Building IPO appeal

Hong Kong SAR of China’s enduring appeal as an international business hub rests on more than geographical advantage. As speakers at the ACCA Hong Kong Virtual Tax Conference 2026 made clear, it is the market’s tax architecture, regulatory reforms and professional ecosystem that continue to draw enterprises seeking to expand internationally and access capital markets.

In a keynote speech, Joseph Chan JP, Under Secretary for Financial Services and the Treasury, underscored the structural advantages that set Hong Kong SAR apart. ‘We don’t have VAT or sales tax, capital gains tax, dividends or interest withholding tax, or estate tax,’ he said. ‘That means corporations can focus on creating real value instead of being weighed down by heavy tax burdens and compliance obligations.’

That streamlined tax environment formed the backdrop for two subsequent panel discussions exploring how businesses are leveraging Hong Kong SAR as a launchpad – both for global expansion and for listing on its capital markets.

Super-connector role

Rebecca Wong FCCA, co-chairman of ACCA Hong Kong’s tax sub-committee and South China tax markets leader at PwC, moderated a panel discussion on how Hong Kong SAR acts as a super connector for Chinese mainland businesses going global. ‘If you don’t go global, you’ll be left behind. But if you don’t have the right strategy for expanding globally, that can also spell failure,’ she said.

Vicky Wong, finance director at China Resources Logistics Group, noted that competitive pressure at home is pushing companies outward. ‘The Chinese mainland market is getting saturated and more competitive. At the same time, the quality of these products is getting better and better, and they genuinely have the potential to go global,’ she said, describing a progression from brand internationalisation through manufacturing export to full supply-chain replication overseas.

Recognising that ambition alone is not enough, the government has stepped in to bridge the knowledge gap. ‘Invest Hong Kong set up the GoGlobal Task Force to help Chinese mainland companies expand their businesses through Hong Kong SAR,’ said Herman Tse, head of business and professional services at Invest Hong Kong. ‘Many of these are second- or third-tier companies that primarily do business in the Chinese mainland but have come to realise they need to go global. They know what they want to achieve, but they don’t necessarily know how to design the right legal, accounting and tax structures.’

For private and family-owned businesses, the practicalities are even more granular. Jenny Xue, founding partner at HOTU Capital, outlined the typical starting points: ‘First, we look at how to get the money there – how does the local banking system work, and what are the limitations? Once the money is in place, we look at asset allocation. Second, there’s the tax structure. We need to help our clients sort all of that out.’

Compliance care

Once operations are in motion, compliance blind spots can trip up even well-prepared companies, according to Esti Chui FCCA, director of tax and business advisory services at Deloitte China. ‘If I’m based in Hong Kong SAR, does that automatically mean I’m a tax resident? Not necessarily. CRS (Common Reporting Standard) information is exchangeable between jurisdictions, and people need to be very clear about that when it comes to their personal tax obligations,’ said Chui, adding that firms expanding overseas through Hong Kong SAR should explore available tax relief measures to minimise double taxation.

The complexity deepens further at the crossborder level. Tiffany Wu, transfer pricing partner at PwC Hong Kong, highlighted the transfer pricing and tax challenges facing companies going global. ‘Companies can better manage these risks by designing transfer pricing models with local requirements in mind and, where appropriate, using advance pricing arrangements to help prevent disputes and mutual agreement procedures to resolve double-tax disputes when they arise.’

IPO opportunity

Hong Kong SAR’s revitalised IPO market offers another dimension of opportunity. Moderating a panel discussion on tax issues and other considerations along the IPO journey, Polly Wan FCCA, co-chairman of ACCA Hong Kong’s tax sub-committee and partner, tax and business advisory services at Deloitte China, said: ‘In 2025, Hong Kong SAR’s IPO market returned to the number-one spot globally. Going from a not-so-great performance over the past few years to reclaiming the top position within a single year – a lot of that has to do with the work and initiatives driven by the SFC (Securities and Futures Commission) and HKEX.’

Ernest Lee FCCA, senior technical partner at Deloitte China, detailed the regulatory improvements that underpinned the revival. ‘In 2024, there was a joint statement made by the SFC and HKEX introducing an enhanced timeframe for the new listing application process, which provides greater clarity and certainty in the listing process,’ he said. Lee added that HKEX’s decision in May 2025 to permit confidential filings for Chapter 18A biotech and Chapter 18C specialist technology applicants generated ‘a noticeable volume of enquiries expressing interests in the new initiative’ within the first week alone.

Nuanced analysis

As more companies set their sights on a Hong Kong SAR listing, early tax structuring decisions call for careful and nuanced analysis. Gloria Chan FCCA, co-chairman of ACCA Hong Kong’s tax sub-committee and tax partner at EY, highlighted a common question around intellectual property (IP). ‘Even if a group’s R&D operations are based in the Chinese mainland, they’ll often ask whether their IP can or should be housed in Hong Kong SAR,’ she said. While it’s a viable approach, she cautioned against overly simplistic tax comparisons, pointing to the interplay between the Chinese mainland’s attractive corporate income tax and R&D incentives and Hong Kong SAR’s patent box regime with R&D super deduction.

‘The key question isn’t where the IP is legally held,’ she explained, ‘but where the R&D is actually carried out, where key risks and decision-making reside, and whether the structure can withstand scrutiny once the business becomes commercialised.’

Patrick Cheung, partner at KPMG China, reinforced the point, urging companies not to leave IP planning to the last minute. ‘You need to think about how to monetise on an after-tax basis and how best to exploit the IP,’ he said. ‘It’s much better to think ahead as soon as there are enough facts available to start structuring your IP properly. By the time you get to the IPO stage, the valuation can move higher or lower depending on the value of your patent or brand.’

The considerations extend beyond the issuer side. From an investor standpoint, Douglas Lui, managing director at Argyle Street Management, noted that deal structuring carries its own complexities. ‘Whether we use a Cayman structure, a BVI entity or a Hong Kong SAR company, the disclosure requirements are increasingly high,’ he said. ‘When we do a transaction, we also need to consider the counterparty – specifically, whether they understand the vehicles we’re using.’