The policy address delivered by the newly-elected Hong Kong chief executive John Lee yesterday (19 October) could mark a sea change in the way the territory attracts maritime businesses to the maritime cluster.
 

During the address Mr Lee unveiled the formation of the Hong Kong Investment Corporation endowed with a HK$30bn fund for attracting enterprises by investing in their business.
 

“With the Co-Investment Fund, the government will consider co-investing in individual projects of the target enterprises, taking into account their potential to drive industry development in Hong Kong,” Mr Lee said.
 

Shipping is among eight key industries targeted by the government initiative. Prior to the new incentive, the government has historically offered sweeteners to industry sectors such as ship leasing and marine insurance which have benefitted from a favourable tax regime.
 

The maritime law sector was the main direct beneficiary yesterday. A Maritime Services Traineeship Scheme will be introduced next year “to provide traineeship for young people who aspire to a career in maritime,” he announced,

The details are sketchy at this point. A spokesperson for the Transport and Logistics Bureau said:

“Hong Kong needs more home-grown maritime lawyers to provide maritime legal services. The Transport and Logistics Bureau is working on a “Maritime Services Traineeship Scheme” under the Maritime and Aviation Training Fund (“MATF”). We aim to roll it out in 2023. The new scheme will incentivise companies to provide tailor-made traineeship programmes for young people who aspire to a career in maritime law. Details of the scheme will be available later.”
 

Since 2019 Hong Kong has reached three agreements with the PRC with regard to legal and arbitral proceedings that massively impact Hong Kong’s standing as a seat for arbitration and civil law.
 

First, the interim measures arrangement in aid of arbitration allows three types of orders to be obtained from PRC courts.  Secondly, a reciprocal arrangement on civil court judgements, allowing the enforcement of a civil court judgement in the Mainland is not in force yet but was gazetted earlier this year. Last, there is a similar arrangement for insolvency whereby the powers of Hong Kong liquidators can be recognised by PRC courts.
 

The thinking behind the traineeship scheme must be that with the potential for more business made possible by the cross-border agreements the profession will need more boots on the ground to take full advantage.
 

Other comments made by the chief executive regarding Hong Kong’s role as an international shipping centre appeared to be reaffirmation of policies already in place. The promotion of the Port of Hong Kong as a smart port formed part of Carrie Lam’s final policy address in October 2021. In November 2021 the Hong Kong Maritime and Port Board created a Task Force to push the concept forward.
 

Mr Lee also referred to tax concession measures to attract more high value-added maritime enterprises to establish a presence in Hong Kong. Since 2020 the government has introduced such tax initiatives to ship leasing, marine insurance, ship management, shipbroking and ship agency. There appears to be little evidence that tax concessions will be further extended at this stage.
 

Under the chief executive’s plans the logistics sector looks set to receive a boost in its digital capabilities as the Government will work with the Hong Kong Logistics Development Council and the trade to start formulating an action plan to promote high value-added modern logistics development in three directions:

Reinforcing intermodal transport by integrating air, sea and land transport to strengthen the key role played by Hong Kong in the logistics chain of the GBA.

Leveraging strengths in handling high-value goods to promote the development of high-end and high value-added logistics services, such as the processing of cold chain goods, fresh food and pharmaceuticals.

Encouraging a wider application of smart logistics solutions by the logistics trade to enhance competitiveness through technology.

Source: Hong Kong Maritime Hub

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