Hong Kong is moving to strengthen its virtual asset regulatory framework and expand tax incentives as part of efforts to enhance the competitiveness of its financial services sector.
The government is preparing to introduce a new regulatory framework for virtual asset service providers, separate from the previously announced regimes governing virtual asset trading and stablecoins, said Joseph Chan Ho-lim, Under Secretary for Financial Services and the Treasury of the Hong Kong SAR Government.
Speaking at the Hong Kong edition of the ABF IA Summit 2026 on 5 November, Chan said the proposed framework would cover virtual asset dealing, custody, management and advisory service providers.
He said the additional regulatory measures are intended to support the sustainable and responsible development of the virtual asset industry.
The government is also working to broaden its tax exemption framework to include pension funds and government funds. The range of eligible investment instruments is expected to expand to cover emissions derivatives and allowances, insurance products, securities, private credit investments, digital assets and precious metals.
According to Chan, the legislative proposal has been submitted to the Hong Kong Legislative Council, while the clause-by-clause review of the proposed tax concessions has been completed by the relevant committee.
The enhanced tax incentives are expected to take effect from the 2025–26 year of assessment, a move Chan said would further strengthen Hong Kong’s appeal as a financial centre.
He also highlighted plans to expand the city’s green finance ecosystem, citing growing demand for sustainable financing across Hong Kong, mainland China and the wider Asian region.
Chan said Hong Kong has become Asia’s leading centre for arranging green and sustainable bond issuances. The city has also expanded its sustainable finance offerings through green bond issuance, ESG funds and green equity indices.
He added that the government would continue developing the green finance market to channel capital into environmentally sustainable projects across Hong Kong, China, Asia and other regions.
Despite its strong position in several areas, Chan stressed that Hong Kong must continue reviewing and refining its policies to maintain its competitive advantage.
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