Hong Kong
  • Singapore
  • UK
  1. Osome Blog Hong Kong
  2. What Do SMEs Need To Know About Budget 2021?

What Do SMEs Need To Know About Budget 2021?

What Do SMEs Need To Know About Budget 2021?

The COVID-19 pandemic has taken a toll on businesses in Hong Kong, posing multiple challenges to your business. With Budget 2021, the Hong Kong government has introduced various measures to help support you and your business, and facilitate long-term growth of all Hong Kong companies.

We know you are concentrating on sustaining and growing your business at the moment. If you are looking for ways to outsource accounting in Hong Kong, we can help you put your paperwork together, check numbers, and file annual returns on time. Our Chartered Accountants in Hong Kong answer fast and can help you optimise your taxes all from the comfort of your smartphone.

In the meantime, this is how the Hong Kong Budget 2021 can assist in your business growth.

Immediate One-off Support for Enterprises

The outbreak of the pandemic forced many businesses to completely shut down during Hong Kong's four lockdowns since last year's budget. This has impacted business growth, and the Hong Kong government recognised this by allocating approximately HK$9.5 billion to implement these measures:

  1. Two-Tier Profits Tax Regime Remains Unchanged

Under this tax regime, the profits tax rate for the first HK$2 million of assessable profits will remain unchanged at 8.25% for companies and 7.5% (half of the 15% standard rate) for unincorporated businesses.

  1. Waived Profit & Salaries Tax

According to the 2021-22 Budget, 100% of profits tax for the year of assessment 2020/21 is waived, subject to a ceiling of HK$10,000 per case.

According to the 2021-22 Budget, 100% of profits tax for the year of assessment 2020/21 is waived, subject to a ceiling of HK$10,000 per case.

Waive 100% of salaries tax and tax under personal assessment for 2020/21, subject to a ceiling of HK$10,000.

  1. Low-interest Loan

If you’re in need of a loan, the Hong Kong government is offering up to HK$6 million low-interest loan with a special 100% Guarantee Product with an extension in time and flexibility. The maximum repayment period is increased from five to eight years. Companies have till the end of 2021 to apply for the loan.

  1. Extension of the Pre-Approved Principal Payment Holiday Scheme

The Pre-Approved Principal Payment Holiday Scheme (PPPHS) is meant to ease the cashflow pressure faced by businesses who are affected by the pandemic. Banks in Hong Kong will offer principal payment holidays to covered corporate borrowers. The PPPHS will be extended by an additional six months, to October 2021.

The Pre-Approved Principal Payment Holiday Scheme (PPPHS) is meant to ease the cashflow pressure faced by businesses who are affected by the pandemic. Banks in Hong Kong will offer principal payment holidays to covered corporate borrowers. The PPPHS will be extended by an additional six months, to October 2021.

If your business falls under these requirements, you are eligible:

  1. Annual sales turnover not exceeding HK$800 million
  2. No seriously overdue loan payments
  3. Not in the process of ceasing operations, declaring bankruptcy or liquidation

Banks will inform eligible customers of the pre-approval under the Scheme and eligible borrowers are only requested to contact the bank within 14 days of the bank’s notice to confirm the detailed arrangements of the deferment.

  1. Waiver of Business Registration Fees

The Hong Kong Financial Secretary initiated waiving business registration fees in 2021 - 2022, which will commence from 1 April 2021. To effect this measure, the Hong Kong Government will introduce the legislative amendment into the Legislative Council as soon as possible.

  1. Support for Asset Management and Family Office Business

Plans to provide subsidies covering 70% of the expenses paid to local professional service providers for open-ended fund companies set up or re-domiciled in Hong Kong over the next three years, up to a limit of HK$1 million per open-ended fund company.

The government will also provide one-stop support to family office business and review relevant tax arrangements.

Stimulate the economy for businesses to thrive

In a bid to boost the local economy, the Hong Kong Government has implemented relief measures to encourage tourism and local spending.

  1. Facilitate Digitalisation

A total investment of HK$375 million will be allocated to the Hong Kong Trade Development Council (HKTDC) to boost its capability to proceed with digitalisation and organise online activities, to benefit businesses like yours in times where the Government is advocating for the public to stay home.

  1. More Funds to Enter Diversified Markets

To further support local businesses like yours, the Hong Kong Government will inject HK$1.5 billion into the Dedicated Fund on Branding, Upgrading and Domestic Sales (BUD fund).

Additionally, the funding ceiling for each company has been raised from HK$4 million to HK$6 million, in order to support businesses’ foray into the more diversified markets as they utilise the better protection offered by the International Physical Protection Advisory Service (IPPAs).

