The Hong Kong Budget 2025-26

The Hong Kong Budget 2025-26, delivered by Financial Secretary Paul Chan on 26 February 2025, outlines strategic measures to address fiscal challenges while fostering economic growth. With a forecasted deficit of HKD 67 billion, the budget emphasizes investment in technology, financial services, and business support. Here’s what businesses need to know.

Tax Relief and Business Incentives

• Profits Tax Reduction – 100% reduction in profits tax for 2024-25, capped at HKD 1,500 per business.
• Salaries Tax Reduction – 100% reduction, also capped at HKD 1,500 per taxpayer.
• Rates Concession – Up to HKD 500 for domestic and non-domestic properties in Q1 2025-26.

Support for SMEs and Market Expansion

• E-commerce Express Programme – Helping SMEs leverage digital platforms for growth.
• HKD 1.5 Billion for Expansion Funds – Injection into the BUD Fund and Export Marketing and Trade and Industrial Organisation Support Fund.
• SME Lending Taskforce – Over HKD 390 billion dedicated to SME financing from participating banks.

AI and Technology Investments

• HKD 1 Billion AI Research Institute – To promote AI research and establish Hong Kong as an AI hub.
• Manufacturing+ Scheme – HKD 100 million to upgrade production lines with up to HKD 250,000 funding per business.
• Technology Enterprise Channel (TECH) – New simplified listing pathway for high-tech firms on HKEX.

Talent Attraction and Workforce Development

• Immigration Policy Enhancements – Easing of rules for skilled worker entry while introducing a HK$600 fee for talent and investor schemes, with visas now costing HK$600–HK$1,300 to boost government revenue.
• New Capital Investment Entrant Scheme – More flexibility for international investors, providing opportunities for wealth allocation and investment diversification.
• Research Matching Grant – HKD 1.5 billion dedicated to support industry-academia collaboration.

Strengthening Financial and Trade Sectors

• Faster Payment Link with Mainland China – Enabling real-time cross-border transactions.
• HKEX Listing Process Enhancements – Streamlined vetting for market access.
• Hong Kong Global Financial and Industry Summit 2025 – To attract strategic enterprises and funds.

Infrastructure and Green Initiatives

• Infrastructure Investment – Focus on smart port development, electric vehicle subsidies, and smart city initiatives.
• Green Tech Hub – The Hong Kong Science and Technology Parks Corporation will develop a dedicated ecosystem for green innovations.

Conclusion

Despite a fiscal deficit, the 2025-26 budget prioritizes long-term economic stability, business expansion, and innovation. With significant investments in AI, financial services, and trade connectivity, Hong Kong aims to maintain its competitive edge in the global market.

How iNCUBEE Can Help

Navigating Hong Kong’s evolving business landscape requires expert guidance. Whether you need help with company incorporation, accounting, audit, or tax filing, iNCUBEE is here to assist. Contact us today to ensure your business stays compliant and takes full advantage of available incentives.