Original author: Sun Peihan
Hong Kong Government Web3 Policy Introduction
With the release of the Policy Declaration on the Development of Virtual Assets in Hong Kong (the Hong Kong Declaration) on October 31, 2022, the Hong Kong SAR government clarified its policy stance and guidelines on the development of the virtual asset industry and ecosystem. After the Hong Kong Declaration, the Hong Kong governments regulatory framework and support policies for the virtual asset industry have become increasingly clear.
Table: Hong Kong Web3 Policy Evolution
Time Content Policy Announcement In October 2022, the Hong Kong government issued the Policy Declaration on the Development of Virtual Assets in Hong Kong, announcing the promotion of Hong Kong as a global virtual asset center. Policy Implementation At the beginning of 2023, the Hong Kong government proposed to promote the development of Hong Kongs Web3 industry in the Budget, and allocated HK$50 million in the February budget to accelerate the development of the Web3 ecosystem, and established the Web3.0 Association in April. Policy enhancement In June 2023, the Hong Kong government further enhanced Hong Kongs importance in the Web3 field and established a specialized group.
In addition, Hong Kong’s financial regulator, the Hong Kong Securities and Futures Commission (SFC), has now carried out regulatory oversight of the cryptocurrency market and allowed legal operations. This effectively means that Hong Kong’s cryptocurrency trading platforms are now officially recognized as part of the financial services industry, just like other financial platforms (such as stock exchanges, fund operations and lending companies).
This kind of regulation of the cryptocurrency market sends an important signal to the financial and capital markets: funds that were previously unable to enter the cryptocurrency market due to the lack of government supervision can now enter the field by taking advantage of Hong Kongs financial concentration; those who were previously unable to enter the field Traditional financial institutions that cryptocurrency institutions work with are now eligible to work with them. At present, Hong Kong subsidiaries with state-owned assets such as Pacific Insurance have begun to explore the field of cryptocurrency, and this trend is also gaining momentum globally.
According to data from Foresight News, at least 10 institutions have now announced that they will apply for Hong Kongs VASP license. This license is also the most comprehensive and important cryptocurrency trading license currently launched in Hong Kong. These include cryptocurrency institutions such as HashKey, OKX, Huobi, Bitget, BitMart, Bybit, BitMEX, OSL and Gate, as well as some traditional financial institutions.
Legal compliance (minimizing personal and financial risks) + compliant exchanges (providing a way to issue Tokens and trade Tokens) have laid the infrastructure for Web3 companies and eliminated worries, making them extremely attractive.
How can Web3 companies enter the Hong Kong Science Park from 0 to 1?
As the infrastructure of exchanges becomes increasingly perfect, how can Web3 small and medium-sized enterprises participate in the wave of Hong Kongs Web3 policy? What conditions are needed? The following will introduce in detail the Hong Kong Science Park as an example.
The Hong Kong Science Park is a large-scale, sunny and green science and technology RD base initiated and constructed by the Hong Kong government. Its main goals are to promote Hong Kongs innovation and technology development, cultivate scientific and technological talents, promote exchanges and cooperation between academic and business, and ultimately Create benefits for society and the economy. Hong Kong Science Park provides abundant resources and facilities to provide the best environment for technological innovation enterprises to facilitate their research, development and commercialization. Based on existing information, the relationship between Hong Kong Science Park and Web3 and Web3 companies can be summarized as follows:
Hong Kong Science Park is a popular place to attract Web3.0 entrepreneurs from around the world. In recent months, it has actively embraced Web3.0 and launched supportive policies.
More than 300 companies have settled in the Science Park, covering areas such as blockchain, AI, digital content and network security.
Hong Kong Science Park cooperates with G-Rocket to provide financial support and ecological services for Web3.0 entrepreneurs to settle in Hong Kong.
The Hong Kong Science Park can provide about HK$1.3 million in funding to start-ups, with an incubation period of three years.
Start-ups can apply for multiple support programs such as the Innovation and Technology Incubation Program, the Enterprise Acceleration Program and the Elite Enterprise Program.
The Science Park provides office and RD support such as rent subsidies and wage subsidies, and has a good atmosphere for scientific innovation and cooperation opportunities.
Hong Kong Science Park Support Policies
According to the intensity of support, it can be divided into three types of special support: IDEATION plan, incubator plan (Innovation and Technology Cultivation Plan), and enterprise acceleration plan.
IDEATION plan
Program introduction
The program aims to help companies implement innovative ideas and successfully start a business, with a maximum subsidy of HK$100,000 for one year.
program requirements
There are clear requirements for the project progress, and it needs to be a project that is close to being launched. However, it is not required to have a completed product and needs to be recommended by local investors. For companies, it is required that the company has been registered in Hong Kong for no more than two years before the start date of accepting applications, or the applicant team must register a limited company in Hong Kong before the start of the program.
