Following the first Policy Address of the Chief Executive of the HKSAR Government, Mr. John KC Lee, on 19 th October 2022, please find below the main announcements of the Policy Address:
- Regarding visas, several measures were announced:
o Graduates from the top 100 universities in the world will be able to obtain a two-year “Top Talent Pass Scheme” without having to find an employer first.
The ranking of the top 100 universities is yet to be disclosed. An annual quota of 10,000 visas will be in place for graduates with less than 3 years of work
experience in the past 5 years.
o People who earned more than HKD2.5 million in the past year will also be able to be able to be granted a two-year visa.
o Arrangements for Non-Local Graduates (IANG) permit will be extended to two years as well.
o Annual quota of the “Quality Migrant Admission Scheme” program will be suspended for 2 years
- Employers will be able to hire foreign workers without needing to prove local hiring difficulties in professions with shortage of local supply or vacancies.
- An Office for Attracting Strategic Enterprises (OASES), led by the Financial Secretary, will be launched to help companies in strategic important industries such as financial technology and life & health technology benefit from tailor-made plans to facilitate their setup and operation in Hong Kong and enjoy land and tax incentives
- A Co-Investment Fund of HKD30 billion will be established to attract companies to setup operations in Hong Kong by co-investing in their operations
- Non-permanent foreigners who buy properties in Hong Kong will be able to have their extra stamp duty (two stamp duties of 15% each) refunded when they become permanent residents (after spending 7 years in Hong Kong)
The implementation of some of the measures are yet to be announced.
In other news around the world:
– In France, companies can benefit from the participation exemption regime, allowing to exclude 95% of the net dividends received from subsidiaries from Corporate
Income Tax, as long as the parent company established in France owns at least 5% of the subsidiary’s share capital. The remaining 5% is subject to the Corporate Income Tax standard rate. The French tax authority considered that this 5% was not taxation, preventing companies to claim a tax credit in France for the withholding tax paid abroad. The Administrative Supreme Court ruled in July 2022 that it should be genuine taxation in France. Therefore, a parent company could claim a tax credit in France.
– In Hong Kong, the government proposed refinements of the Foreign Source Income Exemption (FSIE) to answer the concerns of the European Union over potential
double non taxation arising from tax exemption for offshore passive income in Hong Kong. Under the new proposals, four types of offshore passive income (interest,
income from intellectual properties, dividends and capital gain) would be chargeable to profits tax as they would be deemed sourced from Hong Kong. This amended FSIE regime would come into effect on 1 st January 2023.
– In the United Arab Emirates, the “golden visa” scheme was expanded to allow more employees to benefit from a 10-year residency. People who can benefit from the
extended golden visa need to have a minimum salary of Dh 30,000 (around 8,200 USD) and work in disciplines such as sciences and engineering, information
technology or business and administration, among others. Moreover, applicants need to be classified in the first (legislators, managers and business executives) or
second (professionals in scientific, technical and human fields) occupational level according to the Ministry of Human Resources and Emiratisation.
– In China, the Multilateral Instrument (MLI) was ratified and the country gave instrument covering Mainland China and Hong Kong Special Administrative Region
for their covered tax agreements. Despite opting out of most of the not required provisions under the minimum standard, this ratification remains an important step
in the implementation of the BEPS (Base Erosion and Profit Shifting) Action Plan in China.