Hong Kong is considering easing property taxes and visa restrictions as authorities seek to curb a pandemic brain drain that has threatened the territory’s status as an international financial hub.
Hong Kong Chief Executive John Lee (李家超) could include the measures in his maiden policy address later this month, according to people familiar with the matter, who asked not to be identified because the deliberations are private.
One of the moves under consideration is to make it easier for Hong Kong-based companies to hire non-local workers in 13 priority professions, including asset management, fintech and environmental, social and governance financial services, one of the people said.
Photo: EPA-EFE
Firms would no longer need to go through a lengthy process of showing they have made an effort to recruit locals for the roles before hiring from China or abroad, the person said.
The government could also relax rules on a 15 percent stamp duty that nonresident property buyers need to pay, with part or all of the impost likely to be refunded after workers have stayed in Hong Kong for a certain number of years, some of the people said. It remains unclear what the minimum period is and whether all nonresident buyers would qualify.
Hong Kong has been left reeling from almost four years of political turmoil and COVID-19 border closures that largely cut the territory off from the outside world. It has led to an exodus of residents, many from key industries such as financial services, has plunged the economy into a prolonged recession, and devastated the travel and retail industries.
Even the fabled property market is cracking, with home prices falling and unsold apartments piling up.
Although the territory has relaxed some of its harshest travel restrictions, including last month scrapping mandatory hotel quarantine on entry to Hong Kong, doubt remains whether it can reclaim its past glory due to the slow pace of easing and reluctance to reopen fully. A report last month said long-time rival Singapore had overtaken Hong Kong to become Asia’s top financial center.
The Hang Seng Properties Index yesterday pared an earlier decline of 2.1 percent to trade slightly higher in afternoon trade as shares of developers including New World Development Co and Sun Hung Kai Properties Ltd rallied on the news. New World rose as much as 4 percent and Sun Hung Kai gained 2.6 percent.
In other moves to reverse the trend and entice workers back to Hong Kong, officials are considering a new form of visa to make it easier for nonlocals to work in the territory, the people said, without divulging details.
Other measures being discussed include cash subsidies for some highly skilled professionals and setting up a specific government branch to attract and manage Chinese and overseas workers and investment, the people said. The details could still change and some of the measures might not make it to Lee’s speech next week, they said.
Exempting companies from having to prove their efforts to recruit local workers first before looking outside the territory for key professions would be one measure that would differentiate Hong Kong from Singapore, where firms are subject to a cap on foreign hires.
Singapore has been relaxing some of its rules, including introducing flexible five-year work visas for foreigners paid at least S$30,000 (US$20,900) a month to attract high earners, especially from Hong Kong. The new visa would allow holders to switch jobs and make it easier for their spouses to work.
Lee’s policy address would introduce “bold measures” to attract investment and skilled workers, Hong Kong Financial Secretary Paul Chan (陳茂波) said last week.
Chan cited multiple global headwinds as challenging the territory, including rising inflation and interest rates, and the war in Ukraine.
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