The government of Hong Kong is aiming to slash the tax on captive profits by half, with help from the Inland Revenue.
The Inland Revenue (Amendment) (No. 3) Bill 2013 will also raise the deduction ceiling for contributions by employees or self-employed persons to recognised retirement schemes.
One of the bill’s objectives is to reduce the profits tax on offshore risks insurance business of captive insurers which are set up to underwrite risks of companies within the same group to which the captive insurers belong.
The proposed measure, an initiative announced by the financial secretary in the 2013-14 budget, is to attract more enterprises to establish their captive insurers in Hong Kong. The bill will be presented to the legislative council for first reading on 8 January 2014.
Professor Chan, the secretary for financial services, said: "With a sound regulatory regime and a broad talent pool, Hong Kong is well positioned to establish itself as a centre for captive insurance. Forming a cluster of captive insurers here will help the development of other related businesses, including reinsurance, legal and actuarial services."
To promote Hong Kong as a domicile for captive insurers, the financial services and the treasury bureau will hold a workshop on captive insurance on 14 January 2014. The event aims to provide a forum to discuss the operation of captive insurance and its contribution to risk management, as well as Hong Kong's regulatory framework for captive insurers.
