Strengthening Hong Kong's Appeal: Strategies to Retain and Attract Family Offices
Hong-Kong, a pivotal financial hub in the Asia-Pacific region, is intensifying efforts amid increasing competition from cities like Singapore by enacting new legislation to attract high-net-worth individuals and single-family offices with tax exemptions and incentives for investment activities. Supported by a $100 million fund allocated to InvestHK, this initiative aims to bring in an additional 200 family offices by 2025, as reported by the South China Morning Post on October 6, 2023. Beyond its vibrant economy and iconic skyscrapers, Hong Kong is increasingly recognised as a premier destination for family offices globally, boasting a significant concentration of ultra-high-net-worth individuals and solidifying its appeal as a top choice for managing substantial investment portfolios.
Family offices in Hong Kong cater exclusively to ultra-high-net-worth families, offering comprehensive financial and lifestyle management services. They serve as all-encompassing advisors, handling investment management, estate planning, philanthropy, and personalised concierge services to ensure the preservation and growth of wealth across generations.
The "Wealth for Good in Hong Kong" initiative led by the Financial Services and the Treasury Bureau promotes technology, green finance, and art in family office operations. It complements the Capital Investment Entrant Scheme (CIES), facilitating immigration for wealthy individuals and family offices through investments in Hong Kong's asset markets, including equities, government and corporate bonds, subordinated debts, and approved collective investment schemes in Hong Kong dollars and RMB. Successful applicants, along with their spouses and unmarried dependent children, can obtain permanent residency.
Hong Kong aims to strengthen its global standing in asset and wealth management by proposing profits tax exemptions for family-owned investment holding vehicles (FIHVs) managed by single family offices, pending Legislative Council approval. A recent tax concession bill has been passed to exempt profits earned by eligible family offices' FIHVs managed or controlled in Hong Kong during the assessment year, contingent upon meeting a minimum asset threshold of HK$240 million (around $30 million).
Hong Kong's rise as a leading hub for the family office industry is supported by its strategic location, strong financial infrastructure, and supportive economic policies, including the "One country, two systems" framework. Government initiatives such as tax exemptions, funding opportunities, and philanthropic support attract mainland Chinese wealthy individuals seeking stability and autonomy. Hong Kong aims to solidify its position as the preferred choice for family offices in the Asia-Pacific region. The FamilyOfficeHK team, part of InvestHK, will launch a Network of Family Office Service Providers to foster communication on policy developments and promote Hong Kong's opportunities globally.
The Hong Kong government is unequivocally dedicated to creating a robust and competitive environment that offers substantial advantages for family offices considering relocation or establishment in the city. These initiatives are a positive step forward for a metropolis that has faced significant challenges over the past four years and is now striving to rejuvenate and reaffirm its stature as a global financial centre.
At Bolster Group, our team brings extensive expertise in incorporating and implementing the legal framework for Hong Kong Family Offices. Contact us to discover how we can provide tailored support and guidance.