Asset and Wealth Management
We strive to develop Hong Kong into an international asset and wealth management centre, leveraging on the opportunities brought by the economic growth and wealth creation in Asia, increase in portfolio allocation to the Asian markets and deepening financial market liberalisation in the Mainland China.
The asset and wealth management business of Hong Kong amounted to around $28.8 trillion (US$3.7 trillion) as at end-2019, with 64% of the fund (excluding the business of SFC-authorised real estate investment trusts and assets held under trusts attributable to non-licensed corporations or non-registered institutions) sourced from non-Hong Kong investors.
Our Ongoing Work
Diversified fund structures – The Government has put in place a legal framework for a new fund structure in the form of open-ended fund company (“OFC”) in Hong Kong since July 2018. With that, a fund can choose to set up in the form of a company, but with the flexibility to issue and cancel shares for investors’ subscription and redemption in the funds.
On 31 August 2020, the limited partnership fund (“LPF”) regime was launched to provide for a new registration regime and enable funds (especially private equity funds) to be constituted in the form of limited partnerships in Hong Kong.
The new options in addition to the unit trust structure will make Hong Kong a more attractive fund domiciliation location and promote fund origination, thereby deepening and broadening our asset management industry.
A more facilitating tax environment – Publicly offered funds (onshore and offshore) can enjoy profits tax exemption in Hong Kong. From 1 April 2019, all privately-offered funds, regardless of their structure, their location of central management and control, their size or the purpose that they serve, can enjoy profits tax exemption for their transactions in specified assets subject to meeting certain conditions.
As announced in the 2020-21 Budget Speech, we will provide tax concession for carried interest issued by PE funds operating in Hong Kong subject to the fulfilment of certain conditions.
Expanding fund distribution network – Hong Kong has reached mutual recognition of funds (“MRF”) arrangement with the Mainland China (2015), Switzerland (2016), France (2017), the United Kingdom (October 2018), Luxembourg (January 2019), the Netherlands (May 2019) and Thailand (January 2021). The MRF arrangement allows eligible funds to be offered directly to retail investors in each other’s market after obtaining authorization or approval under streamlined procedures. The arrangement will be conducive to enriching the types of fund products offered in the participating places and deepen the mutual access between Hong Kong and these financial markets.
Promoting family office business – The family office business has flourished in recent years, becoming an important growth segment in the wealth and asset management industry. To further develop the family office business in Hong Kong, InvestHK set up a dedicated team to step up promotion of our advantages in local and other major markets, and offer one-stop support services to family offices which are interested in establishing a presence here.
Revitalising the Real Estate Investment Trust market – The Government strives to propel the development of Hong Kong into a vibrant Real Estate Investment Trust (“REIT”) market for Greater China and Asia. It will broaden the choice for investors and add diversity, variety and liquidity to our financial market. The government, together with the financial regulators, are exploring various measures to promote the REIT market, including revising the SFC’s Code on Real Estate Investment Trusts to relax investment restrictions imposed on REITs as appropriate, broadening the investor base, facilitating market operation through regulatory enhancements, and stepping up market development and investor education.
For More Information
For more information, please visit the following designated websites/linked documents:
A leading hub for Family Offices, InvestHK, HKSARG https://www.familyoffices.hk/