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The Financial Services Development Council (FSDC) released a report on March 3 on the policies, including tax measures, Hong Kong could adopt to improve its position as an insurance hub, especially in reinsurance, marine insurance, and captives.
FSDC Chairman Laura M Cha said: "The recent departure and downsizing of the Hong Kong offices of various international insurance and reinsurance companies highlights the need for Hong Kong to further develop our insurance and reinsurance industry. Further departures are likely in the near future if action is not taken," to combat the challenges from regional competitors, particularly Singapore.
The report recommends that the Government consider extending the 50 percent profits tax break currently given to professional reinsurers to the offshore non-life business assumed by direct insurers. Tax incentives could also be offered to brokers to encourage the placement of insurance and reinsurance businesses in Hong Kong, and to Hong Kong insurers to place their reinsurance businesses with Hong Kong-registered reinsurers.
Tax incentives could also be given to insurers writing marine risks in Hong Kong and to brokers placing marine risks to Hong Kong registered insurers, it said, adding that a tax concession could be provided to Hong Kong registered/flagged ship owners while taking insurance policies from Hong Kong insurers.
Finally, it recommended that the negotiation of double taxation agreements could be sped up with other countries, so that Hong Kong has an equally extensive double tax agreement network as Singapore and London.
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