Hong Kong prepares new virtual asset rules and wider tax breaks

The proposal for the new tax concessions has been submitted to the legislative council.

Hong Kong is strengthening its virtual asset regulations and tax exemption regime to boost its financial sector’s competitiveness.

The government is preparing to roll out a virtual asset regulatory regime separate from its earlier announced trading and stablecoin regimes, said Joseph Chan Ho-lim, Under Secretary for Financial Services and the Treasury for the Government of Hong Kong SAR.

The regime will cover virtual asset dealing service providers, virtual asset custodian service providers, management service providers, and advisory service providers, Chan told attendees of the Hong Kong leg of the ABF IA Summit 2026 on 5 November.

“[With] these regulatory pillars in place, we believe we can help the industry to develop in a sustainable and responsible manner,” Chan said.

Chan also said that they are working to enhance their tax exemption regime to include pension funds and government funds.

“We are increasing the type of qualifying investment instruments to cover emission derivatives and allowances, insurance and securities, private credit investment, digital assets, and precious metals,” Chan said.

The legislative proposal has been submitted to the Hong Kong Legislative Council, and a clause-by-clause examination of these tax concession arrangements have been completed by the Legal Builds Committee, he said.

“These [are] very competitive enhanced tax concession measures will take effect starting from the year of assessment 2025 to 2026. We believe it will further boost our competitiveness,” Chan said.

Chan also outlined the government’s plans to grow their green finance ecosystem, noting the enormous demand for it in Hong Kong, China, and across Asia.

Hong Kong is now the biggest center for arranging issuance of green and sustainable bonds in Asia, Chan said, and the city now issues green bonds, and offers ESG funds and green equity indexes, amongst others.

“We will continue to continue to grow our green finance ecosystem to meet the need for channeling green capital into the green projects in Hong Kong, China, Asia, and beyond,” he said.

“Although we are leading the game in many segments, we know that there's no room for complacency. So we should sharpen our edge by reviewing our overall policy,” Chan added.