Hong Kong: Proposed concessionary tax regime to attract strategic industries and investments
Qualifying enterprises operating in five selected key sectors could enjoy a concessionary tax rate of 5% or half of the normally applicable rate.
The government announced in the 2026/2027 Budget a proposed concessionary tax regime to attract strategic industries and investments to Hong Kong.
Under the government’s proposal, qualifying enterprises operating in five selected key sectors (i.e., advanced manufacturing, research and development (R&D) in innovation and technology, headquarters activities, logistics and supply chain management, and finance) could enjoy a concessionary tax rate of 5% or half of the normally applicable rate (i.e., 8.25% for corporations) for a qualifying period of up to five years, subject to possible renewal.
The proposed concessionary tax regime is expected to become effective from the year of assessment (YoA) 2027/2028 upon the completion of the legislation process.
Read an October 2026 report prepared by the KPMG member firm in Hong Kong