Investments, tax breaks: what’s in it for you in Hong Kong’s budget 2026-27
South China Morning Post
by Natalie WongFebruary 25, 2026
AI-Generated Deep Dive Summary
Hong Kong’s budget for the fiscal year 2026-27, presented by Financial Secretary Paul Chan Mo-po, marks a significant shift with a HK$2.9 billion surplus, ending three consecutive years of deficits. The budget emphasizes strategic investments in major development projects and key industries, including artificial intelligence (AI), intellectual property (IP), and aerospace sectors. Additionally, it introduces tax breaks for technology companies and initiatives to boost tourism, particularly in the Northern Metropolis through Exchange Fund income. Chan also stressed the importance of prudent spending by capping recurrent expenditure at 2% for the next two financial years.
The surplus, which came sooner than expected, allows for targeted relief measures and industry funding. For businesses, tax incentives are being offered to attract technology companies, fostering innovation and economic growth. SMEs will benefit from a new $100 million fund aimed at enhancing productivity and digital transformation, while struggling firms can access an additional $50 million support package.
Residents are not overlooked, with measures to alleviate financial pressures through cash handouts, reduced travel taxes, and improved public services. The focus on strategic industries aligns with Hong Kong’s role as a global economic hub, aiming to strengthen its position in Asia and the world. These investments not only drive growth but also reinforce Hong Kong’s reputation as a competitive and resilient economy, making it a key destination for international business and innovation.
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Originally published on South China Morning Post on 2/25/2026