Tax concessions and financial incentives needed to support innovation in HK

Up to HK$18 billion in funding will be injected in various fields in a timely manner.

By Kareyst Lin
Jan. 23, 2017

Tax concessions and financial incentives must be explored as Hong Kong needs a new mentality to support the innovation and technology industry amid stiff competition, said Leung Chun-ying, Chief Executive of Hong Kong, in his final policy address.

Leung also added that providing hardware alone would not be enough for Hong Kong to drive innovation and technological development, according to a report by the South China Morning Post (SCMP) on 18 January 2017.

He also hinted that the current financial regulatory framework was too rigid. "Hong Kong in the past has been competing with her arms tied up," Leung said.

Generous funding - amounting to HK$18 billion - will be injected in various fields in a timely manner. For example, the University Grants Committee has been asked to complete a review of fund allocation within one year to facilitate scientific research. In addition, the HK$2 billion Innovation and Technology Venture Fund will accept applications from startups by the middle of the year.

"The Hong Kong government could help foster more private sector investment into seed, pre-seed or Series A funding for startups," David Rosa, Chief Executive of fintech startup Neat, told SCMP. "It would be great if the government could provide funds to venture capital firms that can identify and invest in startup companies [on behalf of the government]."

Plots of land in Hong Kong have also been earmarked for technology hubs, such as the ones at Liantang/Heung Yuen Wai Boundary Control Point, and the Lok Ma Chau Loop.