Lee: all legal money welcome as investor tax breaks in offing

Family offices as well as investments from ordinary people and sovereign wealth funds are welcome in Hong Kong as long as they are legitimate, says Chief Executive John Lee Ka-chiu.

Lee, speaking before an Executive Council meeting yesterday, said family offices are "super-valued asset owners" that will bring strong economic and financial benefits to the city.

His comments came after it emerged the government overlooked carrying out due diligence on Dubai prince Sheikh Ali Rashed Ali Saeed Al Maktoum, who postponed the opening of his family office in Hong Kong under controversial circumstances.

Lee said the government will invite as many family offices as possible as long as they have legal money.

"We welcome it [investment], whether he is a man in the street or he comes from a wealthy family or it is a sovereign fund," he said.

Lee said the government has been working to improve Hong Kong's attractiveness to family offices, such as introducing legislation to give tax concessions to family offices, businesses and investments.

"All cities, all economies strive to attract [family offices] to come and the government should not always just be passive in this competitive world," he said, adding his administration will also balance the benefits and risks when inviting family offices.

Lee was asked if the lack of background checks on Sheikh Maktoum would have an impact on luring other family offices. He did not directly reply to the question.

Maktoum, reportedly a nephew of Dubai's ruler Sheikh Mohammed Bin Rashid Al Maktoum, revealed his plan to set up a private office in Hong Kong with US$500 million (HK$3.9 billion) last month.

He was invited to the Wealth for Good Summit in Hong Kong on March 27. It was a high-profile event organized by the government to attract family offices.

But the same night, Maktoum made a last-minute announcement of delaying the March 28 launch ceremony of his family office in Sheung Wan to the end of May. The office said Maktoum decided to postpone due to "urgent and unexpected" personal matters and reassured that the office will operate in Hong Kong as planned.

It later emerged that he is a member of a distant branch of the ruling family and has another identity as a popular singer called Alira, with a fan base in the Philippines.

Maktoum was also appointed an honorary professor at Hang Seng University and signed a memorandum of understanding with the university earlier but the university deleted relevant press releases this month.

His family office website and LinkedIn page also went offline on April 10. Both pages went online the next day but were again inaccessible as of yesterday.

Lawmakers urged the government to conduct thorough due diligence when importing overseas capital.

Speaking at the special meeting of the Legislative Council finance committee yesterday, Secretary for Financial Services and the Treasury Christopher Hui Ching-yu said regulatory agencies have formed a professional service alliance and intermediaries can obtain relevant information from the government.

Alpha Lau Hai-suen, director-general of investment promotion at InvestHK, a government department, said banks and fund management companies will conduct due diligence and Hong Kong welcomes investors with different nationalities and backgrounds.

ayra.wang@singtaonewscorp.com