Hong Kong’s latest push to attract corporate treasury centres (CTCs) could prove a turning point in its efforts to lure mainland Chinese and multinational companies, strengthening the city’s position as an international financial centre, according to industry participants.

The government last week unveiled an action plan that includes a proposed amendment to the tax regime for corporate treasury centres in the first half of next year.

The changes would expand the scope of interest deductions eligible for the existing 50 per cent profits tax concession and introduce a pre-approval mechanism allowing companies to obtain certainty on their tax treatment before establishing operations.

“The new action plan could be a game changer because the government has listened to industry concerns and addressed some of the pain points in the 2016 tax regime,” said Rex Ho, Asia-Pacific financial services tax leader at PwC Hong Kong.

Ho said the measures could encourage more mainland firms to use Hong Kong as a treasury hub as they expand overseas, while also making the city more attractive to multinational companies and businesses from countries participating in the Belt and Road Initiative.

A corporate treasury centre functions as an internal bank for companies with operations across multiple jurisdictions. It manages group cash flow, financing, investments and risk management, while helping to centralise funding activities.