News Risk Management05 Sep 2018

Hong Kong:City goes all out to assert its hub status with tax and talent incentives

05 Sep 2018

Facing strong competition from other Asian cities, Hong Kong has announced compelling measures to preserve its status as a risk management, (re)insurance and marine hub. These include introducing tax incentives and a "Talent List" to attract businesses and professionals.

The government will introduce a number of tax incentives to promote marine insurance, reinsurance and specialty insurance as the city seeks to become a regional risk management centre, said Financial Secretary Paul Chan.

Speaking last week at the Hong Kong Federation of Insurers (HKFI) 30 Symposium, Mr Chan said the time is right to promote the insurance industry as he expects rising demand for the $1.7tn worth of infrastructure projects under development in Asia from now until 2030, reported the South China Morning Post (SCMP).

“We are also exploring further tax incentives and regulatory changes to spur the development of marine insurance, specialty insurance and reinsurance in Hong Kong. We will soon consult the industry on these new measures,” he said, without providing further details on the tax incentive structure.

Last year, a report by the Financial Services Development Council (FSDC) last year recommended the incentives to help Hong Kong close the gap with Singapore as a hub for reinsurance, captive insurance and marine insurance.

The Southeast Asian city-state has come up strongly as a competitor in marine insurance, with an attractive tax rate to insurers for writing both onshore and offshore marine risks.

These measures proved successful in attracting marine insurance businesses to set up in Singapore, noted the FSDC.

Mr Chan also said the Hong Kong Insurance Authority recently had reached an agreement with the China Banking and Insurance Regulatory Commission to allow Hong Kong based reinsurers to underwrite insurance business on the mainland.

Commenting on the Financial Secretary's speech, Mr Bernard Chan, executive councillor and head of Asia Insurance, said to the SCMP: “But a tax incentive alone is not enough. Singapore has been very successful in providing training and other support to establish an ecosystem for the marine insurance industry. Hong Kong needs to provide more education and other measures to build up the industry.”

“Talent List”

Separately, Hong Kong has also issued its first “Talent List”, which is part of the government’s aim to “attract quality people from around the world in a more effective and focused manner to support Hong Kong's development as a high value-added and diversified economy.”

The list which contains 11 professions including finance professionals in marine insurance, FinTech and the actuarial sector among others, has been drawn up after extensive consultation with the stakeholders.

The 11 professions are listed as follows:

(a) Experienced waste treatment specialists/engineers;

(b) Experienced management professionals in asset management including but not limited to trust fund management;

(c) Experienced professionals in marine insurance;

(d) Actuaries;

(e) Experienced professionals in Fintech;

(f) Experienced data scientists and experienced cyber security specialists;

(g) Innovation and technology experts in, but not limited to, the following fields: (i) pharmaceutical and life science/biotechnology; (ii) data engineering (e.g. data mining/data analytics), artificial intelligence, robotics, distributed ledger technologies, biometric technologies and industrial/chemical engineering, etc.; and (iii) materials science/nanotechnology;

(h) Naval architects;

(i) Marine engineers and superintendents of ships;

(j) Creative industries professionals in: (i) music: recording engineers, mastering engineers, and cutting/pressing engineers for Vinyl LP; (ii) digital entertainment: game development experts (game designers, game programmers and game graphic designers) and game producers; and (iii) films: various roles in pre-production, production and post-production and winner of designated renowned international film festivals; and

(k) Dispute resolution professionals specialising in resolving international financial and investor-state disputes, and transactional lawyers with specialised knowledge of and experience in cross-border transactions from investing or host states.

Immigration facilitation will be provided to eligible persons under the Talent List through the Quality Migrant Admission Scheme (QMAS) within its existing annual quota of 1 000. Successful applicants under the QMAS are not required to have secured an offer of local employment for settlement in Hong Kong. For applicants who meet the specifications of the respective profession under the Talent List, bonus marks will be given under the General Points Test of the QMAS.

The list, which the government said will be regularly updated to keep up with economic development and changing needs, will be publicised with the theme "Hong Kong • Talent Hub - Unlimited Opportunities" to attract targeted quality talents from around the world.

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