Hong Kong is considering easing property taxes and visa restrictions as authorities seek to curb a pandemic brain drain that’s threatened the city’s status as an international financial hub.
Chief Executive John Lee 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. Firms would no longer need to go through a lengthy process of showing they’ve made an effort to recruit locals for the roles before hiring from the mainland or abroad, the person said.
The government may also relax rules on a 15% stamp duty that non-resident 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 non-resident buyers would qualify.
A representative from the Hong Kong government didn’t immediately respond to a request for comment.
Hong Kong has been left reeling from almost four years of political turmoil and Covid border closures that largely cut the city off from the outside world. It’s 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.
New Visa
While the city 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 September report said long-time rival Singapore had overtaken Hong Kong to become Asia’s top financial center. Singapore’s population rose 3.4% in June from a year earlier, while Hong Kong’s shrank 1.6%.
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 non-locals to work in the city, 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 mainland and overseas workers and investment, the people said. The details could still change and some of the measures may 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 city for key professions would be one measure that would differentiate Hong Kong from Singapore, where firms are subject to a cap on foreign hires.
Still, Singapore has been relaxing some of its rules, including introducing flexible five-year work visas for foreigners paid at least S$30,000 ($21,000) a month to attract high earners, especially from Hong Kong. The new visa will allow holders to switch jobs and make it easier for their spouses to work.
Lee’s policy address will introduce “bold measures” to attract investment and skilled workers, Financial Secretary Paul Chan said last week. Chan cited multiple global headwinds as challenging the city, including rising inflation and interest rates, and the war in Ukraine.
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