Policy Statement & Submission


Enhancing Hong Kong’s status as a hub for Family Offices

26 November 2021

Mr Christopher Hui Ching-yu, JP
Secretary for Financial Services & the Treasury 
Financial Services and the Treasury Bureau 
24/F, Central Government Offices
2 Tim Mei Avenue, Tamar 
Hong Kong 

Dear Chris,

Measures to Enhance Hong Kong’s Competitiveness as a Hub for Family Offices

The Hong Kong General Chamber of Commerce is pleased to submit our recommendations on measures to enhance Hong Kong’s competitiveness as a hub for family offices. 

The rise of family families offers considerable opportunities especially for international financial centres such as Hong Kong, which offers considerable advantages whether in terms of managing assets and investments or as a place to live.  As a leading international business city, we are well-placed to serve as a hub for family offices regardless of their place of origin. 

To support the Government’s efforts in promoting the SAR as a prime location for family offices, we have identified a number of policy issues that should be addressed if Hong Kong were to respond to the needs of global families and compete as the location of choice.

We hope you will find our suggestions useful and welcome the opportunity for further discussion. 

Yours sincerely,


George Leung 



Submission by the Hong Kong General Chamber of Commerce on
Measures to Enhance Hong Kong’s Competitiveness as a Hub for Family Offices

In his Budget Speech earlier this year, the Financial Secretary announced the establishment of a dedicated office in InvestHK to provide one-stop support for family offices interested in establishing a presence in Hong Kong. At the same time, the Administration undertook to review the tax code to enhance the city’s attractiveness as a hub for family offices. 

The Hong Kong General Chamber of Commerce welcomes such efforts. We believe that in addition to taxation issues consideration should also be given to cultivating an environment in Hong Kong that is conducive to fulfilling the policy objective of becoming a preferred destination for ultra-high net worth (“UHNW”) individuals to manage their wealth and financial affairs. Our views on achieving such an outcome are set out below. 

Current Family Office Landscape

1.    The proliferation of information and being intrinsically well-resourced mean that family offices are, more than not, aware of, conversant in and up to date on the tax and regulatory regimes across multiple jurisdictions. That means only impactful policy changes would have the effect of inducing family offices to consider relocating to another jurisdiction. 

2.    Hong Kong faces stiff competition from neighbouring jurisdictions, most notably Singapore, in attracting family offices especially those from UHNW entities. The attitude and support from senior officials of the Singapore government as well as the introduction of preferential policies such as targeted subsidies, exemptions and incentives are perceived as providing a hospitable and welcoming environment for family offices.  

3.    In addition to tax issues, the ability to attract and retain quality talent is also an important consideration for family offices, which often compete with financial institutions for a limited pool of skilled labour with the latter perceived as offering better career prospects relative to the former. 

4.    The current generation of UHNW families, especially those from the Mainland, generally favour Hong Kong as a location to manage their wealth and affairs. It is however uncertain whether future generations share the same sentiment in view of the social unrests and subsequent developments in Hong Kong, as well as geopolitical challenges arising from the ongoing US-China rivalry. 

5.    For the purpose of hedging investment risks and because of the entrenched perceptions (of a negative nature) towards Hong Kong in Western economies, it is quite common for UHNW individuals to set up offices across multiple locations. Therefore, apart from looking at ways to increase the number of family offices in Hong Kong, attention should also be directed at capturing a larger share of the global transactions conducted by family offices.  

Taxation Measures

6.    We suggest that tax treatment for individuals be granted to investment income derived by family office corporate entities, such as Personal Investment Companies (“PICs”). Under current practice, investment income for individuals is exempted from profits tax but PICs do not enjoy such an exemption. As family offices usually conduct investment activities through a corporate vehicle and in the form of a PIC, the existing tax arrangement has the effect of discouraging UHNW families from setting up office in Hong Kong. PICs should be entitled to the same tax benefit as individuals provided that the former fulfil certain commercial conditions. It is useful to note that in January 2020, Singapore introduced a new type of corporate entity called Variable Capital Company (VCC), which is eligible for a grant scheme (capped at SGD150,000) to help alleviate the cost of incorporation. VCCs also offer such advantages as a flexible structure, protection of stakeholder information and a friendly tax regime. Since its launch a little over a year ago, the initiative has been successful in attracting more than 300 VCCs across a spectrum of financial services that include asset management, private equity, hedge funds, and trust companies. 

7.    Current tax exemption regimes such as the Unified Funds Exemption and Non-Fund Investor Exemption require regulated entities to be SFC-licensed, a condition not necessary for the establishment of family offices given their business nature. As investments managed by non-SFC licensed family offices may not enjoy tax benefits under current regulations, we suggest that the scope of these regimes be expanded by including family offices under the definition of ‘specified persons.’ At the individual level, considerations should be given to extending the tax concession regime for carried interest to investment professionals employed by family offices to attract high-quality talent, which is elaborated further below. 

