Chief Executive’s Policy Address 2024
“Reform for Enhancing Development and Building Our Future Together” is the theme of the 2024 Policy Address delivered by the Chief Executive, Mr John Lee, on 16 October. The 2024 Policy Address outlines the priorities for Hong Kong’s development and new growth areas, while consolidating our traditional strengthens and encouraging innovation in advancing reforms. Key highlights that may be of interest to the Central and Eastern European markets are summarised below.
Further liberalisation under Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA)
Mainland China and Hong Kong recently signed a new agreement in October 2024 under CEPA to introduce further liberalisation measures in a number of service sectors where Hong Kong enjoys competitive advantages, such as financial services, construction and related engineering services, testing and certification, telecommunications, motion pictures, television, tourism services, etc.
This new agreement under CEPA is set to create more favourable conditions for enterprises and professionals to explore the Mainland market. The agreement also includes important policy breakthroughs that will greatly facilitate Hong Kong companies to invest in the Mainland or engage in services trade with the Mainland.
First, facilitation measures such as “allowing Hong Kong-invested enterprises to adopt Hong Kong law” and “allowing Hong Kong-invested enterprises to choose for arbitration to be seated in Hong Kong” are included to provide greater certainty and security to Hong Kong investors in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA).
Secondly, the three-year period requirement on substantive business operations in Hong Kong to qualify as a Hong Kong Service Supplier for most sectors under CEPA is removed. This will greatly shorten the time for overseas enterprises and talents to enjoy the preferential treatment under CEPA after gaining a foothold in Hong Kong, allowing them to explore the massive Mainland market more timely and easily.
Of note is that CEPA is nationality neutral and does not impose any restriction on the source of investments. We strongly encourage overseas investors to establish businesses in Hong Kong as a springboard, or join forces with Hong Kong enterprises to make the full use of CEPA to better tap into the vast business opportunities in the Mainland.
Reduction of liquor duty
The Hong Kong Government has introduced a two-tier duty rate on liquor. For liquor with an import price over HKD 200 (about EUR 25), the duty rate on the portion above HKD 200 will be substantially reduced from 100% to 10%, while the duty rate for the portion of HKD 200 and below and liquor with an import price of HKD 200 or below will remain at 100%. The measure aims to promote liquor trade in Hong Kong, adding impetus to the development of high value-added sectors including logistics and storage, tourism as well as high-end food and beverage consumption.
Support for exhibitions
With a view to further consolidating Hong Kong’s position as an international trade centre, the Hong Kong Government will implement a new round of Incentive Scheme for Recurrent Exhibitions (ISRE 2.0) tentatively in July 2025 to continue to attract new and recurrent international exhibitions of large scale. The measure will not only continue to facilitate the connection between international buyers and suppliers with local SMEs, but also strengthen the mega event economy in Hong Kong.
Automatic extension of land leases
The newly enacted Extension of Government Leases Ordinance (Cap. 648) has taken effect since 5 July. It provides a new statutory mechanism to enable an essentially automatic extension of general commercial, residential and industrial leases in an orderly manner for a term of 50 years upon their expiry and without the payment of additional premium. The extension of land leases to years beyond 2047 in a simplified and efficient manner is beneficial to all property owners, residents and businesses. It will also enhance the business environment for Hong Kong’s economy and bolster bolstering investors’ confidence. The new legislation is a testament to the steadfast and successful implementation of “One Country, Two Systems” in Hong Kong.
Building an international gold trading market
The Hong Kong Government will promote the development of world-class gold storage facilities, facilitating the storage and delivery of spot gold by users and investors in Hong Kong, and driving demand for related services such as collateral and loan businesses, opening up new growth areas of the financial sector. A working group will take forward specific work, including strengthening the trading mechanism and regulatory framework, promoting application of cutting edge financial technology, and exploring with the Mainland authorities the inclusion of gold-related products in the mutual market access programme.
Further enhancing status as an international asset and wealth management centre
The Hong Kong Government will continue to support the development of the asset and wealth management industry and attract more global capital to be managed in Hong Kong, including facilitating the opening of new distribution channels for private equity funds through the listing on the Hong Kong Stock Exchange.
Moreover, starting from 16 October this year, the New Capital Investment Entrant Scheme (CIES), which aims to attracting asset owners to deploy and manage their wealth in Hong Kong, allows investment in residential properties provided that the transaction price of the single residential property invested in is no less than HKD 50 million (about EUR 6.2 million). In addition, investments made through an eligible private company wholly owned by an applicant will be counted towards the eligible investment with effect from 1 March 2025.
More convenient travels to Mainland China
It has now become much easier for all non-Chinese Hong Kong residents to travel to the Mainland for business exchanges. In July 2024, the Mainland authorities introduced a card-type document (viz. Mainland Travel Permits for Hong Kong and Macao Residents (Non-Chinese Citizens)) for facilitating visits of non-Chinese Hong Kong permanent residents to the Mainland for business and tourism purposes. Further to that, the validity period of the multiple-entry visas for foreign staff of Hong Kong-registered companies has also been extended to a maximum of five years to facilitate their visit to the Mainland. All the more reasons for overseas companies to establish in Hong Kong in order to enjoy all these policy advantages for grasping the unparalleled business opportunities in the Mainland.
There are many more new and exciting initiatives in the Chief Executive’s 2024 Policy Address which we could not list out exhaustively here. The 2024 Policy Address can be viewed in full here.