Taxi Investment 8 Major Advantages

At present, there are 18,163 taxi licences in Hong Kong. Among them, 15,250 are urban licences, 2,838 are New Territories licences and 75 are Lantau licences.. Since 1998, the Government has not issued any new urban taxi licences and New Territories taxi licences. Taxi investors do not have to worry about the significant increase in the number of taxis that will affect the investment value. Taxi licences are permanent and have no expiration date, allowing free trading on this product. The average daily passenger volume is approximately 1 million.

Taxi operation is a unique industry whose culture fosters a favourable and stable investment environment. As evidenced by major financial crises over the years, its resilience is significantly stronger than that of property and stock investment, and the decline is relatively small.

As taxis are an indispensable means of point -to-point transportation, a stable monthly rental income can be earned for taxi licence investor by renting out taxis. 

The price of taxi licences soared to an all-time high of HK$7.66 million in June 2015, driven up by the fact that the Hong Kong government did not issue urban taxi licences after 1998, making them a "limited edition commodity". From mid-2015, the licence prices continued to decline until the end of August 2023. We believe it's bottomed out.

The relationship between taxi price and interest rates 

Before the Hong Kong government raised interest rates in 2016, the price of taxis remained high. Until 2019, the interest rate in Hong Kong had been rising continuously, while the price of taxis had continued to fall. In 2019, Hong Kong experienced a large-scale social movement, which led to the failure to rebound even if interest rates were lowered. At the same time, due to the large-scale outbreak of the epidemic, the taxi market has been at a standstill until 2023, when the epidemic had passed, and the taxi market has recovered.

Taxi Investment licence is familiar to property investment. Most investors do mortgage from banks, and the interest rate of the loan affects the monthly investment return. The higher the interest rate of the mortgage, the higher the monthly loan repayment will be, and the smaller the monthly investment return will be. It is observed that the higher the interest rate, the less people are willing to investment on taxi licence. It has become the main factor that leads to the decline in taxi licence value. 

Hong Kong's currency and interest rates are pegged to the US dollar. Chicago Mercantile Exchange Group (CME Group) analyses and predicts the US interest rate based on the news released and meeting content of the Federal Reserve. It is expected to be cut in mid-2024, which means that interest rates will continue to fall and it directly affects Hong Kong's interest rates.

Investing in a taxi licence can generate regular passive income as a monthly rent, and the licence itself has huge room for growth.

At the beginning of 2023, the price of the taxi licence is at 4.6 million, and it can reach a hike of 7.23 million Hong Kong dollars. It can double your investment in the next few years.

1. Low down payment: According to the HKMA's guidelines, the maximum mortgage loan amount for a bank or financial institution is 85% of the market value (the market price plus the vehicle price). That means, the buyer only needs to pay about 15% of the down payment to buy a taxi licence and become the owner of the taxi. We will assist the vehicle owner to apply for a taxi mortgage, or the customer can choose the bank and apply for the loan on the terms provided by the bank at that time. The interest rate of the taxi mortgage is calculated based on the Prime Rate (P-Rate) or the Hong Kong Interbank Offered Rate (Hibor). 
2. Low status restrictions: As long as you are over 18 years old, any nationality and status can buy a taxi license to become a car owner.

In terms of taxi investment, the transfer procedure of taxi trading transaction is very simple. The buyer and seller only need to go through the formalities at the Transport Department. The taxi transaction is easy, convenient to change hands and cash out, while the transaction cost is low. There is no huge stamp duty, brokerage commission and legal fees, etc., Only a transfer fee of $1,000 for the taxi license transaction is required. This flexibility allows investors to invest more flexibly in a volatile economic environment and to change their strategies of taxi investment at any time. 

We provide one-stop taxi investment custody management services. In addition to taxi investment planning and analysis for taxi investors, we also provide business registration, taxi daily maintenance, traffic accident handling, cleaning and inspection, annual government vehicle inspection, renewal of annual driving license and insurance policy, hiring drivers, rent collection and other issues to make it easy for investors to enjoy taxi returns. We also provide monthly statements to ensure transparent visibility of all income and expenses.

We will provide you with regular market updates and price trends, and you can decide at your discretion to keep them as short-term, medium-term or lifetime investments for maximum returns.