  1. Spurring Innovation and Technology

Since 2018, the Hong Kong Government has been supportive of the Innovation and Technology development and invested over HK$100 billion in this aspect. To further encourage growth in this area, Budget 2021 will implement measures including:

  • The injection of HK$9.5 billion for Innovation and Technology Fund by two yearly instalments.
  • Hong Kong Monetary Authority will consider enhancing its Fintech Supervisory Sandbox to minimise time for launching innovative financial products in the market

Thrive in a Time of Crisis

We know how difficult it is to navigate your business through the coronavirus crisis. Let Osome take some routine tasks off your workload, with experts who are always there for you. We offer accounting and corporate secretarial services in Hong Kong from wherever you are working from. They know what to file, which reliefs you’re entitled to, and handle the documents. Just message your question in a chat, they respond daily and answer to the point, so you can focus on the tasks that matter.

Share this post:

Tips to run your business smarter.
Delivered to you monthly.

You'll receive a verification email you'll have to open and confirm the subscription.

You might like it

Streamlining Payroll Process for SMEs: 5 Tips
Payroll

Streamlining Payroll Process for SMEs: 5 Tips

For a business to run smoothly, the payroll process must be streamlined and error-free. It is easy to streamline and optimize your payroll and other back-office processes within your SMB. Did you know that this can improve your cash flow?

A Guide to Offering Free Shipping Profitably
E-commerce

A Guide to Offering Free Shipping Profitably

Have you ever wondered who pays for the free shipping when you shop online? Turns out, it is possible to offer free shipping and have a profit margin at the same time.

A Guide to the Top e-Commerce Payment Gateways in Hong Kong
E-commerce

A Guide to the Top e-Commerce Payment Gateways in Hong Kong

Other than branding and marketing, these technologically savvy consumers are well acquainted with the Internet and convenient payment gateways and demand nothing less than a seamless e-commerce transaction.

8 Photography Tips for Your E-commerce Store
E-commerce

8 Photography Tips for Your E-commerce Store

Want to kickstart your start-up or bolster an existing online business? These 8 e-commerce photography tips could have a direct impact on small businesses owners in Hong Kong, take a look.

What To Do If I Want To Change My Company Name And Information?
Secretary

What To Do If I Want To Change My Company Name And Information?

If you want to change your company name, it’s relatively easy to do so in Hong Kong. And if there are other changes happening in your company - such as change in registered office address, new company director or secretary - you have 15 days to report these changes to the Companies Registry.

How To Hold Annual General Meeting
Secretary

How To Hold Annual General Meeting

The phrase “annual general meeting” (AGM) may conjure in your head an image of a hall filled with agitated shareholders grilling a row of executives seated on stage with difficult questions about the business, thanks to media coverage of AGMs in listed companies.

The Search for Niche Products and Getting Started Online
E-commerce

The Search for Niche Products and Getting Started Online

Launching an online business is not an easy achievement, with increasingly more entrepreneurs entering the online market space. Competition is fierce, product ideas are saturated, and consumers are getting more well-versed in sieving out the best prices for online products.

Deadlines To Keep In Mind To Stay a Compliant Company in Hong Kong
Secretary

Deadlines To Keep In Mind To Stay a Compliant Company in Hong Kong

Tax and filing deadlines are the bane for many company directors, but we can be fairly certain they’re here to stay. Whether you’re a Type A (“Deadlines are easy!”) or Type B (“When is my next deadline?!”) entrepreneur, we’ve put together this handy guide for you.

Annual Return Filing Dates To Take Note of for New Business Owners
Incorporation

Annual Return Filing Dates To Take Note of for New Business Owners

New business owners or even company officers may not be familiar with the necessary paperwork to deliver to local authorities for annual requirements. Everything is new. Starting a business in Hong Kong is already so tough and now there is paperwork to deliver to be compliant?

Osome Raises $16M in Series A Round for Its AI-based Accounting Platform To Expand Globally
News

Osome Raises $16M in Series A Round for Its AI-based Accounting Platform To Expand Globally

Osome has raised $16M in a Series A funding from a group of investors including Target Global, AltaIR Capital, Phystech Ventures, S16VC, Ace & Company and Peng T. Ong, who joined as an angel investor.

What Happens When You Avoid Tax in Hong Kong? A Guide to Tax Evasion Penalties
Tax

What Happens When You Avoid Tax in Hong Kong? A Guide to Tax Evasion Penalties

Hong Kong is well-known for its simple and straightforward tax regime, which makes the country one of the best places you could start a business in. However, despite the favorable tax rates, there are still cases of tax evasion which leads to legal consequences.

Osome Is Named Singapore Partner of the Year at Xero Asia Awards
News

Osome Is Named Singapore Partner of the Year at Xero Asia Awards

A confirmation of Osome’s commitment at innovation and customer service, this is simply a great way to end 2020. Find out more on how and why we won.

Tips to run your business smarter. Delivered to you monthly.

You'll receive a verification email you'll have to open and confirm the subscription.

We’re using cookies! What does it mean?