Hong Kong lures family offices as charm offensive pays off
Hong Kong has successfully attracted some “top-class” family offices to set up operations in the city following a series of government events and incentives, the financial chief said on Monday.
Hong Kong Financial Secretary, Paul Chan Mo-po, told a family office event that the city would soon see some of the world’s leading family offices establish a presence in Hong Kong, with “a lot more” in the pipeline.
The Hong Kong government's Wealth for Good family office summit held in late March hosted more than 200 top family office owners and managers who gathered in the city to learn about incentives in terms of sustainability, technology, philanthropy, and art, Chan said.
AsianInvestor understands that family offices from mainland China, Southeast Asia and Middle East accounted for a large portion of guests who attended the government summit in March.
“Now, after the summit, we are pleased to report that you will be seeing some of them to be located here, and a lot more others are in the pipeline," Chan said. He did not specify numbers or types.
The financial chief made the remarks at the launching ceremony for a family office professional service provider network hosted by Family Office Hong Kong, the city’s designated family office ambassador, on Monday morning.
The new network comes as part of Hong Kong’s efforts to create a conducive environment for families to set up investment arms in the city.
Bringing together private banks, accounting and legal firms, trusts, and other professional services firms, it aims to facilitate mutual exchanges between the industry and government on policy and best practice, as well as business referrals.
The Hong Kong government has a target of attracting at least 200 family offices to the city by 2025.
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“Hong Kong, with our sophisticated and vibrant financial ecosystem, having the best financial infrastructures and professional services providers like you, we are naturally the location of choice for family offices. Let alone our connectivity with the mainland, providing us with tremendous opportunities, because Hong Kong is the only place in the world where international investment opportunities and mainland investment opportunities converge,” Chan said in the ceremony.
Most recently, a new tax incentive scheme for family offices has come into effect on May 19 in Hong Kong.
Under the new scheme, eligible family-owned investment holding vehicles managed by single family offices will be exempt from profits tax for qualifying transactions in securities, futures, foreign exchange, deposits, exchange-traded commodities, OTC (over-the-counter) derivative products, and investment in private companies.
The tax concession arrangements will be applicable to any years of assessment commencing from April 1, 2022.
Besides the tax breaks, the Hong Kong government also restarted a capital investment entrant scheme that allows investors to be able to reside in Hong Kong along with their family members.
The move is expected to attract, among others, wealthy mainland Chinese business owners who have business presences in both Hong Kong and mainland China, industry players told AsianInvestor recently.
The story has been updated in the 5th paragraph.