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Transport, Infrastructure and Advanced Manufacturing

With an enviable position in the heart of Asia, Hong Kong is the regional home to many local and global companies seeking to manufacture, source and trade products. Whilst manufacturing takes place in Mainland China and Southeast Asia, many choose Hong Kong as a base due to higher value functions including design, R&D, prototype production, technology applications, quality control, supply chain management, business development and product marketing. The city’s status as one of the world’s busiest and most efficient international container ports makes it the ultimate base for regional and global logistics.

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Hong Kong’s prime location has created significant opportunities within the industrial and transport/logistics sector: 

  • Aviation-The Hong Kong International Airport is one of the world’s busiest airports in terms of passenger and air cargo throughput, as well as air traffic movements. The industry will continue to benefit from the commissioning of the third runway in 2022, the infrastructure connectivity to the Greater Bay Area, and the integration of Mainland aviation network of the Zhuhai Airport with the international network of the Hong Kong International Airport to achieve greater synergy. Besides, Hong Kong has established a concessionary tax regime since 2017 for qualifying aircraft lessors and aircraft leasing managers to a tax concession under which only 20% of the net lease rentals are assessed. This regime reduces the profits tax from 16.5 percent to 8.25 percent in regard to aircraft leasing.  
  • Maritime-Hong Kong has established itself as a premier international maritime centre that is home to one of the world's largest shipping communities, owning or operating around 10 percent of the world's merchant fleet. The presence of a vibrant maritime cluster provides a comprehensive range of maritime services. Hong Kong is the world’s fourth largest shipping register in terms of gross tonnage. To promote the Hong Kong Ship Register, the Marine Department has set up regional desks at the Economic and Trade Offices of London, Shanghai, Singapore and Sydney, with more to come in North Asia and North America.  Besides, to strengthen Hong Kong’s role as a global maritime centre, the Inland Revenue (Amendment) (Ship Leasing Tax Concessions) Bill 2020 was passed in June 2020 to introduce concessionary tax measures for qualifying ship lessors and ship leasing managers. Under the new scheme, which applies to revenue earned on or after 1 April 2020, the tax rate on the qualifying profits of ship lessors carrying out operating lease and finance lease activities is 0 percent.  The tax rate on the qualifying profits of ship leasing managers is 0 percent or 8.25 percent.
  • Logistics-Combined with maritime and aviation industries and land freight transport, logistics plays a pivotal role in sustaining Hong Kong's economic growth. Increased trade with Mainland China especially the Guangdong-Hong Kong-Macao Greater Bay Area, and the continued growth in e-commerce, bolster the logistics development.  As the industry continues to prosper, the adoption of smart technology will open up new possibilities. The Government has rolled out the Pilot Subsidy Scheme for third-party logistics service providers to encourage their adoption of more technology and IT solutions.
  • Infrastructure - Infrastructure development enables Hong Kong to sustain economic development and meet the challenges of population growth. In the next few years, annual capital works expenditure is expected to reach HK$100 billion, and the annual total construction output will increase to around HK$300 billion. In this connection, the Lantau Tomorrow Vision aims to increase land supply meeting housing and other needs; and the Northern Metropolis aims to develop the northern part of Hong Kong into a metropolitan area for people to live, work and travel in the next 20 years. There are also projects of Energizing Kowloon East, railways, roads, airport expansion and so on enabling Hong Kong’s further development and fostering cross-boundary integration. With these mega projects underway, adopting modern construction methods and techniques, information technology and automation technology in Building Information Modelling (BIM), Modular Integrated Construction (MiC), prefabricated steel rebar, and other advanced technologies such as automated wall plastering machines helps increase productivity.
  • Advanced Manufacturing-The Government has been actively promoting “re-industrialisation” in recent years to develop advanced manufacturing industries that are based on new technologies and intelligent manufacturing, so as to identify a new impetus to the economy. The HK$2 billion Re-industrialisation Funding Scheme (RFS) has been rolled out to encourage manufacturers to set up new smart production lines in Hong Kong. The Advanced Manufacturing Centre (AMC), slated to open in mid-2022, will provide agile and smart production facilities. Re-industrialisation and Technology Training Programme (RTTP) subsidises companies to nurture talents. Advanced manufacturing will become an engine of Hong Kong’s economic growth in future.


Fast Facts
Favourable
tax regimes
Aircraft leasing: 20% of net lease rentals taxed at 8.25%; and ship operating lease & finance lease activities: 0%
$100 billion
Annual capital works
Annual capital works expenditure of over $100 billion in the next few years, creating over 300,000 jobs for the construction industry
$6.6 billion
Investment
The Advanced Manufacturing Centre provides re-industrialisation opportunities in I&T driven, critical, and traditional processes
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Benjamin Wong
Head of Transport, Infrastructure and Advanced Manufacturing
Contact General Enquiries
24/F, Fairmont House, 8 Cotton Tree Drive, Central, Hong Kong
Update on COVID-19: Please refer to HKSARG's website on the Fight Against the Coronavirus for the latest situation, health measures, travel advisories, a wide range of support measures available to businesses and a list of FAQs.

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