Contemplating Tax Refunds for Foreign and Mainland Companies in Northern Metropolis, Hong Kong
In a recent address, Financial Secretary Paul Chan Mo-po outlined the plans for the Northern Metropolis, a megaproject that Hong Kong is pushing to develop. The project, initially announced in 2021, aims to transform 30,000 hectares of land near the mainland border into an economic growth engine and housing hub.
Chan stated that Hong Kong's tax rates are low and very competitive, but he did not confirm whether the tax rates for the Northern Metropolis would be lower than the current rates in Hong Kong. He did, however, suggest offering tax rebates as a strategy to attract industries to the Northern Metropolis.
Chan also emphasized the need for flexibility and creativity when attracting industries to the Northern Metropolis. He indicated that the industry park companies set up to run the project should not rely solely on government funding and should make use of market resources, such as bond issuance.
The Northern Metropolis is expected to be managed by one or more park companies, which will focus on attracting businesses in artificial intelligence, life and health technology, new energy, and financial technology. Chan expressed that there is an international trend against using low taxation to compete for investment, and he considers the use of low taxation to compete for investment as unfair and potentially not accepted by the international community.
Chan also suggested offering tax rebates to mainland Chinese and overseas companies to attract them to the Northern Metropolis in Hong Kong. He did not indicate any specific methods for rebating taxes other than it being an option.
The Northern Metropolis project will also serve as a housing hub. Chan plans to potentially grant tax incentives to technology and innovation enterprises to encourage their settlement in the Northern Metropolis. However, the details of these incentives have not been further specified.
In conclusion, the Financial Secretary has outlined plans for the Northern Metropolis, a project aimed at driving economic growth in Hong Kong. While tax rates for the Northern Metropolis have not been confirmed, Chan has suggested offering tax rebates as a strategy to attract industries. The project is expected to be managed by park companies that will focus on attracting businesses in various sectors, with a focus on technology and innovation. Chan has emphasized the need for flexibility and creativity in attracting industries to the Northern Metropolis, and has expressed concerns about the international trend against using low taxation to compete for investment.
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