Government Initiative And Incentive

There are several substantial primary allowances offered, for capital expenditure on prescribed assets, by the Government, including certain plants or machinery. Some significant allowances provided by Hong Kong’s Government include:

• An annual depreciation allowance of 4 percent:
  • is available for commercial structures or constructions utilized other than for industrial purposes; and
  • of the primary capital expenditure.
• A primary allowance of 20% of the industrial building’s cost (not including land cost).
• For the year in which the expenditure is incurred, a primary allowance of 60% of the capital expenditure on plant or machinery is granted.
• Capital expenditure on the restoration of a building (excluding domestic construction) is deductible uninterruptedly at a rate of 20% a year for five years.

Capital expenditure on environmental protection vehicles, machinery & installations benefits from a primary allowance of 20% in the year of assessment in which the capital expenditure was incurred. The remaining expenditure is deductible on a straight-line basis of 20% a year for the succeeding 4 years.

BUDGET 2020-21 – Key initiatives announced:

• Introduction of a low-interest loan with a 100% guarantee for enterprises.
• Maximum loan of HKD 2 million with a repayment period of up to three years.
• HKD 10,000 cash payout to Hong Kong permanent residents aged 18 or above.
• Business registration fees waived for 2020-21.
• Registration fees waived for company annual returns for two years.
• Inject HKD 345 million for a pilot subsidy scheme to encourage the logistics industry to enhance productivity through the application of technology.
• Increase the grant ceiling under the Technology Voucher Programme to HKD 600,000 and raise the Government’s funding ratio to 75%.