Tax perks for funds and family offices set to be enhanced

It hopes to attract more funds to establish a presence in Hong Kong.

Hong Kong plans to enhance the preferential tax regimes for funds and single-family offices as it expects to become “the world’s largest cross-boundary wealth management centre” in the next few years.

This is expected to benefit funds and single-family offices, with the hopes of attracting more funds to establish a presence in Hong Kong, said Chief Executive John Lee in his 2025 Policy Address.

The local Securities & Futures Commission (SFC) will also promote the inclusion of real estate investment trusts (REITs) under mutual market access to increase the liquidity of REITs in the Mainland and Hong Kong, Lee said in his speech on 17 September.

“We will also facilitate the enhancement of the Qualified Foreign Limited Partnerships mechanism, in particular by collaborating with Qianhai and Shanghai to attract more foreign capital to the mainland’s private capital market,” Lee was quoted saying in his address by the government news site news.gov.hk.

The Hong Kong Investment Corporation will nurture local private equity and hedge fund institutions with good potential through direct or co-investment, he added.

Adjustments will also be made to the New Capital Investment Entrant Scheme, such as raising the maximum amount of investment to be counted to HK$15m from HK$10m previously for the purchase of non-residential properties with no transaction price threshold.

As for the purchase of residential properties, the investment to be counted will continue to be capped at HK$10m, but the transaction price threshold will be lowered from HK$50m to HK$30m, Lee said.