The Hong Kong Chief Executive’s 2023 Hong Kong Policy Address

Hong Kong Chief Executive John Lee delivered his second Policy Address on 25 October. Titled “A Vibrant Economy for a Caring Community”, which was primarily focused on stimulating Hong Kong’s economy, which contracted 3.5% last year, and attracting back international businesses and capital.

Key business-related measures contained in the address included proposals to attract strategic enterprises and quality talents by:

• Developing a ‘headquarters economy’ to attract enterprises from outside Hong Kong to set up headquarters or corporate divisions in Hong Kong and exploring feasible measures o facilitate Chinese Mainland enterprises to establish in Hong Kong.
• Encouraging companies to re-domicile to the Hong Kong SAR by introducing a re-domiciliation regime under which a company incorporated outside Hong Kong could apply to change its place of incorporation to Hong Kong while maintaining its legal identity as a corporate body, subject to certain conditions. The legislative proposals are due to be introduced in the first half of 2024.
• Expanding the coverage of universities under the Top Talent Pass Scheme by adding eight leading institutions from the Chinese Mainland and overseas to the list of eligible universities.
• Launching a Capital Investment Entrant Scheme to allow eligible investors who make investments of HKD30 million (c. USD3.85 million) or more in assets, excluding real estate, to apply for entry into Hong Kong. Further details are to be announced before the end of 2023.
• Establishing a physical office for Hong Kong Talent Engage to formulate talent recruitment strategies and provide support for incoming talents.
• Introduce a Multiple-entry Visa to the Mainland for foreigners working in companies registered in Hong Kong.
• Establish a ‘Vocational Professionals Admission Scheme’ to enable eligible participants to stay in Hong Kong for one year after graduation to seek jobs.

The Address also contained a series of measures to foster the economic growth and development in specific sectors, including:

• Reforming the Growth Enterprise Market (GEM) market to streamline the transfer mechanism to the Main Board and add a new listing route for R&D-focused companies, with a plan to implement the revised Listing Rules in the first quarter of 2024.
• Deepening mutual access with the Chinese Mainland financial market by including Renminbi (RMB) counters under the Southbound Trading of Stock Connect to facilitate the trading of Hong Kong stocks in RMB, enhancing the Bond Connect programme and enabling Hong Kong’s limited partnership funds to be qualified under the Qianhai Qualified Foreign Limited Partnerships to participate in private equity investment in the Chinese Mainland.
• Launching a dedicated proof‑of‑concept subsidy scheme for green Fintech in the first half of 2024 to promote the development of technological solutions and provide early‑stage funding support for pre‑commercialised green Fintech.
• Establishing a new integrated fund platform in Hong Kong within the next year to expand Hong Kong’s fund distribution network, enhance market efficiency and lower transaction costs.
• Implementing a risk-based capital (RBC) regime for the insurance industry in Hong Kong in 2024.
• Setting up the New Industrialisation Development Office to promote new industrialisation in Hong Kong.
• Setting up a HKD10 billion ‘New Industrialisation Acceleration Scheme’ to provide financial assistance for enterprises in life and health technologies, AI and data science, advanced manufacturing and new energy technologies.
• Expediting the establishment of a supercomputing centre to foster AI development.

An inter-departmental E-commerce Development Task Force will also be established to assist SMEs in developing e-ecommerce to implement policies assisting SMEs in developing e-commerce business on the Mainland.