Hong Kong tax reforms for treasury centres will lure multinationals, mainland firms: PwC

The Hong Kong government is introducing tax incentives for corporate treasury centres to attract multinational and mainland firms, according to tax experts at PwC. Treasury centres act as internal banks for companies with operations in multiple jurisdictions, managing cash flows, financing, investments, and risk. The government is seeking public feedback on the reforms until September 4, with a bill expected in the Legislative Council in the first half of 2027.

Rex Ho, Asia-Pacific financial services tax leader at PwC Hong Kong, stated that enhancing tax incentives will attract more enterprises to establish corporate treasury centres in Hong Kong, boosting the city's financial ecosystem. A two-tier system of tax concessions has been proposed, with smaller firms receiving a 50% tax deduction on profits from treasury-related activities if they hire at least two staff and spend a certain amount annually.

Large companies can apply for a five-year pre-approval mechanism, which will enhance Hong Kong's competitiveness as a corporate treasury centre. State-owned enterprises in China already hold significant overseas assets and have set up treasury centres in Hong Kong, taking advantage of the city's international banking system and capital markets.