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Financial Secretary John Tsang
At the end of 2013, the combined fund-management business in Hong Kong had climbed to US$2 trillion, up 27% over the previous year.
And we're working to make it even stronger. Earlier this month, my colleagues briefed our legislators on a proposal to extend the profits tax exemption for offshore funds to private equity (PE) funds.
Indeed, we expect to introduce a Bill on this into our legislature shortly.
For good reason. More than Asia's asset-management hub, Hong Kong is also a key player in regional PE funds. In fact, more than 350 companies here manage PE funds, with the capital exceeding US$110 billion. That accounts for more than one-fifth of Asia's total.
And there's more. Hong Kong's fund-management business specialises in serving global clients. Over 70% of our fund-management business comes from non-Hong Kong investors, and our fund managers invest almost 80% of their clients' funds outside Hong Kong.
With that in mind, we introduced, several years ago, profits tax exemptions for offshore funds. That concession has helped attract new funds to base here in Hong Kong, while encouraging existing funds to continue investing here.
The extension of the profits tax exemption to private equity will broaden our fund-management business, boosting Hong Kong's reputation as a full-service asset-management hub.
That, I'm sure, will bode well with our friends here in asset management, investment and advisory services. It will also expand demand for business consulting, tax, accounting and legal experts in Hong Kong.
We are developing the proposal to allow funds to be set up in an open-ended structure. This should encourage even more funds to set up in Hong Kong. And that can only strengthen our fund-creation capabilities.
Financial Secretary John Tsang gave this speech at the Asian Financial Forum 2015 cocktail reception.
