2025–2026 Hong Kong Budget Summary and What It Means for Businesses

Yip Yuk Ming

7 mins read

Published:

30 June 2025

Updated:

28 October 2025

The budget is here. Is your business ready?

Hong Kong’s economy is forecast to grow between 2.5% and 3.5% in 2025, following a modest recovery in 2024. The government expects a fiscal deficit of HK$48.1 billion, with a return to a balanced budget projected by 2027–2028. These figures demonstrate a careful balance between promoting growth and upholding long-term fiscal discipline.

In this post, we break down the key highlights of the 2025–26 Budget and what they mean for you as you start a new business in Hong Kong.

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How the Hong Kong 2025–26 budget affects you

From tax regulations to sector-specific incentives, here’s how key areas of the budget will shape the business landscape in Hong Kong:

Key tax changes in the 2025 Hong Kong budget

The 2025–26 budget introduces several revenue measures aimed at maintaining fiscal stability while providing relief to individuals and businesses:

How to Start a Business in Hong Kong: 2025 Step-by-Step Guide

Salary tax and tax under personal assessment
- A 100% tax rebate, capped at HK$3,000, will be granted for the 2024–25 assessment year.
- This measure is expected to benefit around 1.9 million taxpayers.
Profits tax
- A 100% profits tax rebate, also capped at HK$3,000, will be offered to corporations for the 2024–25 year.
- Aims to ease the financial burden on businesses, especially SMEs.
Property tax and stamp duty
- Key relaxations in stamp duties on residential properties:
  - Buyer’s Stamp Duty and New Residential Stamp Duty have been abolished.
  - Special Stamp Duty shortened from 3 years to 2 years, reducing costs for early resale.
- This could encourage more property transactions and free up cash for businesses and individuals.
No increase in major tax rates
- The government has maintained existing rates for corporate and personal income taxes.
- No new broad-based taxes (e.g., GST) were introduced, reflecting a cautious approach to revenue generation amid recovery.

These measures aim to support spending power, boost economic confidence, and create a more business-friendly environment while managing the fiscal deficit carefully.

Public relief initiatives for sole proprietors and SMEs

The 2025–26 Budget introduces targeted relief measures to support individuals and SMEs, helping businesses stay afloat while encouraging consumer spending. Here’s how these initiatives can benefit business owners:

Tax rebates

A 100% rebate on salaries tax and profits tax, capped at HK$3,000, offers immediate financial relief to both individuals and companies. For business owners, this means lower tax burdens and more room to reinvest or manage day-to-day operations.

Rates concessions

Non-domestic properties will enjoy rates concessions of up to HK$1,000 per quarter for the first two quarters of 2025–26. This helps reduce overhead costs for retail shops, office tenants, and other commercial property users.

Electricity charges subsidy

Households will receive a HK$1,000 subsidy on electricity bills. While not business-targeted, this increases consumer disposable income, indirectly supporting local businesses through increased spending potential.

No new consumption voucher scheme

Although no new consumption vouchers are planned, the government’s focus shifts to other relief measures that offer similar economic benefits. Reduced living costs and tax rebates aim to sustain domestic demand.

Rental support for government property tenants

SMEs operating in government-owned premises will continue to benefit from rental concessions. This is especially helpful for startups and microbusinesses in public markets, industrial estates, or co-working hubs.

Extended SME financing guarantee scheme

The extension of the 80% and 90% Guarantee Products under the SME Financing Guarantee Scheme ensures continued access to credit. This provides vital liquidity for SMEs looking to stabilise or expand during uncertain times.

Sector-specific incentives

The budget signals increased investment in strategic sectors:

Green Tech: Funding continues for green innovation and low-carbon infrastructure. Businesses engaging in sustainability solutions may access grants or pilot opportunities.
Fintech: Support for financial innovation hubs and regulatory sandboxes persists, offering a nurturing ground for startups.
Tourism & Events: Continued investment in mega events and cultural tourism boosts revenue potential for hospitality, retail, and entertainment sectors.
Advanced Manufacturing: The development of the Northern Metropolis is expected to benefit high-end manufacturing and tech industries through land, logistics, and funding support.

These sector-specific boosts create opportunities for expansion, especially for firms aligned with government priorities.

Hiring and talent support for employers

To address workforce shortages and enhance competitiveness, the budget reinforces talent attraction programs, including:

Expansion of the Top Talent Pass Scheme.
Streamlining of visa applications for in-demand sectors such as I&T and healthcare.
Support for retraining and upskilling local workers to ensure workforce adaptability.

As an employer, you’ll benefit from a broader talent pool and potential government co-funding of hiring or training costs, especially in tech and professional services.

Regulatory and legal updates

In line with global standards, the government is ramping up ESG disclosure requirements for listed companies and financial institutions and audit and compliance standards, particularly for cross-border tax matters and digital asset regulation.

