Hong Kong’s 2026–27 budget outlines a blueprint for high-quality growth.
Hong Kong’s Financial Secretary Paul Chan presented the 2026-27 Budget on 25 February 2026, setting out an ambitious agenda under the theme “Driving High-Quality, Inclusive Growth with Innovation and Finance.”
The timing is significant as this budget aligns with the commencement of China’s 15th Five-Year Plan, positioning Hong Kong as an important platform in the country’s continued, high-standard two-way opening-up. For businesses operating in or considering entry into Hong Kong, the measures announced carry substantial implications across tax policy, financial services, innovation and talent.
Reinforcing Hong Kong’s international financial hub status
The 2026-27 Budget reaffirms Hong Kong’s position as a leading global financial centre, with a significant focus on the internationalisation of the Renminbi (RMB). Measures include reducing currency conversion costs, attracting more RMB-denominated bond issuances and exploring the formation of an offshore RMB yield curve. The government intends to expedite the launch of Chinese Government Bond futures in Hong Kong, include real estate investment trusts (REITs) in mutual access schemes and add an RMB trading counter under the Southbound Stock Connect.
Securities market reforms are under consideration. Authorities plan to consult on revised requirements for weighted voting right structures and measures to facilitate secondary listings for overseas issuers. Implementation of T+1 settlement cycles and enhancements to structured product listing frameworks are designed to improve market efficiency. The government will also study the establishment of a one-stop, multi-asset class post-trade securities infrastructure.
For asset and wealth management, legislative enhancements to family office and fund tax regimes are expected this year, alongside a proposed stamp duty waiver for transferring non-residential properties into REITs seeking to list. On digital assets, licensing regimes for dealing and custodian service providers will be established by legislation. CMU OmniClear will launch a digital asset platform to support the issuance and settlement of digital bonds. Tax concessions for eligible institutions engaged in gold trading and settlement are also under exploration.
Alignment with the 15th Five-Year-Plan
Hong Kong’s location and international connections make it an important platform for Chinese outbound strategies and a vital hub for multinational corporations. The budget supports Chinese Mainland enterprises in their “going global” strategies by establishing a cross-sectoral professional services platform. This initiative leverages Hong Kong’s expertise in finance, legal services and trade to facilitate Mainland companies’ expansion into international markets.
The budget includes measures to attract high-calibre international talent, recognising that a diverse and skilled workforce is crucial for maintaining Hong Kong’s competitive edge as a global business centre. The focus on intellectual property trading, including tax deductions and support for patent valuation, strengthens Hong Kong’s appeal as a regional intellectual property trading centre and supports cross-border innovation and technology transfer.
Sector-specific initiatives and opportunities
The 2026-27 Budget places a strong emphasis on diversifying Hong Kong’s economic base and strengthening its innovation ecosystem.
The “AI+” initiative
The key concept of the budget is the “AI+” initiative, which aims to embed artificial intelligence across Hong Kong’s economy. A dedicated AI and Industry Development Committee will be established to guide strategic integration. Infrastructure investment will accelerate the development of the Sandy Ridge data facility cluster, strengthening the city’s digital capacity. HKD 50 million has been allocated to promote AI training and application courses, while HKD 100 million will support the government’s own digital transformation.
Life and health technology
Hong Kong is making a push to become a global hub for health and medical innovation. The budget commits to establishing an International Clinical Trial Academy by 2027, which is intended to attract world-class medical research and talent. HKD 500 million will be allocated to the Chinese Medicine Development Fund to support the sector’s growth and modernisation
New Industrialisation initiatives
To diversify its economic base beyond financial services, Hong Kong is investing in advanced manufacturing under its new industrialisation agenda. The budget allocates approximately HKD 220 million to establish the first National Manufacturing Innovation Centre outside the Mainland. A New Industrialisation Elite Enterprises Nurturing Scheme will also be launched to support high-growth companies in advanced manufacturing.
