The jurisdiction’s Financial Services Development Council (FSDC) called for urgent action in a report setting out the policies, including tax measures, Hong Kong could adopt to improve its position as an insurance hub.
Laura Cha, the chairman of FSDC, said: “The recent departure and downsizing of the Hong Kong offices of various international insurance and reinsurance companies highlights the need for Hong Kong to further develop our insurance and reinsurance industry.”
She added that “further departures are likely in the near future if action is not taken” and that this would “combat the challenges from regional competitors, particularly Singapore”.
The report recommended that the government consider extending the 50% profits tax break currently given to professional reinsurers to the offshore non-life business assumed by direct insurers.
Tax incentives could also be offered to brokers to encourage the placement of insurance and reinsurance businesses in Hong Kong, and to Hong Kong insurers to place their reinsurance businesses with Hong Kong-registered reinsurers.
The FSDC also said the negotiation of double taxation agreements could be sped up with other countries, so that Hong Kong has an equally extensive double tax agreement network as Singapore and London.
The FSDC was established by Hong Kong’s government in January 2013 in response to the financial services industry’s call for a high-level government advisory body to support the sustained development of the industry.
