Hong Kong’s Legislative Council has passed Inland Revenue Bill 2013 (Amendment) (No. 3) in order to provide a tax concession for captive insurers to enjoy a 50 percent reduction in the profits tax on their insurance business of offshore risks.
The concession, as proposed in the 2013-14 Budget, will take effect from the year of assessment 2013/14 onwards.
The secretary for financial services and the treasury, Professor K C Chan, said:
"The tax concession would provide further impetus for groups or enterprises to consider setting up captive insurers in Hong Kong to underwrite their own risks."
“Our fundamental strengths as an international financial centre includes a simple tax regime, rule of law, ready supply of talent, free flow of information and capital, and a highly open and competitive operating environment. Hong Kong is well positioned to establish itself as a domicile of captive insurance.”
Chan pointed out that the development of captive insurance would reinforce Hong Kong's status as a regional insurance hub, while making Hong Kong's risk management services more diversified and promoting the development of other related professional services including reinsurance, accounting, actuarial and legal services.
A previous article regarding the bill can be found here.
