and sewage charges of non-domestic households for 8 months, subject to a monthly ceiling of $20,000 and $12,500 respectively

f)    Continue to grant 75% rental/fee concession for eligible Government properties/short-term tenancies and waivers for 6 months (100% concession for those closed at the Government’s request)

Financial Services

a)    Issue no less than $24 billion of Silver Bond and no less than $15 billion of iBond this year. Lower the eligible age for Silver Bond subscription from 65 to 60 

b)    Issue green bonds totalling $175.5 billion within the next 5 years, and plan to issue retail green bonds

c)    Roll out Green and Sustainable Finance Grant Scheme to subsidise expenses on bond issuance and external review services

d)    Strive for the launch of Southbound Trading of Bond Connect within this year, and enhance the domestic Central Moneymarkets Unit

e)    Provide subsidy for Real Estate Investment Trusts to list in Hong Kong

f)    Launch a Pilot Insurance-linked Securities Grant Scheme to subsidise issuance costs

g)    Provide subsidies to cover 70 per cent of the expenses paid to local professional service providers for OFCs set up in or re-domiciled to Hong Kong in the coming three years, subject to a cap of $1 million per OFC.  The SFC will announce relevant details in due course

h)    Review tax arrangements relevant to family office business

Innovation and Technology 

a)    Earmark over $200 million to roll out “Knowing More About IT” Programme, subsidise primary schools to enhance students’ interests and knowledge in I&T and their applications through extra-curricular activities

b)    Regularise the pilot scheme which subsidises students studying science and technology in local universities to enrol in short-term I&T related internships

c)    Inject $9.5 billion into the Innovation and Technology Fund by two yearly instalments

d)    Hong Kong Monetary Authority to consider enhancing its Fintech Supervisory Sandbox to reduce time for launching innovative financial products in the market

e)    Press ahead with the development of the Hong Kong-Shenzhen Innovation and Technology Park in the Lok Ma Chau Loop

f)    Continue to implement the Science Park expansion and Cyberport 5 development
 

For further details and full speech of the Hong Kong Budget 2021-2022, please refer to https://www.budget.gov.hk/2021/eng/speech.html