In a speech outlining the 2013/2014 budget, Hong Kong financial secretary, John Tsang Chun-wah announced that his office will seek to establish an independent insurance authority and pass more captive-friendly tax legislation.
Chun-wah said: “attracting a cluster of large-scale captive insurers in Hong Kong will promote the development of other related businesses, including reinsurance, making Hong Kong's risk management services more diversified.”
The proposed regulations will decrease the profit tax rate currently levied against the offshore business of captives, reducing the tax burden to the same levels enjoyed by reinsurance corporations. It is hoped that a lower tax burden will encourage more corporations to form captives and choose to domicile them in Hong Kong.
Chun-wah’s proposed insurance agency will, in theory, facilitate the development of Hong Kong’s insurance industry, protecting policyholders and aligning the local regulatory regime with international practices.
Elsewhere in the discussion of his new budget, Chun-wah highlighted the importance of maintaining strong connections with mainland China but reaffirmed the international nature of Hong Kong’s economy, promising to continue the crusade to “go global”.
Chun-wah said: “we treasure our core values of individual freedoms, the rule of law and a clean government, which align us with the international system. We shall support our enterprises by strengthening opportunities in traditional markets, exploring new areas of growth and opening up more new markets.”
Hong Kong, legislation, captive, insurance