Hong Kong launches IP financing sandbox to support innovation, SMEs
23 December 2025
The Hong Kong Monetary Authority (HKMA), in partnership with the Commerce and Economic Development Bureau and the Intellectual Property Department, launched the Intellectual Property Financing Sandbox on December 22, 2025, to help businesses leverage intangible assets for funding.
The initiative is designed to enable small and medium-sized enterprises (SMEs) to use patents, trademarks and copyrights as collateral for loans. Officials said the goal is to support innovation-driven firms that often lack traditional physical collateral.
The sandbox provides a controlled environment for banks, valuation firms and legal professionals to develop and test financing models across the full lifecycle of intellectual property. Authorities said the program aims to build expertise within the banking sector for serving IP-rich SMEs.
Three major banks have joined as inaugural participants and will begin pilot programmes with clients in the biotechnology, electronics and technology sectors, according to the HKMA, however, the specific names of these banks were not publicly disclosed in the HKMA press release.
Officials outlined four operating principles for the sandbox: recognizing IP value during loan underwriting; requiring independent, standardized IP valuations; implementing risk management protocols for institutions and IP holders; and fostering cross-disciplinary collaboration among banks, legal experts and valuation professionals.
Commerce and Economic Development Secretary Algernon Yau said the sandbox, along with measures proposed in the 2025 Policy Address, will strengthen Hong Kong’s role as a regional IP trading hub by providing structured, credible financing for innovation.
Algernon Yau, Hong Kong Commerce and Economic Development Secretary
The initiative aligns with broader policy efforts announced in the 2025 Policy Address, which include support for patent valuation services and subsidies through the newly established Hong Kong Technology & Innovation Support Centre.
Globally, IP-backed financing is gaining momentum. The market is projected to grow from about US$1.5 billion in 2025 to US$3.43 billion by 2034, with some forecasts predicting expansion to US$200 billion as intangible assets become mainstream in lending. North America leads with roughly 40 percent of global transactions, while Asia-Pacific is catching up – China alone recorded Rmb486 billion (US$67 billion) in IP-pledged loans. Canada’s BDC Capital launched a C$160 million (US$116.6 million) IP financing envelope, and South Korea and Singapore have set up systems that allow IP to be used as loan collateral. The World Intellectual Property Organization estimates intangible assets now represent about 90 percent of the S&P 500’s value, underscoring their economic weight.
– Cathy Li