Program application process
Prepare a business plan covering the review standards. There is a template on the official website
Complete the online application process and upload supporting documents
Audit standards
Team qualities and capabilities
Feasibility of business operations
The innovativeness of the project
Technology research and development content
Program application time
September 2023 (Group 24-14)
Application period: 12 noon on September 1, 2023 to 12 noon on September 29, 2023
Review meeting (only for selected applications): end of October to early November 2023
Announcement of results: end of November 2023
Incubator Program (Innovation and Technology Incubation Program)
Plan introduction
The plan lasts for 3 years, with a maximum subsidy of 1.39 million Hong Kong dollars. The difference from the IDEATION plan is that it requires an existing product, at least an MVP version of the product.
program requirements
Must be a limited company registered in Hong Kong within 5 years
Have at least 2 full-time employees, and at least half of the full-time employees are engaged in scientific research
The founding team holds at least 51% of the companys shares
The companys products are in the prototype stage or are market-proven minimum viable products (MVP).
Program application process
1. Submit application online
2. Due Diligence Meeting
3. Admission review meeting (ten minutes speech and ten minutes QA)
4.Admission notice
Program application time
As long as the information is complete, the entire process usually takes about 30 days.
Enterprise Acceleration Program
Plan introduction
Help startups promote business development, quickly enter the global market, and expand international scale. Focus on supporting high-potential start-up companies that are in a period of accelerated growth. The plan period is 2 years, and a maximum subsidy of 4.8 million Hong Kong dollars can be obtained, but the Hong Kong government needs to hold shares, but the shareholding ratio will be lower than Cyberport.
program requirements
The applicant company is in the growth stage and is committed to expanding its scale globally
Currently an incubatee company under the Hong Kong Science and Technology Parks Entrepreneurship Incubation Program or an existing partner company of the Science Park
The applicant company must have its headquarters and departments with administrative functions in Hong Kong, and the CEO of the company must reside in Hong Kong for a long time.
The number of employees does not exceed 100
At least half of the full-time employees in Hong Kong are engaged in scientific research fields
Program application time
Discuss one matter at a time
Web3 talent subsidy policy
Hong Kongs Web3 talent subsidy system mainly targets Hong Kong employees hired locally. If a company employs local personnel in Hong Kong, the company will be eligible for talent compensation provided by the government. For example, the monthly subsidy for employees with a doctoral degree registered in Hong Kong is HKD 32,000; employees with a masters degree can receive a monthly compensation of HKD 20,000; and the monthly compensation for undergraduate students is HKD 18,000. These compensations will be paid directly to employers to alleviate employment costs in Hong Kong.
In addition, Hong Kong also has two talent introduction plans: the Talent Introduction Plan and the Talent Introduction Plan. Outstanding talents can choose the Talent Plan. However, for those with less outstanding academic qualifications or experience, there are professional programs guaranteed by Web3 Enterprises.
For the talent program, specific companies (such as Web3 Company in Cyberport) need to provide guarantees in order to introduce talents through work visas. For example, if you hold a work visa for seven years, you can obtain Hong Kong permanent resident status. It is worth noting that the guarantee company must meet a certain annual tax threshold. In other words, the Web3 project must operate and make profits and pay taxes in compliance with regulations before it can apply for the professional program. Companies and skinny companies trying to avoid taxes do not meet this requirement. In addition, employees under the Talent Plan are free to change jobs within seven years, while employees under the Talent Plan cannot change the sponsoring company during this period.
In addition, the Science Park also provides companies with a PhD-level RD talent pool. These talents can also enjoy the above-mentioned monthly subsidy of HK$32,000. However, the talents receiving the subsidy must work in Hong Kong.
Science Park entry costs and requirements
The Science Park rents offices based on area. The office rent disclosed on the official website is approximately HK$23-25 per square foot, of which 1 square meter is approximately equal to 9 square feet.
The Science Park requires that more than half of the RD positions of the companies settled in the Science Park are located in the Science Park, and the review of project applications will focus on technical and RD requirements. When determining whether it is a RD position, the employees resume will be required to be submitted and reviewed by a dedicated person.
When applying for the Science Park, you will be asked to provide relevant proof that the company is a technology-based company.
When applying for the science park, you will be required to provide a complete technology research and development plan, incubation plan, and operation plan.
In addition to submitting materials, applying for the Science Park also requires interviews with companies and projects.
Summarize
In general, the Hong Kong governments comprehensive regulatory policy for the Web3 industry means that the Web3 industry has a clear positioning in Hong Kong. It is not only legal and compliant, but also can apply for preferential and subsidy policies similar to other high-tech enterprises. The licensing system implemented for exchanges provides legal protection for the subsequent development of Web3 companies (such as issuing Tokens). In addition, in addition to providing cash subsidies to start-up companies for hiring Hong Kong employees, it also provides companies with a policy (expert plan) for mainland employees to obtain Hong Kong permanent residence status, and employees cannot be employed within 7 years. Changing companies will, to a certain extent, improve the companys attractiveness and loyalty to outstanding employees. As one of the traditional world financial centers, can Hong Kong combine with the Web3 wave to give birth to a number of outstanding Web3 companies? Let’s wait and see.
References
[ 1 ]https://zhuanlan.zhihu.com/p/607819536
[2]https://www.hkstp.org/zh-cn/contact-info
[3]https://web3 caff.com/zh/archives/55527
[ 4 ]https://news.marsbit.co/ 20230731205833453465 .html
[5]https://web3 caff.com/zh/archives/64722
