Hong Kong tax reforms for treasury centres will lure multinationals, mainland firms: PwC

The proposed law will offer a five-year pre-approval for large companies with at least HK$100 million in annual revenue and six subsidiaries

The Hong Kong government’s plan to increase tax incentives for corporate treasury centres will be attractive to multinational and mainland firms considering such activities in the city, according to tax experts at PwC.

The government is soliciting public comment from late July until September 4 for a range of tax reforms, after which a bill will be submitted to the Legislative Council in the first half of 2027.

“Enhancing the relevant tax incentives will not only help attract more enterprises to establish corporate treasury centres in Hong Kong, but it will also inject fresh momentum into Hong Kong’s financial ecosystem,” said Rex Ho, Asia-Pacific financial services tax leader at PwC Hong Kong, in a media briefing on Friday.

A corporate treasury centre functions as an internal bank for a company with operations across multiple jurisdictions. It manages group cash flows, financing, investments and risk management, while helping centralise funding activities.

Rather than individual business units raising funds separately, a treasury centre can secure financing through bank loans or bond issuance on behalf of the wider group, often at a lower cost. It can also allocate capital more efficiently between subsidiaries and invest surplus cash centrally.

Hong Kong is competing with other financial centres, such as Singapore and Dubai, to attract multinationals and mainland Chinese firms to set up corporate treasury centres.

The city’s proposed reforms will introduce a two-tier system of tax concessions. Tier one is for smaller firms that need to hire at least two staff in Hong Kong with annual expenses of HK$2 million (US$254,777). Under this tier, the firms qualify for a 50 per cent tax deduction on profits made through interest income and other trading related to treasury operations.