Proposed family office tax concession regime in Hong Kong – key regulatory, tax and legal considerations

July 2022

The Hong Kong SAR government recently issued a public consultation in relation to a proposal to provide tax concessions to family-owned investment holding vehicles (‘FIHVs’) managed by single family offices (‘SFOs’) in Hong Kong (the ‘Proposal’).

The Proposal is part of a move by the Hong Kong Government to attract family offices to set up and operate in the territory, and follows from a circular issued by the Securities and Futures Commission (‘SFC’) back in January 2020 in relation to the licensing obligations of family offices (the ‘SFC Circular’). The Proposal has, therefore, been highly anticipated by the market for some time, and it is hoped that the tax concessions, if implemented (as early as for the year of assessment 2022/23), will entice more family offices to set up and operate in Hong Kong (a timely step, given the efforts that have been made by the Singapore government to do the same there).

While the Proposal and the SFC Circular do not completely align (for example, the SFC does not define ‘family office’ while in the Proposal, ‘family offices’ are defined as private wealth management firms set up by ultra-high-net-worth individuals), the fact that there is now a somewhat ‘complete’ regime that has been sketched out addressing both regulatory and tax issues provides an important roadmap for the way forward.  In this article, we will provide a high level review of the regime and highlight how we can assist with family offices looking to set up in Hong Kong from regulatory, tax and legal perspectives.