The Hong Kong Special Administrative Region government’s new “Action Plan to Promote the Development of Corporate Treasury Centres in Hong Kong” comes at a pivotal moment for both global multinationals and leading Chinese mainland enterprises. In an environment shaped by higher interest rates, tighter global tax rules, and increasingly complex financial risks, precisely where companies choose to centralize their treasury functions will directly influence investment, jobs, and capital flows.
Hong Kong is making a clear statement of intent: It wants to be the preferred home for those corporate treasury centers (CTCs). CTCs — which manage group funding, liquidity, foreign exchange, and financial risk across multiple markets — have become a strategic asset for large corporations. They determine how efficiently capital is deployed, how risks are hedged, and how quickly a group can support new investments along its global value chain. For China and other major economies, the location of these centers matters for their long-term integration into global markets.
Against this backdrop, the action plan is both timely and forward-looking. It builds on Hong Kong’s existing corporate treasury regime, introduced in 2016, but goes further in sharpening the city’s tax and regulatory proposition and providing greater certainty to businesses. Rather than competing in a simplistic “race to the bottom” on tax rates, the plan aims to offer a coherent, rules-based, and internationally aligned framework that gives corporate decision-makers clarity and confidence.
As president of the Hong Kong Institute of Certified Public Accountants (HKICPA), I recently led the institute to publicly express strong support for this action plan. The accounting profession sees it as a practical road map to enhancing Hong Kong’s tax competitiveness while preserving the integrity of our system and complying with global standards. During a recent trip to the mainland, I also sensed strong interest from many enterprises in using Hong Kong more actively as their offshore financial and risk management platform. For them, this initiative is not an abstract policy; it is a concrete tool to support their “going global” strategies.
The appeal of the new plan rests on three main pillars:
The first is a more refined tax environment for corporate treasury activities. Hong Kong already offers a concessionary profits tax rate on qualifying treasury activities conducted by approved CTCs, which has helped attract groups from a range of sectors. The government is now moving to streamline and enhance this framework — for example, by clarifying and broadening the scope of qualifying activities and deductible interest, and by aligning the regime more closely with global tax developments. The aim is to ensure that tax is no longer a deterrent, but a supportive factor, when groups compare Hong Kong with other established treasury hubs in the region and beyond.
The second is greater certainty through upfront confirmation. One of the most important features of the action plan is a new preapproval or advance confirmation mechanism, under which corporations can seek assurance in advance that their proposed treasury structures and activities qualify for the concessionary regime. From my experience in corporate finance, private equity and initial public offering work, this sort of certainty is often decisive. When boards compare options such as Hong Kong, Singapore, or Dublin, knowing in advance how their respective treasury centers will be treated for tax purposes can make the difference between choosing one city or another.
The third pillar is a broader strategic framework— what I have described as the “4T” approach: tax revamp, tax agreements, targeted promotion, and talent and dialogue. Tax revamp refers to upgrading the CTC regime itself. Tax agreements point to the continued expansion and deepening of Hong Kong’s network of tax treaties, particularly with economies involved with the Belt and Road Initiative. Targeted promotion means focusing on sectors and geographies where Hong Kong’s proposition is strongest, such as mainland champions and Asian multinationals. Talent and dialogue emphasize the importance of a skilled treasury, tax and risk management workforce, and regular engagement between government, regulators and professional bodies like the HKICPA.
These policy efforts build on Hong Kong’s existing structural strengths. The city remains one of the world’s leading international financial centers, underpinned by the common law system, an independent Judiciary and a transparent regulatory framework. Its banking system is deep and globally connected. Its capital markets provide a full spectrum of instruments, from equity and bond issuance to derivatives and foreign exchange. For a corporate treasury center, this ecosystem is critical. It is not enough to have a favorable tax regime; the host city must also offer robust markets, reliable legal protections and access to specialist talent.
As global wealth and economic activity continue to gravitate toward Asia, the competition among financial centers will intensify. Hong Kong’s CTC action plan is a strategic move to stay ahead of that curve — not by copying others, but by leveraging its unique role as China’s international financial center and a global connector
Critically, Hong Kong also enjoys a unique positioning. As the country’s designated international financial center, Hong Kong serves as the springboard for mainland enterprises to manage their overseas activities and as a trusted gateway for international capital to participate in China’s growth. The development of the Guangdong-Hong Kong-Macao Greater Bay Area, the continued opening of the onshore capital markets, and cross-border arrangements such as Bond Connect and Stock Connect all reinforce this role.
We are already seeing how this plays out in practice. China Mobile, for example, has established a treasury center in Hong Kong to handle its worldwide financial operations outside the mainland. This allows the group to manage liquidity, funding, and currency risks in a consolidated and efficient manner, leveraging Hong Kong’s financial infrastructure and international connectivity. Many other mainland champions — in sectors from technology and infrastructure to consumer goods — are actively exploring similar models. The new action plan will give them an even more compelling reason to base such functions here rather than elsewhere.
The benefits of attracting more CTCs to Hong Kong would be broad-based. For the city, it would mean more high-value-added roles in finance, risk management, tax, legal, and technology, as well as greater depth and sophistication in its financial markets. For the mainland, it would provide a trusted offshore platform — under Chinese jurisdiction yet operating to international standards — to support the global expansion of its enterprises. For multinational companies, it would offer an efficient, rules-based hub in Asia that connects seamlessly with both global markets and the mainland economy.
Of course, an action plan is only the beginning. Execution will be critical. The regulators will need to implement the tax refinements and preapproval mechanisms in a way that is clear, predictable, and user-friendly. Coordination across government departments will be essential to avoid duplication and uncertainty. Professional bodies such as the HKICPA stand ready to support this process, by advising on technical details, nurturing the talent pipeline, and helping corporates understand how best to structure their treasury operations in line with the new framework. At the same time, corporates themselves should take this moment to reassess their treasury setups. Many groups still operate with fragmented cash management, decentralized hedging, and suboptimal funding structures across markets. The combination of a more competitive Hong Kong CTC regime, global tax changes, and rising financial risks makes this an opportune juncture to consider consolidation. For mainland enterprises with growing international footprints, and for global multinationals seeking a resilient Asian hub, Hong Kong now presents a stronger case than it has for many years.
The direction of travel is clear. As global wealth and economic activity continue to gravitate toward Asia, the competition among financial centers will intensify. Hong Kong’s CTC action plan is a strategic move to stay ahead of that curve — not by copying others, but by leveraging its unique role as China’s international financial center and a global connector.
If we can deliver on the promise of this plan — combining a competitive tax regime with strong institutions, talent and connectivity — Hong Kong will not only retain its status as a premier international financial center. It will also become the natural nerve center for managing the financial lifeblood of companies that are shaping the next chapter of growth in Asia and beyond.
The author is a member of the Chinese People’s Political Consultative Conference National Committee, president of the Hong Kong Institute of Certified Public Accountants, and adviser to the Ministry of Finance of the People’s Republic of China.
The views do not necessarily reflect those of China Daily.