Hong Kong, mindful of its need to retain and expand its status as an international financial hub, has rolled out measures to attract investment, encourage wealth management and host family offices.
Measures unveiled by Hong Kong’s government this week to boost
asset and wealth management were praised yesterday by Raffles Family
Office as a “major upgrade.”
Yesterday, chief executive John Lee Ka-chiu told lawmakers that
investors could migrate to Hong Kong by buying residential flats
worth no less than HK$50 million ($6.43 million) under Hong
Kong’s residency scheme.
The upgraded Capital Investment Entrant Scheme, which
requires applicants to make at least a HK$30 million investment,
now allows them to buy up flats worth no less than HK$50 million.
In a change to the rules, the amount of real estate investment
that will be counted as part of the total capital investment is
capped at HK$10 million.
The CIES is among a number of measures Hong Kong has unveiled in
recent years as it competes against rival wealth management and
financial hubs such as Singapore and Dubai. In
April, to give one example, Hong Kong said that more than 130
family offices plan to set up or widen operations in the city,
and about three-fifths of these offices are ultimately based in
mainland China. In June 2023, Hong Kong”s government
unveiled its “Network of Family Office Service Providers.”
Raffles Family Office welcomed the enhancements to CIES.
“Building on the success of the relaunched CIES, which have
generated an influx of enquiries, the new enhancements increase
the scheme’s appeal to ultra-high net worth individuals and
families seeking to leverage Hong Kong’s strategic
location, low tax environment, and robust financial
infrastructure,” Chi-man Kwan, group CEO of Raffles Family
Office, said. “These improvements are expected to turn interest
into action, particularly for those planning to establish family
offices in Hong Kong.”
“We consider the enhancements to the New Capital Investment
Entrant Scheme (CIES) as a major upgrade to attract a broader
range of international capital and asset owners to Hong Kong,”
Chi-man Kwan said.
“Furthermore, we welcome the government’s announcement to consult
the industry on its proposal to add qualifying transactions
eligible for tax concessions for funds and single-family offices.
Tax implications are one of the key considerations for family
offices when choosing their location of domicile,” Chi-man Kwan
said.
The details
Christopher Hui, Secretary for Financial Services and the
Treasury in Hong Kong, elaborated on the changes in discussions
with lawmakers.
Specific measures include: promoting private equity funds to
develop new sales channels through the Hong Kong Stock Exchange
(Hong Kong Exchanges and Clearing Limited); striving to cooperate
with large sovereign funds in the Middle East and other regions
to jointly fund the establishment of funds to invest in assets in
the mainland and other regions; optimize the new Capital Investor
Entry Scheme and expand the scope of eligible investments,” Hui
said.
“Starting from 1 March next year, investments made through
qualifying private companies wholly owned by the applicant can be
included in the qualifying investment amount. We will also expand
the types of eligible transactions for funds and single-family
offices to enjoy tax concessions,” he said.
The minister said that Hong Kong intends to strengthen the
city’s status as an international risk management centre and an
international asset and wealth management centre. For example,
next year, the Insurance Regulatory Authority will conduct a
review that includes studying how to enrich the asset allocation
of insurance companies through capital requirements for
infrastructure investment to help diversify risks and drive
infrastructure investment in Beidu [Chinese city] and other
areas.
Hui said the city will also upgrade the fixed income market
infrastructure and establish a central clearing system for
RMB-denominated repurchase transactions to make government bonds
issued in Hong Kong more popular collateral.
Relating to the cross-border “Wealth Management Connect” system
which connected Hong Kong, the mainland and Macao more than
three years ago, Hui said Hong Kong will increase offshore
renminbi liquidity, make “good use” of the currency swap
agreement with the mainland, enhance the service capabilities of
the real-time payment and clearing system, and explore more
diversified offshore RMB financing channels.
Hui explained what Hong Kong is doing regarding the gold trading
sector and commodities more broadly.
“We pay more attention to the commodity trading ecosystem,
because commodities actually account for half, or even more than
half, of the goods carried by shipping. If we want to develop a
shipping centre, the commodity trading ecosystem is
ground-breaking and can be said to be a game changer,” he said.
“However, we are still very far away and we are very pragmatic in
telling you [lawmakers] that it will take time to establish
because there are so many commodities.”
