OSL: Low tax rates can attract international investors! Investment in virtual assets in Hong Kong is exempt from VAT

Since Hong Kong Chief Executive Lee Ka-chiu proposed the goal of "promoting Hong Kong to become an international virtual asset center" in his first policy address in October 2022, Hong Kong's cryptocurrency supervision and industry have continued to flourish, launching a virtual asset trading platform license system, opening up the listing of Bitcoin and Ethereum spot ETFs, and relaxing security token (STO) regulations and a series of measures. We are now planning to launch a licensing system for OTC currency dealers.

Hong Kong Ta Kung Pao reported today (29th) that since the Hong Kong government launched a series of regulatory rules including the exchange licensing system last year, the encryption industry generally believes that Hong Kong’s advantages in developing the virtual asset market have become increasingly obvious, which has caused many Relevant talents and enterprises will return to Hong Kong for development.

Hong Kong virtual asset investment is "VAT-free"

A major advantage of the Hong Kong market is that "investing in virtual assets in Hong Kong will not be levied asset value-added tax", which is quite attractive to global investors, such as in Japan Both Japan and Australia need to pay asset appreciation tax, and the relevant taxes will be included in the comprehensive tax rate calculation. The comprehensive tax rates in Japan and Australia can be as high as 50% and 40% respectively. Therefore, Hong Kong’s low tax rate is a major factor in attracting international investors to Hong Kong. factor.

Wu Zhenbang, chief financial officer of OSL Group, a Hong Kong licensed digital asset platform, said in an interview: The SAR government’s declaration on virtual assets in 2023 has indeed strengthened the industry’s confidence. In the past, virtual asset-related companies once moved from Hong Kong to Singapore for development. However, a large number of these companies have returned to Hong Kong in the past year, which shows that there is greater confidence in the future development of Hong Kong's virtual asset market.

Will Hong Kong become the leader in Asia’s cryptocurrency market?

Hu Zhenbang also stated in an interview this month that he believes Hong Kong has the potential to become the leader of Asia’s cryptocurrency market.

"Hong Kong has great advantages in developing the virtual asset market, including low tax rates, no asset value-added tax being levied on cryptocurrency investments in Hong Kong, clear legal systems, and complete investor protection... and Hong Kong is also a key center for international financing. , gathering financial elites from all over the world, and relying on China, it has sufficient conditions to develop into the leader of the Asian virtual asset market in terms of talents, resources and policies. "

However, although Hu Zhenbang was optimistic about the development of Web3 in Hong Kong during the interview. High confidence, but according to HODL15Capital data, as of June 21, the Hong Kong Bitcoin Spot ETF held only 3,842 BTC, equivalent to approximately US$250 million. Compared with the 867,532 BTC held by the U.S. market since the beginning of this year, The gap in capital inflows is quite large.

Although Hong Kong is currently accelerating the improvement of relevant regulatory measures, it remains to be seen whether Hong Kong can continue to attract global capital inflows and even become the leader in the Asian cryptocurrency market.

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