Hong Kong ramps up efforts in bid to become regional fund service centre hub

These include a proposal for the tax exemption for open-ended fund companies (OFC).

In its bid to be a fully-fledged fund service centre, Hong Kong is ramping up efforts to broaden its fund distribution network and create a more favourable business environment, according to a press release quoting Finance Secretary Paul Chan in the Asian Private Equity Forum.

These efforts include an open-ended fund company (OFC) structure which aims to give fund manager an additional choice and is slated for implementation later this year. 

Chan also proposed to extend profits tax exemption to onshore, privately-offered OFCs which is pending passage in the Legislative Council. 

This means that once legislative amendments are passed, all OFCs – regardless of publicly or privately offered, onshore or offshore – will get to enjoy tax exemption.

Similarly, the Securities & Futures Commission is negotiating mutual recognition of funds arrangements with several other jurisdictions to add to its growing list of fund management distribution partners like the Mainland, Switzerland and France. 

Chan added the Hong Kong is deepening economic ties with the Mainland as it explores the possibility of exchange-traded funds in mutual access schemes and extending Stock Bond Connect to cover south-bound trading. 

“Business-friendly, capital-rich, super-connected Hong Kong is flush with more than money. Our ambition is equally outsized, as in our ability and resolve to realise whatever is we set out to achieve.”

Photo from Kent Wang - originally posted to Flickr as Hong Kong skyline, "A Symphony of Lights", CC BY-SA 2.0