The Hong Kong SAR Government’s 2026/27 Budget outlines a series of structural reforms designed to reinforce Hong Kong’s position as an international financial centre and gateway between Mainland China and global markets. While public attention often focuses on short-term tax concessions, the more consequential elements of this year’s budget relate to capital market reform, innovation industrialization, digital asset regulation, cross-border integration and corporate mobility.
For multinational enterprises, growth-stage technology companies, family offices and Web3 operators, these developments may materially influence strategic planning in Asia.
1. Salaries Tax Adjustments and Personal Allowance Increases
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The budget provides a one-off 100% reduction in salaries tax, profits tax and tax under personal assessment for the 2025/26 year of assessment, subject to a cap of HKD 3,000 per case. It also increases several personal allowances, including the basic allowance, married person’s allowance and child allowances. The deduction ceilings for elderly residential care expenses has been raised.
These measures are set out in the 2026/27 Budget Speech and subsequent Inland Revenue Department announcements.
While modest in fiscal size, these adjustments support talent retention and strengthen Hong Kong’s competitiveness relative to regional financial centers such as Singapore and Tokyo. For multinational corporations evaluating regional headquarters locations, predictability in personal taxation remains an important factor in executive relocation decisions
2. Expansion of Cross-Border Elderly Care and Healthcare Schemes
Starting from the 2026/27 financial year, the number of Community Care Service Vouchers for the Elderly (CCSV) will increase by 4,000 to a total of 16,000, while Residential Care Service Vouchers (RCSV) will rise by 1,000 to 7,000 (Source: 2026/27 Budget Speech - Caring for the Elderly).
Both schemes operate under a “money follows the user” approach, whereby eligible elderly persons receive means-tested subsidies to choose approved service providers. CCSV supports community-based services such as home care, day care, rehabilitation and nursing support, while RCSV enables eligible individuals requiring residential care to select participating care homes with government subsidies.
Cross-border arrangements are also being expanded. The Guangdong Residential Care Services Scheme now covers 26 residential care homes across nine Mainland Greater Bay Area cities. In addition, a two-year Medical Subsidy Pilot Arrangement provides an annual outpatient subsidy cap of RMB 10,000 and an inpatient subsidy cap of RMB 30,000 for eligible participants residing in participating institutions (Source: 2026/27 Budget Speech - Caring for the Elderly).
The Government will introduce arrangements allowing elderly beneficiaries under the Guangdong and Fujian Schemes to receive subsidies directly into designated Mainland bank accounts. Furthermore, the Elderly Health Care Voucher Reward Pilot Scheme has been extended to 2028. Under this program, elderly persons who accumulate HKD 1,000 in eligible primary healthcare services within a year may receive an additional HKD 500 incentive (Source: 2026/27 Budget Speech - Caring for the Elderly).
3. AI Industrialization and Technology Commercialization
Hong Kong is repositioning its artificial intelligence strategy from research-led funding toward industrial deployment and commercialization. An “AI + Industry Development Strategy Committee,” chaired by the Financial Secretary, will coordinate policy direction, initially focusing on life and health technology and embodied intelligence.
Under the InnoHK initiative, 16 AI and robotics laboratories have been established. A HKD 3 billion Artificial Intelligence Subsidy Scheme has supported nearly 30 projects spanning large language models, advanced materials and biomedical applications (Source: 2026/27 Budget Speech - Artificial Intelligence+).
The Hong Kong Artificial Intelligence Research and Development Institute is expected to commence operations in the second half of 2026, supporting research translation and AI governance development.
4. Hetao Shenzhen-Hong Kong Innovation Zone
Phase I of the Hong Kong Park at the Hetao Shenzhen–Hong Kong Innovation and Technology Co-operation Zone has commenced operations. The first two buildings have already attracted over 60 enterprises, with an occupancy rate of approximately 80%. Upon full completion of Phases I and II, the Park will provide around 200,000 square metres of gross floor area (Source: 2026/27 Budget Speech - Synergizing with...and Technology Development).
The Government will seek Legislative Council approval for a HKD 10 billion capital injection into the Park’s operating company. It is also pursuing deeper cross-border facilitation measures between Hong Kong and Shenzhen, including streamlined movement of personnel, materials, capital and data.
New “whitelist” and “green channel” mechanisms are proposed to facilitate cross-border transfer of research data and biological samples, enabling pre-approved institutions and projects to benefit from expedited procedures.
These measures are particularly relevant for biotechnology, medical device, clinical research and R&D enterprises seeking to integrate Hong Kong’s regulatory framework with Shenzhen’s industrial ecosystem.
