Offshore work nets savings
The Budget proposes a 50 per cent profit tax concession for the offshore business of reinsurance companies.
The move aims to allow Hong Kong to compete in Asia and become a regional reinsurance centre, said Mr Tsang.
Commissioner of Insurance Alan Wong Chi-kong said the concession would allow companies to pay only eight per cent profits tax on their overseas business - lower than the 10 per cent tax rate in Singapore.
Three global reinsurance firms have expressed interest in setting up offices in Hong Kong. There are only about 20 reinsurance companies operating at the moment.
Mr Wong said only 40 per cent of local insurance business was in Hong Kong with the rest reinsured in the overseas market.
He hopes this will increase to 60 per cent.
The Hong Kong Reinsurance Forum convenor Kenneth Ng Yu-lam said a tax concession would be good enough to attract overseas reinsurance companies.