Deloitte on Friday called for expanded collaboration in family-office businesses between Hong Kong and the Chinese mainland, and enhanced public-private partnerships in Northern Metropolis development to add momentum to Hong Kong’s economic growth.

Executives of Deloitte, one of the world’s “Big Four” accounting firms, said the two suggestions are crucial for Hong Kong as the city ramps up efforts to reinforce its global financial status by promoting the development of family offices and betting on the Northern Metropolis to serve as a new engine for its future growth.

The comments come as the Hong Kong Special Administrative Region government prepares the annual Policy Address, which is scheduled for Oct 16.

“Family offices have emerged as a vital engine of growth for Hong Kong's wealth management industry, with over 2,700 single-family offices calling the city home,” Deloitte Private Hong Kong leader Anthony Lau said.

The firm said it believes Hong Kong could further unleash its potential in the field by attracting mainland high-net-worth individuals to develop business in the city through a three-step strategy.

In the first step, mainland high-net-worth individuals in the Guangdong-Hong Kong-Macao Greater Bay Area would be allowed to legally transfer an approved quota of renminbi to Hong Kong for setting up family offices and investing in low-risk products.

The second step would expand the pilot program from the GBA to the entire country, and the third step would focus on increasing the cross-border investment quota for mainland investors’ Hong Kong family offices and broaden the range of permissible investments to high-risk products.

The firm also suggests that a new “Family Office Connect” be established to facilitate cross-border investments through Hong Kong-based family offices.

While promoting financial connectivity with the Chinese mainland, the SAR is also making big strides in strengthening financial collaboration with overseas markets, with a focus on the Association of Southeast Asian Nations and the Middle East.

To attract more capital from the regions, a 5 percent profits tax concession is advised for regional fund management headquarters established in Hong Kong by Gulf Cooperation Council (GCC) sovereign wealth funds to strengthen the city’s role as a “superconnector” between GCC sovereign funds, mainland markets and other major Asia-Pacific economies, the firm said.

Meanwhile, the development of the Northern Metropolis is another focus point in Deloitte’s report.

The HKSAR government unveiled the Northern Metropolis Action Agenda in October, which laid out its development blueprint in detail. The mega project is expected to provide about 500,000 new housing units and create 500,000 new jobs upon full development.

While the government has put forward a number of infrastructure and development projects, substantial financial resources are required, given the scale and ambition of those initiatives,  highlighting the need to leverage market capital and forge deeper, more innovative partnerships with the private sector, Deloitte said.

While Deloitte supports the government’s “local district” development approach, it suggests “a phased approach by piloting a ‘local district’ in mature areas with industry development potential”, said Alvis Kong, Deloitte China strategy and economic advisory partner.

“In addition to clearly defining district asset portfolios and rules for potential investors, the government could broaden partnerships and harness unique strengths of diverse enterprises by inviting local firms, mainland State-owned and private companies, and international corporations to participate in district development,” Kong said.

A “local district” development approach would harness market forces to co-invest in the project. Different from traditional public-private partnership, partnering enterprises in “local district” take on a more comprehensive role, extending beyond mere construction and industry operation to include crucial preliminary land formation and infrastructure development.

Contact the writer at thor_wu@chinadailyhk.com