5. Enhanced Support for Enterprises Expanding Internationally
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Government will strengthen support for enterprises pursuing overseas expansion through the “Go Global Task Force,” which will promote Hong Kong as a platform for Mainland enterprises to access international markets. A cross-sector professional services platform will also be established, bringing together legal, accounting, finance, testing and certification and market promotion services to support outbound businesses.
The Dedicated Fund on Branding, Upgrading and Domestic Sales (BUD Fund) will receive an additional HKD 2 billion injection, with the per-project funding ceiling increased to HKD 150,000. AI-related applications will be eligible for targeted support (Source: 2026/27 Budget Speech - International Trade Centre).
Export credit insurance will introduce a pilot scheme to support SMEs trading with higher-risk markets. Financing guarantee schemes covering up to 80% and 90% of loan amounts will have their application periods extended to March 2028, while principal moratorium arrangements will be extended to November 2026 (Source: 2026/27 Budget Speech - International Trade Centre).
These measures reinforce Hong Kong’s role as a structuring, financing and compliance coordination platform for enterprises expanding into ASEAN, the Middle East and other global markets.
6. Hong Kong Exchange (HKEX) Market Reform
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Hong Kong Exchanges and Clearing Limited (HKEX) will advance a new round of listing and trading reforms aimed at reducing listing and transaction friction and enhancing market competitiveness.
Planned measures include refining weighted voting rights (WVR) requirements, facilitating secondary listings by overseas issuers and further streamlining IPO processes. Consultation will be conducted on implementing a T+1 settlement cycle, and progress will continue on the development of a paperless securities market (Source: 2026/27 Budget Speech - Consolidating Existing Strengths).
In addition, structural product listing frameworks will be enhanced, and reforms to trading unit arrangements will be explored. HKEX will also work with regulators to advance the implementation of an uncertificated securities market regime.
These initiatives build on previous listing reforms under Chapters 18A (biotech) and 18C (specialist technology companies), with the objective of improving listing efficiency and strengthening Hong Kong’s appeal to growth-stage technology enterprises and international issuers.
7. Family Office Tax Framework Optimization
Hong Kong currently hosts over 3,300 single family offices, according to official figures. The Government intends to refine the tax concession regime for funds and family offices by expanding the definition of eligible “funds” to include fund-of-one structures. Certain digital assets, precious metals and specified commodities may be included as qualifying investments for tax exemption purposes (Source: 2026/27 Budget Speech - Consolidating Existing Strengths).
Previously, some single-family offices required additional structuring to satisfy technical fund definitions. Broadening eligibility may reduce structural inefficiencies and increase asset allocation flexibility.
The inclusion of digital assets within the qualifying scope also reflects regulatory acknowledgement of alternative asset classes within institutional portfolios.
8. Stablecoin Licensing and Implementation of OECD Crypto-Asset Reporting Framework (CARF)
The Government confirmed the introduction of a licensing regime for stablecoin issuers, alongside expanded regulatory oversight of digital asset trading and custody providers. Hong Kong will also implement the OECD Crypto-Asset Reporting Framework (CARF) and amend its Common Reporting Standard (CRS) rules accordingly (Source: 2026/27 Budget Speech - Exploring Emerging Sectors).
The CARF framework, developed by the Organization for Economic Co-operation and Development (OECD), aims to standardize automatic exchange of crypto-asset tax information across jurisdictions.
These measures enhance regulatory clarity and transparency in Hong Kong’s digital asset ecosystem. While compliance obligations will increase, regulatory certainty is often viewed positively by institutional investors and global counterparties.
9. Corporate Re-domiciliation and Intra-Group Restructuring Facilitation
Following the implementation of Hong Kong’s re-domiciliation regime, companies may relocate their place of incorporation to Hong Kong without establishing a new legal entity. Corporate continuity, contractual relationships and legal identity can be preserved.
The Government also plans to expand stamp duty exemptions for intra-group asset transfers to facilitate internal restructuring.
For multinational groups managing regional headquarters, holding companies or financing platforms, jurisdictional mobility has become strategically important amid evolving global regulatory and geopolitical conditions.
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Final Thoughts
The 2026/27 Budget reflects Hong Kong’s continued focus on strengthening its position as a global financial centre through initiatives in technology, capital markets and cross-border integration.
For businesses operating across Asia, these developments may influence decisions around investment structures, regional expansion and capital market access.
If you would like to explore how these policy developments may affect your business, feel free to connect with the team at Lotusia Group to learn more.
