Corporate treasury centres push 'to profit HK sectors'

Secretary for Financial Services and the Treasury Christopher Hui said on Saturday that a number of professional industries are expected to benefit from the government’s latest plan to promote the development of corporate treasury centres.

Under the recently unveiled proposals, the government aims to achieve this goal through measures such as a pre-approval mechanism for firms, granting them greater tax certainty, more favourable tax benefits, and compliance flexibility.

Speaking on an RTHK radio programme, Hui described the centres as “in-house banks” for multinational companies.

He said that while tax concessions have been available for such centres in the SAR for a decade, some companies have made it clear to the government that Hong Kong’s tax concessions were less attractive than those in other markets and that they were seeking greater certainty.

The rollout of the latest action plan, Hui said, shows that authorities are aiming to address such “pain points”.

Hui said that even though the action plan focuses on corporate treasury centres, cross-profession industries such as accounting and legal would also benefit.

“From the perspective of a firm, it has two ways of handling funds," he said.

"It can use banks, but at the same time it can also – through internal fund management – carry out fund allocation or centralised management.

"During the process, it will require many professional resources and support.”

As part of the plan, the government is also looking to sign comprehensive agreements on the avoidance of double taxation with more economies to help firms based in Hong Kong expand their business overseas.

The SAR has tax pacts with 58 economies, the latest being with Cyprus.

“Going forward, basically our strategy, and also our flow, is going to follow the market, in the sense that we have to follow where our clients are," Hui said.

"As many of these Chinese companies, international companies, go global through Hong Kong, they are going into various types of countries, including those along the Belt and Road.

“So this is exactly the area that we’ll focus on, among others, in order to develop a broader network for such treaties and also to enable such companies to take advantage of the lower taxation not just in Hong Kong, but also in those countries with which we have agreements.”

Edited by Robert Kemp ...