ESG disclosure requirements

The government is intensifying sustainability-reporting rules, especially for listed companies and financial institutions.
Firms will need to improve the breadth and depth of their ESG disclosures, embed ESG considerations into business strategy, and demonstrate progress toward national carbon-neutrality goals.

Audit and compliance standards

Expect tighter oversight of cross-border tax matters and emerging regulations on digital assets.
Companies should strengthen governance frameworks and internal controls to meet more stringent audit and compliance expectations.

Business impact of Hong Kong 2025–26 budget spending

The 2025–26 Budget outlines a targeted approach to spending, with key investments directed at areas critical to economic recovery and long-term sustainability. Below is a breakdown of the main expenditure areas:

Here is the revised table with accurate figures and citations:

Expenditure Area	Budget Allocation	Key Focus Areas & Implications
Education	$112.4 billion	Launching a new $1.5 billion Research Matching Grant Scheme. This can help create a better-skilled workforce and open up potential partnerships for your business with educational institutions.
Healthcare	$141 billion	The government is reviewing hospital development projects and supporting the creation of a third medical school. This means improved health access for your employees, which could reduce pressure on any private health coverage you offer.
Social Welfare	$139.1 billion	The budget increases support for elderly care with up to 12,000 Community Care Service Vouchers. It also provides extra social security allowances, which indirectly supports your employees who may be managing family or caregiving duties.
Infrastructure & Capital Works	$119.3 billion	The plan includes expediting infrastructure for the Northern Metropolis and developing railway links. These improvements can lead to better logistics and commuting for your business and create new opportunities in construction and urban services.
Innovation & Technology	$61 billion (for the broader “Economic” category)	A key focus is setting aside $1 billion for a new Hong Kong Artificial Intelligence Research and Development Institute. This offers significant opportunities for tech startups and gives you access to government R&D support.
Housing & Land Supply	Not specified as a single line item. (Falls under other categories like Infrastructure)	The government aims to make land available for about 80,000 private housing units in the next five years and projects a supply of about 107,000 new private units over the next 3-4 years. This can help ease housing stress for your staff.
Environment & Food	$53.5 billion	The budget includes a $300 million subsidy for fast-charging stations for electric vehicles and aims to set a Sustainable Aviation Fuel (SAF) consumption target this year. These initiatives encourage your business to adopt green practices, with potential incentives for being eco-friendly.
Culture & Tourism	$127 billion (for the broader “Others” category which includes tourism)	A specific allocation of $1.23 billion goes to the Hong Kong Tourism Board to promote a “tourism is everywhere” concept. This can lead to more foot traffic for your business if you are in the hospitality, retail, or creative sectors.

These allocations reflect a budget designed to balance economic development with social wellbeing, ensuring resilience in both the short and long term.

Budget comparison: 2024 vs 2025 for business owners

Category	2024-25 Budget	2025-26 Budget
GDP Growth Forecast	2.5% to 3.5% (for 2024)	2% to 3% (for 2025)
Fiscal Balance	Forecast consolidated deficit of $48.1 billion for 2024/25.	Forecast consolidated deficit of $67.0 billion for 2025/26.
Profits Tax Rebate	100% rebate, capped at $3,000 for the 2023/24 assessment year.	100% rebate, capped at $1,500 for the 2024/25 assessment year.
Rates Concession (Non-Domestic)	Concession for the first quarter of 2024/25, capped at $1,000.	Concession for the first quarter of 2025/26, capped at $500.
SME Financing Support	Application period for 80% and 90% Guarantee Products extended to March 2026.	The principal moratorium application period for the SME Financing Guarantee Scheme will last until November 2025.
Consumption Vouchers	Not mentioned in the 2024-25 Budget Leaflet.	Not mentioned in the 2025-26 Budget Leaflet.
Stamp Duty on Property	Canceled the Special Stamp Duty, Buyer’s Stamp Duty (BSD), and New Residential Stamp Duty (NRSD).	Adjusted the ad valorem stamp duty rates, increasing the maximum value of properties chargeable to a stamp duty of $100 to $4 million.
Sector Incentives	Key initiatives included allocating $3 billion for an AI Supercomputing Centre , injecting $1.4 billion into the Film Development Fund , and promoting green shipping and aviation.	Key initiatives include setting aside $1 billion to establish an AI Research and Development Institute , developing a GreenTech Hub , and allocating $1.23 billion to the Tourism Board.
ESG & Compliance	The Green and Sustainable Finance Grant Scheme was extended to 2027 to assist companies with sustainability reporting.	The government will implement the global minimum tax proposal (BEPS 2.0), which is estimated to bring in tax revenue of $15 billion annually.

How Sleek can help you handle the 2025–26 Hong Kong budget changes

Looking to make sense of how the new budget impacts your business plans? At Sleek, we stay ahead of Hong Kong’s latest fiscal updates so you don’t have to.

Whether you’re incorporating a new company or fine-tuning your accounting strategy, our experts are ready to guide you with the latest insights, ensuring compliance, clarity, and smarter decisions every step of the way.