PricewaterhouseCoopers (PwC) tax experts say Hong Kong’s proposed tax incentives for corporate treasury centres will attract multinational and mainland companies.
This was outlined in a South China Morning Post (SCMP) report, which said the government launched a public consultation on a broader package of tax reforms, running from late July to 4 September.
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A draft bill is scheduled to go before the Legislative Council in the first half of 2027 (H1 2027).
PwC Hong Kong Asia-Pacific financial services tax leader Rex Ho was quoted by the SCMP as saying: “Enhancing the relevant tax incentives will not only help attract more enterprises to establish corporate treasury centres in Hong Kong, but it will also inject fresh momentum into Hong Kong’s financial ecosystem.”
Corporate treasury centres operate as internal banks for companies with cross-border operations.
They handle group-wide cash management, funding, investments and risk management, consolidating these activities within a single platform.
Instead of each business unit arranging its own borrowing, a central treasury can secure funding through bank loans or bond offerings for the wider group, often at lower cost, the report highlighted.
It can also redistribute capital among subsidiaries more efficiently and manage surplus liquidity centrally.
Hong Kong is competing with other financial hubs including Singapore and Dubai to incentivise global and mainland enterprises to establish such centres.
The proposed changes would introduce a two-tier structure for tax concessions.
The first tier targets smaller companies. To qualify, companies must employ at least two staff in Hong Kong and incur annual local expenses of HK$2m ($254,777).
Eligible businesses would receive a 50% profits tax deduction on interest income and other trading linked to treasury activities.
The second tier is aimed at larger groups and would offer a five-year pre-approval mechanism.
Companies must generate at least HK$100m in annual revenue, have a minimum of six subsidiaries, spend more than HK$4m a year in Hong Kong and employ at least two professionals locally.
Approvals under this tier could be renewed if both qualifying expenditure and staff numbers in Hong Kong increase over each subsequent five-year period.
According to China’s state-owned Assets Supervision and Administration Commission, central state-owned enterprises now hold nearly 8tn yuan ($1.1tn) in overseas assets across more than 180 countries and regions, covering in excess of 10,000 projects and entities.
