30/03/23

HONG KONG: ‘Perfect’ liveability, low taxes are advantages as global finance hub, says Paul Chan.

As published on scmp.com, Thursday 30 March, 2023.

Hong Kong’s Financial Secretary Paul Chan Mo-po on Thursday continued a charm offensive in Asia, telling a select group of entrepreneurs in Singapore that Hong Kong’s advantages spanned its low taxes to its liveability standards.

Speaking at the tail end of a packed schedule in Malaysia and Singapore, Chan said Hong Kong was a natural home for regional start-ups given an ecosystem that included government backing and a vibrant private equity sector that ranked number two in Asia – second only to mainland China.

“There is an ecosystem that includes peers. We organise different activities to enable players in the field to interact with. So being in Hong Kong, you won’t be alone,” Chan said.

In a lighthearted speech, Chan’s comments on Hong Kong’s tax regime drew laughter from the audience.

“We also have a very low and simple tax regime … we don’t have GST (goods and services tax), we don’t have VAT (value added tax) and we don’t have capital gains tax,” Chan said.

Other major financial hubs have a form of sales tax as part of their tax regime: Singapore has a good and services tax of 8 per cent, while Britain has a value added tax of 20 per cent.

Life was “not all about making money”, Chan noted, saying liveability was “perfect” in Hong Kong.
“If you like hiking, we have mountains, if you like water sports, we have excellent beaches,” he said.

“But apart from fine dining, you may perhaps like to explore culture. Go to the wonton noodle shops and the street stores. Wonderful experience. I could go on and on,” the finance tsar said, speaking without a script.

In a keynote speech on Wednesday at the Post’s China Conference: Southeast Asia 2023, Chan made a strong pitch for the city boasting its status not just as the natural international financial hub for mainland companies, but also among firms from overseas which were in emerging sectors within the so-called new economy.

While it was important for Hong Kong to continue to serve as the mainland’s international financial centre, it needed to “embrace and facilitate” the movement of global firms to the city too, he said.

Chan also emphasised that Hong Kong could become a regional hub for green technology and finance.