Business and investment support measures
The budget introduces several measures designed to foster a supportive business environment for both local enterprises and foreign investors. Key initiatives include:
Preferential tax policies
Proposed for specific industries and activities, potentially as low as half the standard rate or 5% for qualifying sectors. Amendments to tax law are to be introduced this year to provide greater certainty for businesses.
Advisory committee on tax policy
A new committee will be established to gather insights from commercial, industrial and professional sectors, ensuring that future tax policy aligns with market realities.
Cross-sectoral professional services platform
A new initiative is being developed to assist enterprises, particularly Mainland Chinese companies, with outbound expansion through coordinated professional services.
HKD 10 billion innovation and technology industry-oriented fund
Set to commence operations this year, this fund is designed to provide patient capital and strategic investment to foster the growth of I&T enterprises and attract foreign direct investment into high-tech sectors.
Tax deduction arrangements for intellectual property
Legislation will be introduced this year covering capital expenditure incurred in purchasing IP, making Hong Kong a more attractive base for IP-intensive businesses and enhancing its position as a regional intellectual property trading centre.
Enhanced tax concessions for maritime services
Proposed measures include half-rate tax concessions for eligible commodities traders and a revamp of ship registration arrangements.
New licensing regimes for digital asset service providers
To be established through legislation this year, offering regulatory clarity for businesses operating in the digital asset space.
Relaxed stamp duty relief for Corporate Treasury Centres (CTCs)
Criteria for intra-group asset transfers will be relaxed with effect from 25 February 2026, with further enhancement measures, including additional tax incentives, expected to be announced within the year.
New Industrialisation elite enterprises nurturing scheme
To be launched this year to support high-growth enterprises in the new industrialisation sector, providing resources and support to help them scale their operations.
Company re-domiciliation
Continued focus on streamlining processes for overseas companies looking to re-domicile in Hong Kong, leveraging the city’s stable legal framework and international connectivity.
Talent development and attraction
Recognising that talent is central to Hong Kong’s long-term competitiveness, the budget introduces several strategies to attract global professionals and develop local capabilities.
Three schemes form the core of the government’s attraction strategy as follows:
| Talent scheme | Key features |
|---|---|
| Top Talent Pass Scheme (TTPS) | Highly successful scheme that has already attracted over 100,000 global professionals. |
| Hong Kong Talent Engage (HKTE) | Expanding its network to provide comprehensive support for incoming talent and their families. |
| Task Force on Study in Hong Kong | A new task force to attract top international students to the city’s universities. |
On the local development side, the HKD 50 million AI literacy and training fund will support public organisations, technology companies and tertiary institutions in establishing AI application courses, seminars and competitions. Broader investments in STEAM education and vocational training complement these measures.
Fiscal outlook and relief measures
Hong Kong’s fiscal outlook is improving, with the Operating Account projected to return to surplus in 2025-26, earlier than expected. The Consolidated Account is also expected to remain broadly balanced after accounting for bond issuance. The government is committed to containing operating expenditure through a Productivity Enhancement Programme.
To ease pressure on residents, tax allowances will increase from the 2026–27 year of assessment across five categories: basic, single parent, married person’s, child and dependent parent and grandparent.
In terms of land supply, no general commercial sites will be offered for sale in the coming year given current vacancy levels. Land sale arrangements will be announced quarterly based on market conditions.
What Hong Kong-based businesses can do
The 2026-27 Budget reflects a measured balance between fiscal discipline and targeted investment. Businesses operating in or considering entry into Hong Kong should review eligibility for the new preferential tax rates and IP deduction arrangements before legislation is enacted. Engaging with the Advisory Committee on Tax Policy consultation process is recommended.
Those operating in high-tech sectors should assess qualifying criteria for the HKD 10 billion I&T Fund, while businesses in the digital asset space should monitor the new licensing regime for regulatory clarity. Companies conducting intra-group treasury operations in Hong Kong should also consider the relaxed Corporate Treasury Centre criteria.