8.    The anti-avoidance provision under the foregoing regimes allows the Inland Revenue Department to tax shareholders if they are Hong Kong residents and hold more than 30% interest in investment vehicles. This means family office investments that are owned primarily by Hong Kong residents might not be able to enjoy tax benefits currently on offer. We recommend the Government exclude Hong Kong individuals, who are not in the business of securities trading or dealings from the anti-avoidance provision. 

Non-taxation Measures

Institute a Family Office-friendly Regime

9.    Overzealous administration and rigid interpretation of policies are regarded as at odds with the Government’s goal of incentivising investment activities in Hong Kong. Despite the introduction of a wide range of tax exemption and concessionary regimes, the narrow interpretation by tax authorities and excessive conditions imposed have the effect of complicating applications for tax benefits. 

10.    If the city is intent on promoting itself as a premier hub for family offices, the SAR should send a positive message to the industry by aligning administrative actions with policy objectives. For example, the eligibility criteria for tax exemptions as mentioned in the preceding section on taxation measures should be moderated to enable easier access by UHNW families.

Establish a One-Stop Office

11.    We note that InvestHK has established FamilyOfficeHK in June this year to serve as the central point of contact, which is capable of providing substantive assistance to family offices looking to set up and operate in Hong Kong. 

12.    We also suggest that the office’s portfolio be expanded to initiate programmes, which include tax and other policy incentives, with the objective of attracting family offices to set up in Hong Kong. Part and parcel of such an expanded brief would include coordination with professional service firms such as those in auditing and law, formulating talent standards, and building a network comprising associations and practitioners to construct a robust ecosystem to cater to the needs of family offices.

13.    This office should also promote and foster an attitude of open-mindedness among civil servants whose conservativeness should be substituted with a flexible mindset that is conducive to promoting the SAR’s competitiveness and attractiveness as a regional or international hub for family offices. Such a cultural change should not be limited to family office policy development but adopted throughout the government to enhance Hong Kong’s status as an open business environment. 

Attract and Nurture High-Quality Talent

14.    We suggest that efforts be made to attract overseas talent while investing in grooming and retaining a local workforce to address the chronic shortage of high-quality family office professionals, especially those with expertise in emerging and new investment products, and the issue of staff turnover arising from the proclivity for job-hopping among younger employees.

15.    This is because, as mentioned above, family offices have to compete with global investment and private banks for talent. Other reasons include the risk of a brain drain in Hong Kong, as an increasing number of professionals - including those in their 30s or older in middle to senior management positions – plan to depart or have already left the city. There is the need to provide a better understanding of career advancement opportunities for local family office professionals to attract and retain talent.

16.    On top of attracting talent to Hong Kong, efforts should be made to cultivate homegrown talent through the design and delivery of degree or diploma courses that cater to family offices. In that respect, proactive measures must be taken to involve tertiary institutions to develop a pool of talent with skillsets that are relevant to market demands.

17.    Hong Kong does not currently draw any distinction between an office that has been established to serve family members and an independent asset management organisation that has been set up to serve a diverse client base in its approach to the licensing and regulation of these entities. Consideration should be given to providing regulatory clarity and certainty in the regulation of family offices. This would not only help attract talent but would also benefit the financial services industry as a whole. 

18.    Consideration should also be given to developing non-financial incentives when it comes to attracting millennial talents who usually prioritise the importance of a purpose-led work culture over monetary compensation. 

Attract Mainland and Overseas UHNW Families

19.    We suggest that the Government focus on addressing the needs of Mainland UHNW families by continuing to emphasize Hong Kong’s role as a springboard to international markets while continuing to serve as a foothold for their business operations. Easing some of the existing travel restrictions and other pandemic-related measures would also enhance Hong Kong’s competitiveness in attracting Mainland family offices.

20.    Consideration should also be given to attracting UHNW families subject to high inheritance tax in their home countries, such as France, to set up office in Hong Kong.

21.    Under its Global Investor Programme, Singapore extends its offer of Permanent Residence status to qualified family office principals. This offer has been well-received in the market, especially for UHNW individuals in the Mainland that have been considering the establishment of their family offices. We suggest the Government introduce a similar incentive scheme to maintain Hong Kong’s competitiveness as a hub for family offices.

Facilitate the Needs of Shareholder Families 

22.    There is the trend for more UHNW individuals to leverage resources by taking up the role as shareholders of existing family office platforms in Hong Kong. These platforms are not necessarily multi-family offices but usually established by groups of shareholder families to deliver more sophisticated investment solutions rather than providing advisory services only. As such, we suggest that consideration should be given to facilitating multiple family offices from overseas to take a stake in such platforms and enabling them to share the infrastructure as well as resources from the SAR as a satellite hub. To that end, we look forward to further discussions with the Government on the specifics of this proposal if and when necessary. 




26 November 2021
HKGCC Secretariat


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