In March this year, Hong Kong government issued a policy statement on developing family office businesses in Hong Kong (Policy Statement), whereby it was announced that a range of policy measures will be further introduced to create a conducive and competitive environment for global family offices to operate in Hong Kong. Besides the family office tax concessions now in place, the market can look forward to other measures, including a proposed reintroduction and expansion of the Capital Investment Entrant Scheme (CIES), efforts to develop Hong Kong into a philanthropic centre for global family offices and philanthropists, and proposed streamlining of applications for recognition of tax-exempt status of charitable entities.

The Inland Revenue (Amendment) (Tax Concessions for Family-owned Investment Holding Vehicles) Ordinance 2023 was gazetted on 19 May 2023 (the Family Office Tax Concessions Ordinance or the “Ordinance” hereafter), and will apply with immediate effect to years of assessment commencing on or after 1 April 2022.

The Ordinance provides a package of tax incentives intended to attract and  encourage high net worth private families to set up family office in Hong Kong and operate family-owned investment holding vehicles (FIHVs) from Hong Kong. This is a much-anticipated development welcomed by the market to bolster opportunities in Hong Kong as a premier family office hub, enhancing the city’s well established position as an international asset management and wealth management centre.

The keypoints of the related tax concessions and licensing requirements for single-family offices are summarized here.