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Family offices in Hong Kong: The #1 choice in Asia.

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The Hong Kong government is working hard to promote the city as a prime location for family office setup. These efforts are starting to pay off, as Hong Kong is winning the race to attract ultra-high-net-worth individuals in Asia. But what makes Hong Kong so attractive? This article aims to provide potential investors with a comprehensive understanding of the family office landscape in Hong Kong.

The appeal of Hong Kong for family offices

Hong Kong is home to more than 2,700 single-family offices, and the city aims to attract 200 more by 2025. By comparison, this is nearly twice the size of Singapore (1,400 as of Dec. 2023). This growth is driven by the city’s robust financial infrastructure, strong regulatory framework, and access to diverse talent and investments.

Hong Kong’s government has introduced new incentives to attract more family offices. This move is part of the government’s broader strategy to position Hong Kong as a leading hub for Asian family offices. The key features include:

Ease of registration

The procedure for establishing a family office in Hong Kong is similar to setting up any other company in the city. This involves complying with general legal, tax, and compliance reporting requirements. There are generally two types of family offices: single and multi-family.

  • Single-family offices (SFOs): These are established to serve the needs of a single family. They manage the assets and needs of high-net-worth individuals and families. The key requirement for a single-family office under the new regime in Hong Kong is to manage specified assets owned by the family (AUM) of at least HKD240 million. The family must hold at least 95% of the beneficial interest of the single-family office, or 75% if tax-exempt charities hold the remaining 25%.
  • Multi-family offices (MFOs): These serve multiple ultra-high-net-worth families. It is common for a multi-family office to obtain various types of licenses under the Securities and Futures Ordinance (SFO), such as Type 1 (dealing in securities), Type 4 (advising on securities), and Type 9 (asset management). If the family assets include futures or option contracts, it may also need licenses for Type 2 (dealing in futures contracts).

Tax benefits 

Hong Kong operates a two-tiered profits tax system. The first HK$2 million of corporate profits is taxed at 8.25%, and profits above HK$2 million are taxed at the standard rate of 16.5%. This system provides a low and competitive tax environment for businesses, including family offices.

In addition, Hong Kong offers significant tax benefits specifically for family offices. The government has introduced a new tax regime that provides tax concessions for eligible family-owned investment holding vehicles managed by single-family offices in Hong Kong and family-owned special purpose entities.

Under this new regime, profits from qualifying and incidental transactions are exempted from profits tax in Hong Kong. This means that assessable profits derived by Family Investment Holding Vehicles (FIHVs) owned by ultra-high-net-worth individuals and their family members from qualifying and incidental transactions are subject to a 0% tax rate, provided they fulfil the specified conditions. This exemption further enhances the appeal of Hong Kong as a hub for family offices.

Here is the link to Acclime tax advisory services for more tax information.

Ease of residency & visa application 

Obtaining a work visa or residency is generally straightforward for family offices considering Hong Kong. A visa or entry permit is required unless an individual has the right of abode or right to land in the HKSAR. Unlike its regional peers, such as Singapore, Hong Kong offers a much simpler application process and a faster processing time: for example, a work visa is usually approved in approximately six weeks.

In addition, Hong Kong facilitates the immigration process for financial services professionals, including those working in family offices. The government has introduced measures to facilitate this process, which include expedited visa processing and potential eligibility for various immigration schemes. One is the Quality Migrant Admission Scheme (QMAS), a quota-based entrant scheme that seeks to attract highly skilled or talented persons to settle in Hong Kong.

Please consult our website to learn more about the immigration schemes in Hong Kong.

Family office ecosystem in Hong Kong vs Singapore

Hong Kong and Singapore often compete to attract family offices. Here is an overview of the key differences between these two locations:

  Hong Kong Singapore
Overall benefits
  • Business-friendly jurisdiction
  • Strategic hub in Asia
  • Strong financial hub
  • Economic and political stability
  • Robust wealth management ecosystem
  • Vibrant start-up scene
Tax benefits
  • No sales tax or VAT, withholding tax, capital gains tax, tax on dividends, or estate tax.
  • Investment profits from qualified assets include securities, bonds and funds are eligible for profits tax exemption.
  • Incidental income arising from holding qualified assets, such as interest from bonds can be exempted from profits tax (subject to a 5% threshold).
  • Corporate tax is charged at a flat rate of 17%.
  • No capital gains tax or estate tax, and has an extensive network of double tax and investment treaties.
  • Goods & Service Tax (GST i.e. VAT equivalent) at 9%
  • Programmes (S13U, S13O) allow almost all investment profits to be exempted from Singapore income tax.
  • Approved qualifying donors will be able to claim a 100% tax deduction of the donation amount (capped at 40% of the donor’s total income for that year). Incentive available for 5 years.
Investment requirement No local investment requirement. Invest S$10 million or 10% of its total assets under management (AUM) – whichever is lower – in certain eligible investment.
Assets-under-management (“AUM”) requirement At least HK$240m in qualified assets. S$20m (S13O) or S$50m (S13U) in Designated Investments.
Approval requirement
  • Easy registration, no separate application or pre-approval requirement.
  • No regulatory licensing requirement.
  • Applications for the S13O and S13U must be submitted to the MAS for approval.
  • No regulatory licensing requirement.
Spending requirement Minimum HK$2m of local operating expenditure. Minimum S$200,000 in Local Business Spending across all AUM sizes.
Employees requirement At least 2 full-time qualified employees who can be family members. At least 2 Investment Professionals (IPs) (S13O) or 3 IPs (S13U), with at least 1 IP who is not a family member.

Streamline your family office with Acclime’s expert support

Acclime offers a comprehensive suite of services to assist in setting up your family office in Hong Kong. Our solutions include:

  1. Market insight:Leveraging our deep knowledge of the Hong Kong market, we provide valuable insights to help you understand the local business environment and regulatory landscape.
  2. Setup assistance:We guide you through establishing a family office in Hong Kong and handling all the necessary legal and compliance requirements.
  3. Regulatory guidance:We provide guidance on critical considerations such as tax benefits, ease of residency, and visa application processes in Hong Kong.
  4. Tax planning: Acclime offers regional tax advisory services tailored to family offices, companies, and individuals’ unique needs.
  5. Ongoing support:Once your family office is set up, we provide support and advice to ensure smooth operations.

Contact us today to learn more about how Acclime can assist you in navigating the family office landscape.

About Acclime.

We are a premier provider of professional formation, accounting, tax, HR & advisory services in Hong Kong, focusing on providing high-quality outsourcing and consulting services to our international clients in Hong Kong and throughout the region.

Family offices in Hong Kong: The #1 choice in Asia