Hong Kong 5-year plan should have Northern Metropolis tax breaks, listing reforms: HKICPA

The Hong Kong Institute of Certified Public Accountants (HKICPA) has called for tax incentives to develop the Northern Metropolis and improvements to the stock exchange’s listing regime, outlining these recommendations in a submission for Hong Kong's first five-year plan. Stephen Law Cheuk-kin, president of the HKICPA, explained that tax incentives should be designed to allow investors backing start-ups in the Northern Metropolis to offset their losses with other profits.

The Northern Metropolis project seeks to turn 30,000 hectares of land near the Chinese border into a technological and economic hub, with the HKICPA suggesting lower tax rates for residents working there, according to a media briefing on Tuesday. Additionally, HKICPA CEO Arthur Lee Kin urged the government to negotiate with mainland Chinese authorities over the 20% tax on mainland residents' gains from cross-border trust and insurance policies bought in Hong Kong, proposing the tax be levied at the point of realization rather than when the money is initially invested.

The institute also proposed reforms to simplify and speed up the stock listing process, aiming to attract more high-quality companies to list in Hong Kong. They further suggested that Hong Kong Exchanges and Clearing reform the GEM board, a platform for start-ups, allowing them to raise funds before qualifying for the main board.

Finally, HKICPA Vice-President Jasmine Lee Shun-yi emphasized the need to bolster Hong Kong's role as a platform for assisting mainland enterprises in global expansion, noting that 96 Hong Kong-based accounting firms are ready to help with mergers and acquisitions or overseas expansion plans.