Brief overview of the key measures taken in Hong Kong to support business

It is no secret that the pandemic has brought a huge number of people, companies, and countries to the brink of survival. The fight against the epidemic and the introduction of lockdown have also had a strong impact on the economy of Hong Kong the Government of which, along with other countries, has developed a set of measures to support its citizens and companies. The most effective measures were the prolongation of repayment terms for facility lines and the deferral for interest payments, as well as the reduction of interest rates on current loans for small and micro-organizations.

In early April 2020, Hong Kong announced adoption of an economic support package of HKD 137.5 billion (USD 17.6 billion) to help individuals and industries affected by the outbreak of new virus.

We suggest that you familiarize yourself with the three main areas covered by the Support Package:

  1. Preservation of jobs.
  2. Support for organizations.
  3. Provision of means of living.

Preservation of jobs

Employer subsidy scheme

  • Provision of subsidies for payment of wages for those employers that agree not to dismiss employees.
  • Provision of a one-off subsidy in the amount of HKD 7,500 to self-employed persons.

Creation of jobs

  • Creation of about 30,000 temporary jobs.
  • Creation of about 10,000 jobs for public employees in 2020-21.

Measures to improve the situation in the labour market

  • Incentive measures for employees who acquire new skills.

Support for innovation and educational programs:

  • Provision of matching grants to upgrade professional skills of the personnel.
  • Provision of subsidies to organizations that provide educational services.
  • Provision of subsidies to construction companies for employee training.
  • Provision of subsidies for the implementation of remote business programs.
  • Provision of subsidies to the public and private business sectors for the implementation of projects on the use of 5G technologies.
  • Provision of subsidies for online settlement of disputes related to the new virus.

Support for organizations

Provision of subsidies to enterprises affected by the epidemic (with the participation of the Anti-epidemic Fund (AEF))

  • The first stage of the AEF operation: provision of subsidies to organizations operating in the field of food production and construction, retail stores, organizations and freelancers working in the field of art.
  • The second stage of the AEF operation: provision of subsidies to representatives of the tourism industry, organizations engaged in passenger transportation, catering companies, representatives of the aviation industry, educational institutions, representatives of the construction industry, each registered coach in the National Sports Association and sports organizations.

In addition, special attention is paid to measures to facilitate the flow of funds of enterprises:

  • Provision of a 100% special preferential loan at a low interest rate with a 100% guarantee from the Government.
  • Reduction in the income tax for 2019-20 by an amount not exceeding HKD 20,000.
  • Cancellation of the tariff rate for non-residential real estate in 2020-21.
  • Cancellation of the company registration fee in 2020-21.
  • Cancellation of the registration fee for the annual report charged by the Registrar of Companies for 2 years.
  • Granting 75% of the rent benefit to tenants of public premises and authorized owners.
  • Cancellation of 75% of the electricity fee for non-residential premises for 8 months.
  • Cancellation of 75% of the fee for water supply and water disposal for non-residential premises for 12 months.
  • Increase in the amount of non-reimbursable rent for facilities provided by the Leisure and Cultural Services Department.

Provision of means of living

Payments to citizens

  • Payment of cash in the amount of HKD 10,000 to each permanent resident of Hong Kong aged 18 and older.
  • Provision of a MTRCL (Mass Transit Railway Corporation Limited) preferential rate with a 20% discount for 6 months from July 1.
  • Provision of an additional payment in the amount of HKD 1,000 for each student receiving HKD 2,500 under a student grant.

Easing of the tax burden

  • Reduction of the payroll tax and personal income tax for 2019-20 by an amount not exceeding HKD 20,000.
  • The deadline for payment of the payroll tax, personal income tax and profit tax for 2018-19 is postponed (dates have not yet been determined).
  • Cancellation of the real estate tax for III-IV quarters of 2020, and I-II quarters of 2021.

As for the future, the Government announced that it would promptly adjust the support policy for small and medium-sized enterprises as the situation developed.

Yana Dimitrova

Deputy Director

Corporate Services

Korpus Prava (Hong Kong)

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