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Hong Kong Officials Promote Ready-to-Move Tech Hub for Canadian Web3 Startups

Ruholamin Haqshanas
Last updated: | 2 min read
Hong Kong Officials Promote City's Ready-to-Move Tech Hub for Canadian Web3 Startups

Hong Kong government entities have attended a tech conference in Toronto, where they showcased the city’s offshore ready-to-move technology hub for Canadian crypto and Web3 startups.

The Hong Kong Economic and Trade Office in Toronto (Toronto ETO), Invest Hong Kong (InvestHK), and StartmeupHK (SMUHK) collaborated to co-host an event at Collision 2024, according to an official press release.

During the event, Emily Mo, the director of Toronto ETO, highlighted the startup-friendly regulations in Hong Kong, including lower taxes compared to Canada, and the city’s willingness to collaborate with “pre-commercial specialist technology companies.”

“There is a creative mindset on Web3/virtual assets developments,” Mo said.

“Fintech, health technology, green technology and property technology, etc, are trending in Hong Kong and Asia these days.”

Canadian Businesses Operating in Hong Kong Enjoy Advantages

Canadian businesses operating in Hong Kong enjoy the advantage of receiving both public and private funding.

The governments of Canada and Hong Kong have maintained a double tax agreement for over a decade, aimed at avoiding double taxation and preventing fiscal evasion concerning personal and corporate income taxes.

On June 22, Hong Kong Legislative Council member Johnny Ng Kit-Chong announced the establishment of a subcommittee on Web3 and virtual asset development.

The purpose of this subcommittee is to promote the growth of Web3 and digital assets in Hong Kong.

The council seeks feedback on crucial aspects of Web3 policy development, including the establishment of a cohesive environment with robust and clear regulations that balance technical, legal, and regulatory frameworks.

All crypto exchanges operating without a license were compelled to shut down.

Although more than 20 exchanges initially applied for a crypto license, most withdrew their applications due to failure to meet the stipulated requirements.

One of the affected exchanges, Gate.HK, based in Hong Kong, announced plans to relaunch its services after reconstructing its platform to comply with regulatory requirements, including Anti-Money Laundering and Counter-Terrorist Financing measures.

Major Exchanges Withdraw Applications from Hong Kong

While Hong Kong continues to position itself as a crypto-friendly hub, the region witnessed a series of crypto exchange closures in May.

On March 28, 2024, HKVAEX, suspected to be affiliated with Binance, withdrew its license application.

Subsequently, on May 14, IBTCEX, QuanXLab, and Huobi HK followed suit, followed by Gate.HK on May 22, OKX HK on May 24, and Bybit (Spark Fintech Limited) on May 31.

These withdrawals have left only 17 virtual asset trading platforms remaining on the application list, with a total of 11 companies having withdrawn or returned their license applications.

Just recently, Hong Kong Legislative Council member Wu Shuo has voiced criticism against Hong Kong’s cryptocurrency licensing system, citing its impact on market confidence.

Wu attributed the withdrawals to the requirement imposed by the Hong Kong SFC, which requires applicants for virtual asset trading platform licenses to commit to not having mainland Chinese users in any region.

Meanwhile, Hong Kong has launched its first batch of ETFs focused on cryptocurrencies, marking potential competition for the popular Bitcoin products in the United States.