Over the past few months, the Hong Kong Government has reiterated their commitment to helping the Hong Kong economy, especially to SME’s. On 8 April 2020, the Hong Kong Government announced a HKD 137.5 billion relief package (“the relief package”) to help individuals and businesses tide over the financial difficulties incurred as a result of COVID-19. While details pertaining to the specifics of this relief package have yet to be released, we have identified several points which would be of interest to Hong Kong SME’s.
The HKD 137.5 billion relief package will be utilized for the following:
2.1. Salary Subsidies
To encourage job retention, job creation and job advancement, the relief package will include a HKD 80 billion Employment Support Scheme. Although the scope of the Employment Support Scheme extends past salaries, people can expect the following salary subsidies in respect of job retention:
2.2. Employment Support Scheme
The Employment Support Scheme will promote job creation and job advancement in the following ways:
2.3. Relief to Hard-Hit Sectors
The Hong Kong Government has identified various sectors of Hong Kong’s economy as those that are expected to be hard-hit financially. Among the sectors of the economy which are expected to be hardest hit, FastLane has identified three sectors which are of particular prominence among the SME community:
2.4. Easing Cash Flow Burden On Businesses and Individuals
It is commonly recognised that “cash is king.” Without assistance, the cash flows of Hong Kong SME’s will undoubtedly be put under strain. The relief package aims to ease this cash flow burden by introducing revisions to the Hong Kong Government’s SME Financing Guarantee Scheme (“SFGS”).
To summarize, the revisions to the SFGS are as follows:
2.5. Other Relief Measures Through Government Facilitation
The relief package includes additional initiatives for Hong Kong’s economy. SMEs in particular can expect the Hong Kong Monetary Authority to continue working with the banking industry. The purpose of this collaboration is to implement a number of measures in addressing cash-flow pressure of their clients with a special focus being made on Hong Kong’s SMEs.
There remains a lot of uncertainty regarding how the relief package will be implemented and logistical arrangements surrounding how eligible applicants can obtain assistance. We can expect the Hong Kong Government to release further clarity regarding these uncertainties in the upcoming weeks.
Please stay tuned to the FastLane Group and check out the government website as we will continue to monitor all developments and will provide updates accordingly.
Blog originated from: https://fastlanepro.hk/government-relief-package-sme/