Gov’t lays out policies, measures on family office businesses

Amongst measures include profits tax exemption for family-owned investment holding vehicles.

The government has issued the Policy Statement on Developing Family Office Businesses in a bit to create a conducive and competitive environment for the businesses of global family offices and asset owners to thrive in the city.

Amongst measures proposed by the government is to include the following as permissible assets under the Capital Investment Entrant Scheme: equities listed in Hong Kong; debts issued or fully guaranteed by companies listed in Hong Kong, by the Government, or by other corporations, agencies or bodies wholly or partly owned by the Government; subordinated debts issued by authorised institutions; and eligible collective investment schemes.

The government said assets denominated in renminbi will also be considered. 

“Upon approval, applicants may reside and pursue development in Hong Kong along with their spouse and dependent unmarried children,” added the government.

The government is also lobbying for a profits tax exemption for family-owned investment holding vehicles (FIHVs) managed by single-family offices in Hong Kong. 

For tax exemptions offered to FIHVs managed by single-family offices in Hong Kong, the government plans to enhance the legislative proposal by expanding the extent of the beneficial interest that an exempt charity may hold in a FIHV.

The government will also further review the existing preferential tax regimes for funds and carried interest.
 
“The Securities & Futures Commission has recently issued a few quick reference guides to address frequently asked questions about licensing requirements, with one specifically catering for family offices,” the government said. 

“Having due regard to investor protection, regulators will introduce a set of more risk-based measures to streamline intermediaries' suitability assessment and disclosure process for sophisticated or ultra-high-net worth individual clients,” the government added.

Other measures under the policy statement include the establishment of a new Hong Kong Academy for Wealth Legacy under the Financial Services Development Council, the establishment of storage, display and appreciation facilities for art and treasures at the Hong Kong International Airport; development of Hong Kong into a philanthropic centre for global family offices and enable philanthropists to deploy charitable capital benefiting Hong Kong, the Mainland and overseas; and expansion of FamilyOfficeHK team’s role to cover services like facilitating philanthropic endeavours of wealth owners and assisting in education-related matters.