In a paper issued on Monday the Financial Services Development Council has set out a series of radical proposals, which aim to enhance Hong Kong as a competitive maritime centre.
Chief among the proposals are tax concessions for maritime and ship leasing management and maritime and shipping-related support services activity. The suggested profits tax rate to be set no higher than 8.25%.
The report, entitled “Maritime Leasing Paper”, also calls for qualified investor access to credit and liquidity enhancement products supported by sovereign-rated financial institutions; full consultation with the industry on implementation of a tax review package; talent development in the maritime cluster; further double tax agreements and; an upgrading of the powers of the Hong Kong Maritime and Port Board or, alternatively, the creation of a centralised Maritime Office.
The chairman of the FSDC, Laura Cha, said, “The maritime industry has been traditionally one of the pillar industries of Hong Kong but has shrunk in size over the last decade. As an international financial centre, Hong Kong is in a uniquely advantageous position to drive shipping-related financial services. Hong Kong needs to further develop its maritime cluster in view of the fierce competition from global maritime centres. Hong Kong must maintain and enhance its competitive advantages of the maritime cluster for the sustainable growth of the shipping industry.”
The proposals clearly seek to redress the ground Hong Kong has lost to Singapore over the past two decades. Executive chairman of Wah Kwong Maritime Transport and former chairman of the Hong Kong Shipowners Association, Sabrina Chao said: “In the past 20 years the majority of owners have left for Singapore. Following them are shipping finance institutes, trading desks and brokers,” Ms Chao said.
“Altogether, these people have shifted the industry’s centre of gravity from Hong Kong to Singapore,” she added.
The full version of the report can be downloaded from the FSDC website: www.fsdc.org.hk