In its recommendations for the 2026-27 Budget, the Chamber proposes measures to strengthen Hong Kong’s competitiveness while addressing structural and geopolitical challenges. The submission lays out recommendations for leveraging Hong Kong’s silver economy and maximizing opportunities for business and society driven by the emergence of AI. Below is a summary of some of the main points in the submission.
Stimulate the Economy
Despite a resilient performance in 2025, the economy continues to face various risks and challenges. The Chamber urges the Government to introduce measures to alleviate the burden of its residents and businesses, particularly small business owners.
• Provide one-off reductions of salaries tax, tax under personal assessment and profits tax for the 2025-26 year of assessment by 100%, subject to a $3,000 ceiling per case.
• Extend the application period of the 90% Guarantee Product under the SME Financing Guarantee Scheme for one year to end-March 2027.
• Introduce long-term fixed-rate mortgage loans for SMEs, such that the longer the mortgage term, the lower the monthly payments.
Attract Enterprises and Investment
Hong Kong is uniquely positioned to serve as a “super-connector,” assisting Mainland enterprises in going global while helping international firms access the vast Mainland market.
• Provide tax incentives such as a preferential rate at 50% of the standard corporate tax on profits derived by regional headquarters in the city.
• Strengthen dispute resolution capacity by adopting technology, particularly AI, in the provision of legal services.
• Review and update section 45 of the Stamp Duty Ordinance to extend stamp duty relief to all bona fide intra-group transfers.
• Establish a statutory Building Repair Authority to serve as a central coordinating and regulatory body for maintenance and repair issues concerning ageing structures.
Strengthen the Competitiveness of the Financial Market
Strengthening Hong Kong’s international business environment remains crucial. Leveraging the city’s status as the world’s premier international financial centre, this effort includes advancing key market segments such as family offices, the bond market, sustainable finance, and more.
• Family Office: Introduce a concessionary tax rate of 10% to eligible single FOs on qualifying income, subject to the fulfilment of certain criteria.
• Bond Market: Offer subsidies for listing costs to high-quality international issuers seeking to list bonds in Hong Kong.
• Sustainable Finance: Include natural gas-fired power generation as a transition activity in the next phase of the Hong Kong Taxonomy for Sustainable Finance (i.e., Phase 2B).
• IP Trading: Establish internationally accepted IP valuation standards across intangible assets, including patents, trademarks, copyrights, and trade secrets.
• Digital Asset: To drive the adoption of Central Bank Digital Currency (i.e., e-HKD) or stablecoins, integrate with the Faster Payment System (FPS) for on-ramp and off-ramp functionality.
• Commodity Trading: Prompt legislative action on the new half-rate tax concessionary regime and host commodity forums or summits.
Create Synergy in the GBA
The Chamber emphasizes the importance of boosting cooperation within the Greater Bay Area by enhancing the Connect Schemes and deepening financial market connectivity.
• Further enhance existing connect schemes and explore the establishment of new ones in response to rapidly evolving market dynamics.
• Establish Virtual Asset Connect, enabling two-way cross-border participation in licensed virtual asset activities between Hong Kong and the Mainland.
• Liaise with Mainland authorities to exempt Mainland individual investors from paying the 20% tax on dividends from Hong Kong stocks purchased via Stock Connect.
• Engage with Mainland tax authorities to clarify potential China tax implications for companies re-domiciling to Hong Kong.
Foster the Development of Northern Metropolis
The Chamber continues to support the Government in fostering the development of the Northern Metropolis through public-private partnerships (PPP), streamlining procedures and expediting approvals.
• Adopt PPP, involving both financial and non-financial participation from the private sector, to enhance efficiency.
• Streamline approval procedures for construction works to reduce both the construction cost and time required for constructing supporting infrastructure and utilities.
• Provide tax incentives, including enhanced tax depreciation allowances for capital expenditure, and investment incentives, such as providing 1.5x–2x multipliers for eligible investments, to attract more private capital into government-led projects.
Catch the AI Boom
The adoption of AI is the most critical driver of Hong Kong’s successful economic transformation. The Chamber strongly recommends that the Government develop a dedicated AI strategy and roadmap focused on responsible implementation.
• Encourage local R&D activities: Extend the super tax deduction to include R&D activities conducted within the GBA and expand the scope to include R&D activities provided to foreign parties.
• Build an AI-ready workforce: Introduce tax incentives for employers, such as a 120% tax deduction for AI-related training expenses and provide individual subsidies of $5,000 under the Continuing Education Fund to offset fees for a wide range of AI courses.
• Accelerate AI adoption: Conduct a comprehensive regulatory impact assessment, providing an objective cost-benefit analysis of AI regulations, and introduce a cross-sector AI sandbox.
Get Ahead of Ageing
The demographic shift is a ticking time bomb. An ageing population will soon, if not now, start to hinder economic growth, creating significant economic, social and healthcare pressures, from a shrinking labour force to rising healthcare costs and shifting consumption patterns. It is imperative for the Government to act now to implement a comprehensive population growth strategy.
• Encourage childbearing: Allow a tax deduction for expenses incurred in employing one domestic helper or caregiver per year of assessment, subject to a cap of $30,000.
• Boost labour supply: Support women to rejoin the workforce and develop a local talent pool for elderly and rehabilitation care services.
• Improve healthcare services: Actively pursue collaboration with the private sector in delivering primary healthcare programmes.
• Reform the MPF system: Split the current 5% mandatory MPF contributions into 4% for MPF and 1% for a health insurance savings fund.
• Enhance land use planning: Formulate a senior housing policy and offer bonus plot ratios and land premium vouchers to incentivize senior housing development.
To read the submission, please visit https://bit.ly/4qHw3F0