Hong Kong Transport and Logistics Bureau: Optimize tax incentives for maritime services to consolidate Hong Kong's competitive advantage in the maritime industry.

On May 13th, Chan Mei-bao, the Director of Transport and Logistics of Hong Kong, stated in her opening remarks at the Legislative Council meeting regarding the motion on "Enhancing the Competitiveness of Hong Kong International Shipping Center" that in order to further promote the development of high value-added shipping services, the department will submit a draft legislation to the Legislative Council next month to optimize the existing tax preferences for the shipping industry and provide a half-tax concession system for bulk commodity traders, consolidating the business advantages of the Hong Kong shipping industry. As bulk commodity trade can drive demand for high-end shipping services, it is hoped that tax incentives will boost demand for shipping and professional maritime services in Hong Kong, while also enhancing branding and promotion efforts. Chan Mei-bao highlighted that the shipping and port industry has always been a key pillar of the Hong Kong economy. In 2023, this industry accounted for 1.8% of Hong Kong's GDP (519 billion Hong Kong dollars) and provided approximately 74,000 jobs, representing 2.0% of the total employed population. The shipping and port industry also facilitates foreign trade and plays an integral role in the logistics industry, forming a complementary industry chain that provides crucial support for Hong Kong's goods import and export, transshipment, and supply chain operations. Hong Kong has maintained its position as the world's fourth-largest shipping center in the "2025 XinhuaBaltic International Shipping Center Development Index" for the sixth consecutive year, reflecting its top-tier comprehensive strengths in port conditions, professional shipping services, and overall business environment. Faced with intense regional competition, Hong Kong must continue to enhance its port competitiveness and improve the dual-core strategy of the high value-added shipping services ecosystem, leveraging Hong Kong's unique advantages of being "backed by the motherland and connecting the world" to promote the sustainable development of the shipping industry. Chan Mei-bao proposed the development of high value-added shipping services. With its advantages of "One Country, Two Systems," bilingual common law, free economic environment, and simple tax system, Hong Kong has become an ideal location for global shipping service companies to set up business bases. Currently, there are approximately 1,200 companies in Hong Kong providing various services related to ports and shipping, including ship services, shipping finance, maritime insurance, maritime law, and arbitration. Among these companies, 3 of the top 10 ship management companies and 6 of the top 10 syndicate lenders for ship finance are headquartered in Hong Kong. Hong Kong is also one of the four designated arbitration places of the Baltic International Maritime Council. As the shipping service industry is highly internationalized with globally mobile operating models, in the face of fierce competition from other regions, Hong Kong must continue to consolidate and enhance the competitiveness of the shipping service industry and overall business environment to maintain Hong Kong's attractiveness and leading position as an international shipping center. Hong Kong introduced tax incentives for ship leasing from 2020 to 2022 and provided a half-tax concession for maritime insurance, ship management, agency, and brokerage businesses, which can drive shipping owners and shipping service companies to establish their presence in Hong Kong. Chan Mei-bao stated that the Transport and Logistics Bureau of Hong Kong will leverage the synergies between high value-added shipping services and financial services to promote the expansion of maritime insurance business in Hong Kong, providing a more diverse range of maritime insurance products and more reliable service guarantees for ship owners nationwide and globally. After 11 international mutual protection and indemnity organizations have operated in Hong Kong, the China Shipowners' Mutual Assurance Association officially established the Hong Kong Shipowners' Mutual Assurance Association during last November's "Hong Kong Maritime Week," becoming the first mutual protection and indemnity association headquartered in Hong Kong. Hong Kong's first "Shipping Special Risk Pool" has also been put into operation, further enriching Hong Kong's maritime insurance ecosystem. In terms of maritime law and dispute resolution, Hong Kong has recently made efforts to promote itself as the preferred location for maritime arbitration for ship owners and maritime enterprises in Hong Kong and mainland China. On the other hand, Hong Kong recently achieved a breakthrough - the International Mediation Institute headquartered in Hong Kong successfully resolved the first complex maritime contract dispute through mediation at the beginning of this month, which is of significant importance for the development of maritime legal services and dispute resolution in Hong Kong, demonstrating the strength and advantages of high value-added shipping services in Hong Kong. The Hong Kong Ship Registry has excelled in tonnage and fleet quality. The quality of Hong Kong-registered ships is widely recognized by international port state supervision. With a high-quality brand, the detention rate of Hong Kong-registered ships in ports in 2025 is only 0.79%, which is lower than 1%, significantly lower than the global average of 3.70%. To further enhance the competitiveness of the Hong Kong Ship Registry, the Transport and Logistics Bureau of Hong Kong will submit a revised bill to the Legislative Council within the year to reform the Hong Kong Ship Registry system, including introducing the "dual-flag ship system" to enhance the flexibility of the registration system and accommodate the diverse and flexible operational models of international shipping companies. Chan Mei-bao emphasized that Hong Kong's International Shipping Center is at a critical moment of transition from "quantity" to "quality," and Hong Kong will continue to cooperate with the industry in line with the national "Five-year Plan" for developing a new chapter for the shipping center.