Hui Ching-yu: Hong Kong proposes relaxing the stamp duty concession criteria for associated bodies corporate, lowering the equity holding threshold from 90% to 75%.

On October 14, Secretary for Financial Services and the Treasury Hui Ching-yu moved the second reading of the Stamp Duty (Amendment) (No. 3) Bill 2026 at a Legislative Council meeting. The Bill seeks to implement the proposals in the 2026-27 Budget by relaxing the stamp duty concession criteria for intra-group transfers of assets between associated bodies corporate. Hui Ching-yu pointed out that under the existing Stamp Duty Ordinance, whether two bodies corporate are associated mainly depends on whether one has 90% or more of the issued share capital of the other. To keep pace with the development of business operating models, the Hong Kong government proposes to relax the criteria in two respects: First, expanding the scope of association. In determining whether two bodies corporate are associated, other direct or indirect beneficial interests and voting rights will also be considered in addition to issued share capital. This means that eligible limited liability partnerships and companies limited by guarantee without share capital can also benefit. Second, lowering the shareholding threshold. The relevant percentage of interest holding requirement will be reduced from 90% to 75%. The proposed measures will lower the cost of intra-group transfers of properties or securities and facilitate flexible corporate restructuring or business expansion. If the Bill is passed, the relaxed criteria will apply to instruments executed on or after February 25, 2026 (i.e. the date of this year's Budget announcement). Hui Ching-yu said he earnestly appealed to Members to support the Bill and implement this measure, which will help optimize Hong Kong's business environment and maintain the competitiveness of its tax regime.