The Hong Kong government is planning to revise its tax regime in a bid to attract more capital and sharpen its competitive edge as an offshore renminbi center, the Hong Kong Economic Journal reported on Monday, citing sources.
The reform aims to attract more transnational companies to set up their corporate treasury centers in the territory through a tax reduction arrangement, according to the newspaper.
Financial Secretary John Tsang Chun-wah plans to unveil the proposal during his budget speech in February next year, and a public consultation will be undertaken thereafter.
A corporate treasury center serves as a company’s internal bank, handling its cash and foreign exchange transactions.
A strong rival to Hong Kong as Asia’s financial hub, Singapore in September cut the capital gain tax levied on foreign companies to 10 percent from 17 percent previously as part of moves to attract corporate treasury centers, the report said.
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