“The Chief Executive’s 2017 Policy Address” of Hong Kong – Highlights related to Doing Business in Hong Kong

“The Chief Executive’s 2017 Policy Address” of Hong Kong – Highlights related to Doing Business in Hong Kong

Taxation

  • Propose the two-tier profits tax system. Profits tax rate for the first HK$2 million of profits proposed to be lowered to 8.25%, and standard tax rate at 16.5% for profits exceeding that amount. Only one enterprise nominated by each business group is eligible for the lower tax rate.
  • Encourage research and development (R&D) investment by enterprises, propose to introduce a 300% tax deduction for the first HK$2 million eligible R&D expenditure, with the remainder at 200%.

Innovation and Technology (“I & T”)

  • Have set a goal to double the Gross Domestic Expenditure on R&D as a percentage of the Gross Domestic Product from the current 0.73% to 1.5% within the current-term Government’s five-year tenure.
  • The Education Bureau will make available HK$3 billion to provide studentships for local students admitted to University Grants Committee-funded research postgraduate programs.
  • The Innovation and Technology Bureau will launch a HK$500 million “Technology Talent Scheme”, including the establishment of a “Postdoctoral Hub”.
  • Strive to attract top overseas scientific research institutions to Hong Kong. In the past three months, several internationally renowned institutions expressed interest in setting up key technology collaborative platforms in Hong Kong.
  • Propose to invest HK$700 million to immediately take forward several projects to develop Hong Kong into a Smart City.
  • The Chief Executive will personally lead a high-level, inter-departmental Steering Committee on Innovation and Technology to examine and steer measures under the eight areas of I&T development as well as Smart City projects.
  • The Chief Executive’s Council of Advisers on Innovation and Strategic Development, to be formed by revamping the Economic Development Commission and the Commission on Strategic Development, will also offer ideas and advice to the Government on I&T development to maintain Hong Kong’s competitiveness in the global arena and enhance Hong Kong’s alignment with the development of our country.

Labour Rights

  • Mitigate the impact of the abolition of the arrangement for “offsetting” severance payment/long service payment with Mandatory Provident Fund contribution on enterprises, particularly micro, small and medium enterprises by increasing Government’s financial commitment. Put forward a proposal that addresses the interests of the labour and business sectors in the coming months.
  • Initiate a proposal to increase paternity leave from the current three days to five days, and commence a study and work on enhancing the maternity leave of working women.