Hong Kong's ascent as a prime destination for wealthy families to establish family offices to manage their wealth and legacies has been nothing short of remarkable. Financial services secretary Christopher Hui Ching-yu's recent remark on how quickly the number of these offices has been growing was another shot in the arm.

The city has pulled ahead of its rival Singapore at least in numbers.

As of late 2023, Hong Kong hosted around 2,700 single-family offices or SFOs. The government's InvestHK aims to add 200 more by year-end - a goal Hui said the city could readily beat.

In contrast, Singapore had around 1,400 SFOs as of 2023. Its growth has apparently slowed since it cracked down on a major money laundering case involving US$2.3 billion (HK$17.94 billion). The nation subsequently tightened scrutiny of the money source.

Hong Kong's proximity to mainland China makes it a natural choice for families seeking to tap into the Chinese markets or manage wealth tied to the country.

In 2023, family offices and private trust clients in Hong Kong managed HK$1.45 trillion worth of assets, a 76-percent jump from HK$825 billion in 2017, according to Securities and Futures Commission of Hong Kong.

No official breakdowns on nationalities are offered though various sources estimated that between 60 and 70 percent of the SFOs here are related to mainland families, 10 to 15 percent connected to Southeast Asian clans, 5 to 10 percent tied to Middle East's ultra-rich eyeing China's tech and infrastructure and a smaller number from the West seeking to diversify into the Asia-Pacific markets.

Singapore has been historically attractive to families from mainland China until the money laundering crackdown in 2023.

Compared to Hong Kong, Singapore has got fewer wealthy Chinese families - around 40 to 50 percent, according to estimates. However, its central location in Southeast Asia has won it more families from the Southeast Asian region.

Hong Kong's quick rise as a magnet for SFOs is truly eye-opening.

Some big names are already here. There are SFOs linked to the local Cheng, Kwok and Li families running some of the city's largest business empires. The Guo family of the mainland's Fosun International uses Hong Kong to spread their investment. Even Saudi Arabia's Al-Rajhi family is reported to be eyeing it to connect with the Chinese markets.

For example, Knight Frank's global research head Liam Bailey said he is expecting family offices to increase their investment in Hong Kong's real estate over the next 18 months.

Obviously, they know the city has a world-class financial system with plenty of investment options in addition to a legal system the commercial world understands.

The government's policy is a magnet. Families managing at least HK$240 million are treated with tax concessions. Anyone investing HK$30 million can secure residency quickly by the New Capital Investment Entrant Scheme. It is truly a red carpet for those who want a base in Asia.

Hong Kong's soft regulations make things easy, enabling a SFO to set up and start running in weeks - compared to Singapore's lengthy scrutiny that can last over a year before a SFO can be launched.

The catch is that openness also demands strong safeguards to stop shady money from flowing in if the city is to retain honest players. Back then, government officials had vowed only clean cash would be welcome.

Christopher Hui is confident of reaching the target of 200 new family offices this year.

Singapore left in the dust as family offices flock to city