The CEO of cancer drug maker Athenex says Hong Kong needs to do more to draw innovative firms

Hong Kong should consider lowering profit tax on innovative companies to attract more investment in the biotechnology sector, according to the chairman and CEO of a US-based cancer treatment developer.

Otherwise, the city – well placed as a hub for research and business – risks losing out to other jurisdictions that offer generous state grants and tax benefits, said Johnson Lau Yiu-nam whose Buffalo-based Athenex lobbied successfully for concessions from government officials in New York state and Chongqing.

“I have suggested to the Hong Kong government that it cut the profit tax for innovative biotech firms from 16.5 per cent to 5 per cent,” he told the Post in an interview. “The Netherlands and Belgium have become major biotech research and development centres and have been very proactive in offering incentives.”

Last year, the Netherlands lowered its effective tax rate to 5 per cent – compared to the normal 25 per cent – on profit derived from patents owned by companies through in-house innovation.

In Belgium, companies based in the northern Dutch-speaking Flanders region enjoy an effective tax rate of 5.1 per cent on earnings from patents-granted innovation.

Elsewhere, governments have offered subsidised land and building infrastructure to lure investment.