Family office policy stated

March 24, 2023

The Government today issued the Policy Statement on Developing Family Office Businesses in Hong Kong, which sets out its policy stance and measures on developing a vibrant ecosystem for global family offices and asset owners.


It explained that the aim of its policy measures is to create a conducive and competitive environment for the businesses of global family offices and asset owners to thrive in Hong Kong.


Based on the original Capital Investment Entrant Scheme, the Government proposes that the permissible assets for the new scheme should include equities listed in Hong Kong; debts issued or fully guaranteed by companies listed in Hong Kong, by the Government, or by other corporations, agencies or bodies wholly or partly owned by the Government; subordinated debts issued by authorised institutions; and eligible collective investment schemes.


Besides assets denominated in Hong Kong dollar, assets denominated in renminbi will also be considered. Upon approval, applicants may reside and pursue development in Hong Kong along with their spouse and dependant unmarried children. Details of the scheme will be announced later.


Subject to approval by the Legislative Council, profits tax exemption will be provided to family-owned investment holding vehicles (FIHVs) managed by single family offices in Hong Kong. The Government will also further review the existing preferential tax regimes for funds and carried interest.


The Securities & Futures Commission has recently issued a few quick reference guides to address frequently-asked questions about licensing requirements, with one specifically catering for family offices.


The Government noted that having due regard to investor protection, regulators will introduce a set of more risk-based measures to streamline intermediaries' suitability assessment and disclosure process for sophisticated or ultra-high-net worth individual clients.


Additionally, it will fund the setup of a new Hong Kong Academy for Wealth Legacy under the Financial Services Development Council.


It will also offer talent development services to industry practitioners and next-generation wealth owners, with a view to cultivating a deep talent pool for the family office sector in Hong Kong.


Moreover, the Government pointed out that the Airport Authority is exploring the establishment of storage, display and appreciation facilities for art and treasures at the Hong Kong International Airport. The move will enable global family offices with capital allocation in art to benefit from the city’s thriving art ecosystem.


It added that its goal is to develop Hong Kong into a philanthropic centre for global family offices and enable philanthropists to deploy charitable capital benefiting Hong Kong, the Mainland and overseas.


As part of that objective, it will enhance the processing of applications for recognition of tax exemption status of charities.


For tax exemptions offered to FIHVs managed by single family offices in Hong Kong, the Government plans to enhance the legislative proposal by expanding the extent of the beneficial interest that an exempted charity may hold in an FIHV.


Meanwhile, the dedicated FamilyOfficeHK team under InvestHK will expand its role to cover services like facilitating philanthropic endeavours of wealth owners and assisting in education related matters.


The FamilyOfficeHK team will also convene and launch a new Network of Family Office Service Providers, covering private banks, accounting and legal firms, trusts and other professional services firms.


The network will provide a two-way channel between the Government and the industry to communicate on the latest policy development, and mobilise the industry's global network to advocate and promote the opportunities in Hong Kong for family offices.

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