Stamp duty waiver could spur Hong Kong ETF market

Head of Tax, Travis Benjamin was recently interviewed by Asia Asset Management regarding the Hong Kong ETF market. The article discussed whether the proposed stamp duty waiver for all Hong Kong-listed ETFs would make the city the most attractive place in Asia to launch these kinds of investment products.

The Hong Kong government has released its draft legislation to waive stamp duty for the transfer of shares or units of all ETFs in the territory. The bill will be introduced into the Legislative Council on December 17.

Travis said that he expects the bill to gain wide support from lawmakers as stamp duty collected from ETF trades accounts for only a small amount of the government’s total tax revenue.

He believes the proposed uniform stamp duty exemption will lift Hong Kong’s competitiveness in the race to attract more ETF listings and save on the costs of listing locally, as issuers will no longer need to file an application for exemption from stamp duty to the Inland Revenue Department.

“Where I think this is going to make a big difference is in attracting regional and globally focussed ETFs to Hong Kong,” he said.