Hong Kong’s Strategic Measures to Restore Its Global Financial Hub Status

Hong Kong authorities have unveiled a package of measures to support the real estate market, as well as stimulate activity in the stock market. These steps are expected to help Hong Kong maintain its status as a global financial center.

Incentive measures are being taken taking into account the fact that “supply in the Hong Kong real estate market will grow in the coming years.

The Exchange also plans to introduce new listing rules in 2024 for companies focusing on research and development (R&D).
A vibrant stock market is vital to maintaining Hong Kong’s status as an international financial center and maintaining our competitiveness.

In addition, Hong Kong intends to promote greater use of the offshore yuan.

Hong Kong needs to rebuild its reputation as a global financial hub, damaged by the economic downturn, strict quarantine restrictions during the pandemic, and deteriorating US-China relations.

The number of American companies operating in Hong Kong has fallen for four years in a row and is at its lowest level since 2004, according to The Wall Street Journal.

Thus, for these purposes, on November 15, 2023, the Legislative Council of the Hong Kong SAR approved the Stamp Duty (Amendment) (Stock Transfers) Bill 2023 to reduce stamp duty rates in Hong Kong. The changes came into force and apply from November 17, 2023.

Stamp duty rates in Hong Kong are determined by the Stamp Duty Ordinance, Cap. 117. Currently, the stamp duty rate on transfer of rights to securities is 0.13% of the remuneration or share price. Stamp duty is paid jointly by the buyer and seller. Under the changes, the buyer and seller stamp duty rate has been reduced from 0.13% to 0.1%. At the same time, the stamp duty rate applicable to voluntary disposal in the absence of an agreement was reduced (from 0.26% to 0.2%).

The changes came into force and apply to all transactions in Hong Kong securities carried out from 17 November 2023.

In conclusion, Hong Kong’s proactive measures to bolster the real estate market, invigorate stock market activities, and introduce new listing rules for R&D-focused companies reflect a resolute commitment to maintaining its position as a global financial center. Recognizing the imminent growth in the real estate sector, the incentive measures showcase a forward-looking approach.

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