In an ambitious move to attract Canadian tech startups, Hong Kong government entities focused on foreign investment promotion visited a tech conference in Toronto, Canada. The Hong Kong Economic and Trade Office in Toronto (Toronto ETO), Invest Hong Kong (InvestHK), and StartmeupHK (SMUHK) joined forces to showcase Hong Kong’s burgeoning technology hub, particularly its strengths in the cryptocurrency and Web3 sectors.
Event Highlights at Collision 2024
The team co-hosted an event at Collision 2024 in Toronto, spotlighting the advantages Hong Kong offers to crypto and Web3 startups. Emily Mo, the director of Toronto ETO, highlighted several key incentives:
- Startup-Friendly Regulations: Hong Kong boasts lower tax rates than Canada, creating an attractive environment for emerging tech companies.
- Support for Specialist Tech Companies: The region is keen on collaborating with pre-commercial technology ventures, particularly those exploring innovative fields like fintech, health technology, green technology, and property technology.
A critical aspect of Hong Kong’s appeal to Canadian businesses is the longstanding double tax agreement between Canada and Hong Kong. Established over a decade ago, this treaty helps prevent double taxation and fiscal evasion on both personal and corporate income, facilitating smoother financial operations for Canadian businesses active in Hong Kong.
Subcommittee on Web3 and Virtual Asset Development
Recently, Hong Kong Legislative Council member Johnny Ng Kit-Chong announced the creation of the Subcommittee on Web3 and Virtual Asset Development. This initiative aims to:
- Solicit Feedback: Engage industry stakeholders to refine Web3 policy development.
- Balance Frameworks: Harmonize technical, legal, and regulatory elements to foster a supportive ecosystem for Web3 and digital asset innovations.
Despite its proactive stance towards fostering a crypto-friendly environment, Hong Kong has faced challenges, particularly in regulating crypto exchanges. In May, unlicensed crypto exchanges operating in Hong Kong were mandated to cease operations, affecting numerous local and international platforms.
Exodus and Compliance of Crypto Exchanges
- License Withdrawals: Over 20 exchanges initially applied for a crypto license in Hong Kong. However, stringent regulatory requirements led most to withdraw their applications, including major players like OKX, Huobi HK, and Bybit.
- Compliance Efforts: One exchange, Gate.HK, announced plans to overhaul its platform to meet the Anti-Money Laundering and Counter-Terrorist Financing standards required for licensing in Hong Kong. The exchange expressed commitment to re-enter the Hong Kong market and contribute to its virtual asset ecosystem upon securing the necessary licenses.
| Exchange | Action Taken | Regulatory Compliance Status |
|---|---|---|
| Gate.HK | Overhaul and future relaunch | Pending license approval |
| OKX | License application withdrawn | Exited Hong Kong market |
| Huobi HK | License application withdrawn | Exited Hong Kong market |
| Bybit | License application withdrawn | Exited Hong Kong market |
Hong Kong’s representation at the Collision 2024 in Toronto underscores its strategic initiative to position itself as a leading global hub for cryptocurrency and Web3 development. By leveraging its favorable tax treaties, supportive regulatory environment, and active engagement with the tech community, Hong Kong aims to attract international tech startups looking for a dynamic and supportive ecosystem.
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