HK to enhance tax regime for funds and family offices, Hui says

Hong Kong will roll out a series of measures to enhance the preferential tax regime for funds and family offices in a bid to attract them to establish a presence in the city, Secretary for Financial Services and the Treasury Christopher Hui Ching-yu said. 

Tax treatment is often a key consideration when funds and family offices decide where to set up, Hui said during a LegCo meeting on Monday. 

To further enhance the attractiveness and competitiveness of Hong Kong’s preferential tax regime, the government has proposed improvements, including:

• broadening the definition of funds to cover retirement funds, endowment funds and certain single-investor funds; 
• expanding the scope of qualifying investments; 
• relaxing tax exemption arrangements for specified entities; 
• relaxing the anti-avoidance provisions under the unified funds exemption regime
• enhancing the tax concession arrangements for carried interest.
• introducing a tax reporting mechanism to ensure effective regulation.

The government will introduce substance requirements similar to those under the tax concession regime for family-owned investment holding vehicles for the unified funds exemption regime. They include having at least two qualified employees and spending HK$2 million on operations in Hong Kong each year, Hui said. 

In addition, a tax reporting mechanism is proposed to ensure effective regulation and compliance with international standards on tax transparency, he said.

Hui believes the proposed enhancements will attract more funds and family offices to establish and operate in the SAR, creating new business opportunities for the city’s asset and wealth management industry and reinforcing the city’s position as a leading asset and wealth management hub.

The government aims to introduce an amendment bill into the Legislative Council in the first half of 2026, he said.