HK unveils major SME, economic diversification measures

SME loan guarantees will be extended by two years.

Chief Executive John Lee has announced a series of measures to support small and medium enterprises (SMEs), promote economic diversification, and protect local workers.

In his 2025 Policy Address, Lee said the government will extend the 80% Guarantee Product under the SME Financing Guarantee Scheme by two years and prolong the principal moratorium by one year.

To ease business operations, water and sewage charges for non-domestic accounts will be cut by 50%, capped at $10,000 and $5,000 per month, benefiting 260,000 accounts, whilst trade effluent surcharges will drop by 50%, aiding 35,000 catering businesses.

Fees for new or renewed licenses, including those for hawkers, food businesses, agriculture, fisheries, and liquor, will be waived for one year, assisting over 60,000 licensees.

An additional $30b will be added to capital works projects over the next two to three years to support economic growth and the construction industry. Restaurant licensing will be streamlined, and approvals for outdoor seating arrangements will be accelerated.

The government will inject $1.43b into the Dedicated Fund on Branding, Upgrading & Domestic Sales (BUD Fund), expanding coverage to eight more economies, including Belt & Road countries.

Local e-commerce businesses will receive more financing support, and free buyer credit checks will be expanded.

A new “Economic & Trade Express” platform will help SMEs explore overseas opportunities and attract foreign investment. Cyberport’s Digital Transformation Support Pilot Programme, the “Creativity • E-commerce – Beyond Limits” initiative, one-stop business matching services, and a two-year pilot scheme for patent evaluation will further support innovation and technology SMEs.

To promote economic diversification, a unified brand for local agricultural and fisheries products will launch by mid-2026, and new fish culture zones with deep-sea cages aim to increase mariculture production tenfold in 15 years.

The government also plans Hong Kong’s first environmentally friendly multi-storey pig farm in Lo Wu, will advance Agricultural Park Phase 2, and promote leisure farming and fisheries.

A new licensing arrangement will allow dogs in certain food premises, tapping into the city’s pet market.

On labour protection, the government will prioritise local employment and combat illegal employment.

Employers importing waiters, waitresses, or junior cooks under the Enhanced Supplementary Labour Scheme (ESLS) must extend recruitment from four to six weeks and attend weekly job fairs, whilst stricter manning ratios will be enforced.

A dedicated hotline and strengthened inter-departmental enforcement operations will target illegal employment, and legislation will improve work injury compensation for digital platform workers.

Lee said these measures are designed to strengthen Hong Kong’s economic resilience, support SMEs, create business opportunities, and safeguard local workers.