Key Features of the 2025-26 Hong Kong Budget for Businesses

The 2025-26 Hong Kong Budget, unveiled by Financial Secretary Paul Chan, outlines several strategic measures aimed at bolstering the business environment in Hong Kong. Here are the key features that businesses should take note of:

 1. Financial Incentives for SMEs

The government has introduced financial incentives specifically targeted at small and medium enterprises (SMEs). These incentives are designed to stimulate economic recovery and encourage entrepreneurship. By providing financial support, the government aims to create a more dynamic business environment. This includes grants, low-interest loans, and subsidies aimed at reducing operational costs and fostering business growth.

2. Streamlining Regulatory Processes

To further support businesses, the government plans to streamline regulatory processes. This includes simplifying the vetting procedures for license applications, particularly for emerging industries such as technology and innovation. This move is expected to reduce administrative burdens and make it easier for businesses to operate in Hong Kong. By cutting red tape and improving efficiency, the government hopes to attract more entrepreneurs and investors to the city.

3. Support for Emerging Industries

The Budget places a strong emphasis on supporting emerging industries, especially technology and innovation. The government has earmarked $1 billion to establish the Hong Kong Artificial Intelligence Research and Development Institute. This initiative aims to promote the application of research outcomes and foster innovation. Additionally, there are plans to enhance support for fintech, biotechnology, and green technology sectors. These initiatives are expected to position Hong Kong as a global hub for innovation and technology.

4. Tax Measures

Several tax measures have been introduced to attract enterprises, capital, and talent. These measures include reviewing tax-deduction arrangements for the purchase of intellectual property usage rights and related transactions. Additionally, the Budget proposes tax incentives for research and development activities, which are expected to encourage businesses to invest in innovation. By creating a more favourable tax environment, the government hopes to attract more businesses to Hong Kong.

5. Investment in Public Services

The Budget also highlights strategic investments in public services to enhance the overall business environment. This includes significant investments in infrastructure, healthcare, and education. By improving public services, the government aims to create a more attractive and competitive environment for businesses to thrive. Better infrastructure will facilitate smoother operations, while improved healthcare and education systems will contribute to a higher quality of life for residents and expatriates, making Hong Kong an even more desirable location for businesses.

6. Focus on Sustainability

The 2025-26 Budget underscores the importance of sustainability. The government has introduced measures to promote sustainable growth that complements the national strategy. This includes advancing strategic industries and nurturing sustainable growth through various tax and non-tax measures. The Budget also includes initiatives to support green technology and renewable energy projects, aiming to reduce the city's carbon footprint and enhance environmental resilience.

In conclusion, the 2025-26 Hong Kong Budget presents a forward-looking strategy designed to secure the city's economic and social future. With a strong emphasis on fiscal sustainability, strategic investment in public services, and robust measures to stimulate economic recovery, the Budget sets the foundation for a resilient and competitive Hong Kong.

References:-

https://www.budget.gov.hk/2025/eng/pdf/Budget25-26_Eng_Leaflet.pdf