Hong Kong's Intellectual Property Financing Sandbox has recorded its first batch of seven pilot cases that successfully completed financing approvals, and a Patent Valuation Pilot Support Scheme has been launched in tandem to strengthen support for enterprises in valuing their intellectual property.

These two measures complement each other, marking a significant step forward for Hong Kong in promoting the use of intellectual property assets by enterprises as a financing tool, while accumulating practical experience and improving related support infrastructure for the further development of IP financing locally.

The first batch of seven approved financing pilot cases covers industries including electronics, construction, toy manufacturing, and medical devices. The IP assets involved include patents and trademarks, with loan amounts ranging from HK$1 million to HK$39 million.

The Sandbox is a key initiative under the Chief Executive's 2025 Policy Address to promote IP financing. It was jointly launched by the Commerce and Economic Development Bureau, the Hong Kong Monetary Authority, and the Intellectual Property Department in December last year, with active participation from three major Hong Kong banks, their corporate clients from various industries, and professional service firms.

The Sandbox provides a collaborative and risk-controlled environment that adopts a "first try, first benefit" approach, allowing banks, enterprises, and relevant professional service providers and other key stakeholders to jointly test a complete financing arrangement based on IP assets and accumulate practical experience.

A government spokesperson said the first batch of successful cases fully demonstrates that, through the concerted efforts of the CEDB, HKMA, IPD, banks, enterprises, and professional service providers, Hong Kong can steadily explore IP financing, opening up new financing channels for enterprises with high-quality IP assets and promoting the commercialization of research and creative outcomes.

The spokesperson continued that through pilot projects conducted in the Sandbox, participating banks can test the practical operation of IP financing in a risk-controlled environment, thereby accumulating experience in risk management, valuation, and credit approval. The Hong Kong government is pleased to note that during the Sandbox testing process, banks have made more flexible arrangements regarding loan amounts and financing terms based on the value of the IP assets owned by enterprises.

The CEDB, HKMA, and IPD will continue to collect feedback from stakeholders, consolidate market responses and experience, and formulate the direction for the next phase of the Sandbox, such as studying the expansion of the number of participating banks and enterprises, facilitating more pilot cases, and optimizing the IP valuation process. At the same time, they will continue to work closely with the banking and professional services sectors to deepen market understanding of IP financing and promote its development.

In addition, the government has launched a two-year Pilot Scheme through the Hong Kong Technology and Innovation Support Center to facilitate the next phase of the Sandbox and strengthen related support measures to improve the local IP financing ecosystem.

The Pilot Scheme adopts a 1:1 matching funding model between the government and eligible SMEs, providing a one-off subsidy of up to HK$80,000 per approved applicant enterprise to support enterprises in commissioning a qualified service provider (mainly accountants, financial analysts, and surveyors) to conduct valuation of their patents and other IP assets.

At the same time, if the IP assets of an approved applicant enterprise include at least one Hong Kong patent that has passed substantive examination, the Hong Kong Technology and Innovation Support Center, with the assistance of patent examiners from the IPD, will provide free of charge a patent quality analysis report referencing national standards for one designated Hong Kong patent of the enterprise, systematically analyzing the overall quality of the patent from multiple perspectives and indicators including legal, technical, and economic value. The analysis results can be used as a reference by valuation service providers when conducting quantitative patent valuation. The above patent quality analysis service is also available to users as an optional value-added service on a fee-paying basis.

The spokesperson said the Pilot Scheme aims to make good use of Hong Kong's world-class professional services to promote IP valuation, provide concrete enterprise asset data references for corporate credit financing, and build a vibrant and robust IP trading ecosystem.

The Pilot Scheme offers high-quality and professional quantitative valuation and patent quality analysis, helping enterprises demonstrate the economic value and market potential of their intangible assets to financial institutions and investors, thereby enhancing the confidence of financial institutions and investors in establishing strategic partnerships with enterprises through investment or financing.

The Pilot Scheme is open for applications starting today. Details of eligibility and application procedures are available on the IPD's website.

The government will continue to seize the opportunities under the National 14th Five-Year Plan to support Hong Kong in deepening its development as a regional IP trading center, and in accordance with the development blueprint set out in Hong Kong's first five-year plan, will promote more IP financing and trading activities through a multi-pronged approach including the Sandbox, the Pilot Scheme, and other related measures.

The government expects that as various measures are gradually implemented and mature, the local IP trading and financing ecosystem will become more complete, further consolidating Hong Kong's position and competitive advantages as a regional IP trading center.