Hong Kong's First Five-Year Plan and 2026 Policy Address Announced KPMG: Hong Kong Transforms into a "Super Partner" to Actively Serve the Country's Development Priorities

Hong Kong SAR Chief Executive John Lee Ka-chiu announced Hong Kong's first Five-Year Plan (2026-2030) and the 2026 Policy Address. Li Lingde, Deputy Head Partner of KPMG China's Greater Bay Area Strategy and Development Center, said that under the national 15th Five-Year Plan, Hong Kong is moving further from a "super connector" toward a "super partner," transitioning from integrating into the country's overall development to further leveraging its own advantages and actively serving the country's development priorities. Backed by the Guangdong-Hong Kong-Macao Greater Bay Area, enterprises can combine their own expertise and existing networks with Hong Kong's advantages as an international financial center and its mature professional services to further expand their business footprint. Hong Kong's professional services in law, accounting, and other fields have a deep foundation, are familiar with the mainland market, and possess an international perspective, enabling them to provide professional support for enterprises' cross-border development. The Greater Bay Area's industrial hinterland, combined with Hong Kong's international platform, allows enterprises to more effectively connect cross-border industrial chains, access mainland and overseas resources, seize two-way development opportunities, further expand their business, and enhance competitiveness. He Jiahui, Tax Partner at KPMG China, pointed out support for advancing "finance + trade" and optimizing tax concession measures to further enhance Hong Kong's attractiveness for mainland and overseas enterprises establishing corporate treasury centers. According to the latest consultation on reforms to the tax concessions for corporate treasury centers, the government is considering introducing a pre-approval mechanism, which would be an innovative breakthrough in Hong Kong's tax system, helping provide tax certainty for target enterprises and attracting high-quality business and job opportunities to Hong Kong. It is recommended that the government publish more details on the pre-approval criteria as soon as possible and maintain ongoing communication with the industry to ensure that the tax concessions meet enterprises' actual needs and promote Hong Kong as a regional treasury and trade hub. KPMG stated it welcomes the Chief Executive's proposal to implement a half-rate tax for physical commodity traders, believing this will help drive Hong Kong's high value-added maritime industry, including related demand for ship leasing, ship agency, and marine insurance. It is recommended that in the early stage of the policy, the government give more flexibility to the requirement for taxpayers to use local service providers, so that more enterprises can benefit from the tax concessions and further consolidate Hong Kong's position as a regional shipping and trade center. Through an investment promotion concession package, the government provides a 5% or half-rate concessionary tax rate for high value-added enterprises establishing regional headquarters, which helps enhance Hong Kong's regional competitiveness. It is recommended that the government further clarify criteria such as investment scale and the number of local jobs created, giving enterprises intending to come to Hong Kong greater confidence and budgeting certainty. In addition, given that multiple jurisdictions globally are implementing a global minimum tax rate, it is recommended that the government simultaneously consider accompanying measures to ensure Hong Kong's tax concessions remain attractive.