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Published: 17:08, March 24, 2023 | Updated: 12:58, March 27, 2023
HK unveils policy for developing family office businesses
By Oswald Chan
Published:17:08, March 24, 2023 Updated:12:58, March 27, 2023 By Oswald Chan

Secretary for Financial Services and the Treasury Christopher Hui Ching-yu delivers the opening remarks at the Wealth for Good in Hong Kong Summit on March 24, 2023. (PHOTO PROVIDED TO CHINA DAILY)

Hong Kong on Friday announced new measures on developing family office businesses, aiming to develop a vibrant ecosystem for global family offices and asset owners in the international financial center and wealth management center.

The Policy Statement on Developing Family Office Businesses in Hong Kong, released by the HKSAR government on Friday, set out eight strategies to promote family office businesses.

The administration will provide a profits tax exemption to family-owned investment holding vehicles managed by single family offices in Hong Kong, subject to approval by the Legislative Council. It will also review the existing preferential tax regimes for funds and carried interest

“Developing family office business will be conducive to pool capital from around the world in Hong Kong, bolster our financial market as well as the asset and wealth management industry,” Financial Secretary Paul Chan Mo-po said in a government statement on Friday.

These measures will also promote the sustainable development of Hong Kong’s financial and professional services, innovation and technology, green, arts and culture and philanthropy, the finance chief added.

 “The attractiveness of Hong Kong goes beyond our role as an investment and financing center, and the policy measures are formulated to showcase the full charm of Hong Kong as an international cosmopolitan city from multiple dimensions,” Secretary for Financial Services and the Treasury Christopher Hui Ching-yu noted.

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Under the blueprint, the government will introduce a new Capital Investment Entrant Scheme which aims to attract ultrahigh-net worth individuals to deploy their capital in the city by giving applicants Hong Kong permanent residency status, if they invest in Hong Kong asset markets such as equities, corporate and government debts, subordinated debts issued by authorized institutions; and eligible collective investment schemes.

The administration will provide a profits tax exemption to family-owned investment holding vehicles managed by single family offices in Hong Kong, subject to approval by the Legislative Council. It will also review the existing preferential tax regimes for funds and carried interest.

Along with the family business ecosystem, the government is also striving to develop Hong Kong into a philanthropic center for global family offices and philanthropists to deploy charitable capital, by hastening application processing for recognition of the tax exemption status of charities.

Other market facilitation measures include, the establishment of a new Hong Kong Academy for Wealth Legacy under the Financial Services Development Council to offer talent development services; the feasibility of establishing storage, display and appreciation facilities for art and treasures at Hong Kong International Airport; and the launch of a Network of Family Office Service Providers under the FamilyOfficeHK team of InvestHK to provide comprehensive services to family offices.

READ MORE: Growing fortunes in the family

“The proposed plan to include equities listed in Hong Kong and debts issued or fully guaranteed by companies listed in Hong Kong as part of the permissible assets for the new capital investment entrant scheme will provide new sources of capital and be very beneficial to the capital markets development in Hong Kong,” CPA Australia’s Greater China Deputy Divisional President Cliff Ip said.

“Together with the tax concessions that are available for family-owned investment holding vehicles, the new Policy Statement represents a strong catalyst to make Hong Kong an even more influential and well-renowned cosmopolitan city and international financial center,” Ip added.

Financial Secretary Paul Chan Mo-po delivers the welcome remarks at the inaugural Wealth for Good in Hong Kong Summit, introducing Hong Kong's strengths and opportunities in developing itself as a leading hub for global family offices on March 24, 2023. (PHOTO PROVIDED TO CHINA DAILY)

“We continue to see rising interest in family offices from our ultrahigh-net-worth clients, whose multifaceted and intergenerational needs would benefit from such a setup. Global business families and their family offices will look to expand their operations in Asia and beyond,” said Ng Aik-ping, Asia Pacific’s head of family office advisory at HSBC Global Private Banking.

The Private Wealth Management Association welcomed the blueprint, saying it has outlined powerful initiatives aimed at promoting Hong Kong’s continued development as a family office hub.

Meanwhile, the administration organized the Wealth for Good in Hong Kong Summit on Friday which more than 100 decision-makers from global family offices attended to discuss the technology, philanthropy, green and art aspects of family office businesses.

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