Hong Kong removed from Portugal's "tax blacklist," effective next year

The Secretary for Financial Services and the Treasury, Xu Zhengyu, stated that the Portuguese government has announced the removal of Hong Kong from its list of "countries, regions, and areas with significantly more favorable tax systems," effective January 1, 2026.

Xu Zhengyu indicated that this announcement eliminates unnecessary tax barriers for Hong Kong investors, allowing them to explore business opportunities in Portugal in a fairer business environment. Hong Kong investors will no longer have to pay higher withholding taxes and property taxes in Portugal, with property tax savings of up to 7.2%; they can enjoy tax exemptions on certain non-resident capital gains taxes, saving up to 28%; and transactions between Hong Kong and Portugal will no longer be subject to strict transfer pricing rules.

Xu Zhengyu pointed out that this achievement is the result of close cooperation between the business community and the Financial Services and the Treasury Bureau, jointly providing reasonable explanations to the Portuguese government and telling the good "tax story" of Hong Kong. He will continue to support international tax cooperation, maintain close communication with overseas tax jurisdictions, and actively expand the network of tax agreements to further consolidate Hong Kong's position as an international leading business and investment hub