Further tax concessions endorsed for maritime sector ahead of welcome return of Hong Kong Maritime Week
[Sponsored Article]
The Hong Kong Government and the Hong Kong Maritime and Port Board (HKMPB), an advisory body acting under the auspices of the Transport and Housing Bureau, are keenly aware that an international maritime centre such as ours has to promote the high value-added services to ensure smooth running of international trade as well as to maintain its status.
Hong Kong has been promoting the essential elements to nurture a vibrant ecosystem of maritime services. The territory has one of the largest concentrations of ship managers in the world in terms of ships under technical management; maritime law and arbitration is strongly represented; marine insurance comprises local and international players; 12 of the 13 liability insurers (P&I Clubs) have a presence here and the host of ship agents and brokers form a vital role in linking traders with international shipping.
Over the last 20 years, competition for the presence of these high value-added businesses from other maritime centres is the region has grown ever fiercer and has to be met head on.
It is for that reason in September that HKMPB endorsed the recommendations of the Task Force on Commercial Principals to offer half-rate profit tax concessions to specific shipping maritime services, namely ship management, shipping agency and shipbroking, with a view to attracting these businesses to establish a presence in Hong Kong. The initiative follows similar maritime tax concessions for ship leasing management companies and marine insurers which were successfully implemented in 2020.
Summing up the hoped-for effect of the milestone decision, Task Force convener and Chairman of the Hong Kong Shipowners Association, Bjorn Hojgaard said: "The new tax regime for ship managers, shipping agents and shipbrokers would help attract more shipping commercial principals and business investors here, and therefore further expand the maritime cluster. This is essential for promoting Hong Kong’s strategic position as an international finance, maritime and trade centre, as encouraged in the national policy. With this positive step, we hope tax incentives for other maritime sectors such as law firms and classification societies would follow too."
Hing Chao, Executive Chairman of Wah Kwong Maritime Transport Holdings, stands to be a beneficiary of the Task Force’s recommendations since his shipping company expanded into ship management. He welcomed the news:
“I am very pleased to see the tax concessions being extended to ship managers, agents and brokers, which is a significant step in consolidating our position as an international maritime centre and demonstrates our city's commitment to the maritime sector.”
Maritime and Aviation Training Fund
Tax concessions might grab the headlines. It is one thing to attract high value-added maritime businesses to our shores but their highly qualified practitioners need life-long training. The HKMPB has this covered, too. In 2014 the Maritime and Aviation Training Fund (MATF) was established with a HK$100m budget which was boosted to HK$300m in 2019. With this set up, scholarships and subsidies are offered to promising students, prospective in-service practitioners, as much as full tuition fee or 80% of the course and exam fee depending on the schemes applicable, in a broad range of disciplines including maritime law, logistics, and maritime insurance. On the maritime side, some 7,200 students and professionals have benefitted from the MATF largesse, among which around 150 undergraduate students are employed by maritime companies to take up a wide spectrum of jobs in the annual summer internship scheme every year.
To further support and enhance the manpower development for high value-added maritime services in Hong Kong, the MATF is on track to contemplate new schemes to incentivise the industry to provide structured training programmes for young recruits and to encourage young professionals through scholarship to pursue advanced qualifications beyond Hong Kong in specialties not locally available.
The MATF, asserted by Willy Lin, Chairman of the HKMPB’s Manpower Development Committee, is highly flexible in its approach to supporting the industry with new or adapted schemes, a common occurrence as the Fund recognises the dynamism of the maritime sector.
Hong Kong Maritime Week 2021
Hong Kong Maritime Week 2021 (31 October-6 November), one of the largest and most successful maritime events makes a triumphant return after a year’s hiatus. Over 30 industry-led and public events by over 40 local and international organisations will be held across the territory during HKMW 2021.
Chairman of the HKMPB’s Promotion and External Relations Committee, Agnes Choi, outlined the aims and ambitions of HKMW 2021:
“2020 has been a challenging year, not only to the shipping industry but also the entire world, it is time for us to put our heads together and identify solutions to face the challenges.
“Through the concerted effort and participation of the activity organisers, we aim at promoting Hong Kong as a preferred base for operating maritime business, providing a networking platform for achieving further synergy among members of the maritime cluster and advancement of professionalism in various port and maritime services, whilst raising public awareness of the economic significances of the port and maritime sectors and the prospects of a maritime career.”
Many of the events this year will be held in hybrid format. From headline-making conferences, in-depth forums, and seminars to industry visits, competitions, games and tours, the region’s premier maritime congress will help unite and showcase the strong maritime cluster before an international audience.