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Port of Hong Kong can expect state aid in Policy Statement: Carrie Lam

2018-10-10

HONG KONG Chief Executive Carrie Lam said there would be state help contained in the coming Policy Address for the city's declining shipping industry as growth surges in Singapore and mainland Chinese ports.

She expected they would be measures in line with recommendations made in May by the Hong Kong Financial Services Development Council.


The council recommended the government cut profits tax for firms in ship leasing management and support services by half, meaning a concessionary tax rate of no higher than 8.25 per cent for those companies.


It also urged the government to negotiate more double-tax agreements with major shipping jurisdictions like Australia and Brazil.


Without the agreements, cargo carried on Hong Kong-registered vessels may be subject to freight taxes abroad, and Hong Kong companies doing business in other jurisdictions could be subject to a withholding tax on profits or interest remitted from the other jurisdictions.


It recommended setting up a financial institution to offer insurance for long-term shipping loans, and upgrading the Hong Kong Maritime and Port Board, or making a centralised office to oversee and coordinate shipping policies.


Hong Kong has in recent years suffered from the loss of some giant shipping companies which used to have headquarters in the city.


In 2009, China Navigation, whose parent company is the Swire group, moved its headquarters from Hong Kong to Singapore.


And last year one of Japan's biggest shipping companies, Mitsui OSK Lines, moved to Singapore after it was renamed Ocean Network Express in a merger.


Sabrina Chao, executive chairwoman of Wah Kwong Maritime Transport and a former chairwoman of the Hong Kong Shipowners Association, said: "The government should understand we need a level playing field in order to attract and retain shipping companies.


"With the inaction over the past few decades, a lot of shipping companies and supporting companies offering maritime insurance and shipping management services have already moved to Singapore."


She added: "It's never too late [to roll out measures], as Hong Kong has strong financing and legal services, which are a perfect match with shipping businesses. Hong Kong started its history as a port. It has a solid foundation."

 
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