HONG KONG – Budget 2024/2025 : a recap of the support measures for your business

Published On - 2 May, 2024

Albert Hui Hong Kong

On February 28, 2024, the Financial Secretary of Hong Kong, Paul Chan, announced the Special Administrative Region’s (SAR) government budget for the fiscal year 2024 to 2025.

This 2024-25 Budget introduces a variety of support measures for Hong Kong companies. Here below a recap of the main ones:

  1. Tax relief for business

The Budget retained a 100% reduction in profits tax for 2023/24, subject to a ceiling of HKD3,000 (lower than the ceiling of HKD6,000 for last year), to ease the burden of profits taxpayers. The reduction will be reflected in the final tax payable for the year of assessment 2023/24.

  1. Tax deduction for reinstatement costs

The Budget proposed to allow tax deduction for expenses incurred in reinstating the condition of the leased premises to their original condition. The new deduction will take effect from the year of assessment 2024/25. It is good news for businesses operating in leased properties as they are generally required to reinstate the properties after the lease term and the reinstatement costs could be significant. Such costs are currently not tax deductible.

  1. SME Funding Schemes

The 2024-25 Budget expands incentive schemes aimed at supporting small and medium-sized enterprises (SMEs):

  • An extension of the SME Financing Guarantee Scheme, a loan matching scheme carried out by the Hong Kong Mortgage Corporation Limited Insurance Limited (“HKMCI”) to help SMEs and non-listed companies receive financing from approved participating lenders to meet business needs (Business Installations & Equipment, Working Capital, etc.). Under the updated scheme, the application period for the 80% and 90% guarantee loan under the SME Financing Guarantee Scheme, which were set to expire at the end of March 2024, will be extended for two years until the end of March 2026.
  • Enhancement of the Dedicated Fund on Branding, Upgrading, and Domestic Sales (BUD Fund), a fund originally set up to help Hong Kong-based companies seize opportunities in the Chinese mainland, but which has now expanded to all countries that have signed an Investment Promotion and Protection Agreement (IPPA) or Free Trade Agreement (FTA) with Hong Kong (38 countries in total, including France).

If you require more information about the Budget Speech 2024/25 of the Hong Kong Government or if you need support to apply for the SME Funding Schemes, please do not hesitate to contact us at contact@orbis-alliance.com.