Here are Hong Kong’s statutory updates for 2025.
Effective January 2025
Hong Kong Implements Global Minimum and Top-Up Tax
Hong Kong will introduce a 15% Global Minimum Tax and a Domestic Minimum Top-Up Tax for multinational enterprise (MNE) groups, aligning with the OECD’s Base Erosion and Profit Shifting (BEPS) 2.0 framework.
Key Details:
- Eligibility: MNE groups with annual global revenues of €750 million or more, as reflected in the consolidated financial statements of the ultimate parent entity.
- Purpose: To ensure MNEs pay a minimum tax rate on profits earned in Hong Kong, bridging the gap between the existing tax rate and the global minimum rate.
These measures aim to maintain Hong Kong’s tax competitiveness while complying with international standards.
Source: Inland Revenue Department (IRD), Hong Kong
Effective May 2025
Removal of MPF Set-Off for Severance/Long Service Payments
From 1 May 2025, employers in Hong Kong will no longer be able to offset mandatory provident fund (MPF) contributions against statutory severance or long service payments for amounts accrued after this date. To assist employers, the government has allocated HK$33 billion to subsidise part of these liabilities over the next 25 years, with decreasing support each year. This change will also heighten the importance of “unreasonable dismissal” protections under the Employment Ordinance, making severance payments more relevant for employees with over two years of service.
Source: Labour Department
Effective July 2025
Hong Kong Exchange Implements Enhanced Corporate Governance Code
The Hong Kong Stock Exchange (HKEX) will introduce updated Corporate Governance Code measures from July 2025, focusing on transparency, board diversity, and enhanced stakeholder engagement.
Key Updates:
- Board Diversity:
- Listed companies must disclose clear diversity policies and measurable objectives, including gender representation on boards.
- Aim for 30% female representation on boards by 2030.
- Environmental, Social, and Governance (ESG) Disclosures:
- Enhanced requirements for sustainability reporting, aligning with international ESG standards.
- Independent Directors:
- Strengthened independence criteria for directors, including restrictions on tenure beyond nine years.
- Stakeholder Communication:
- Companies must establish formal channels for investor and stakeholder feedback.
Source: HKEX
Effective May 2026
Annual Review of Statutory Minimum Wage
The statutory minimum wage, last increased to HK$40 per hour in May 2023, will undergo an annual review starting from 1 May 2026. This change aims to ensure regular adjustments to the wage floor in line with economic conditions.
Source: Labour Department
