Hong Kong Family Office Tax Incentives

In recent years, Singapore has successfully attracted a significant influx of talent and capital from China and around the world by offering residency and tax incentives for family offices (commonly referred to as "FOs," or Family Offices in English). To catch up with Singapore, Hong Kong finally implemented its family office tax incentive legislation on May 19, 2023, after much anticipation. This legislation, titled the Inland Revenue (Amendment) (Tax Concessions for Family-owned Investment Holding Vehicles) Ordinance 2023 (hereinafter referred to as the "Family Office Tax Ordinance"), came into effect for tax years beginning on or after April 1, 2022.

The most attractive aspect of this tax incentive is as follows: "Qualifying transactions involving specified assets and incidental transactions related to qualifying transactions, conducted through a qualified family-owned investment holding vehicle or a family-owned special purpose entity managed by an eligible single-family office in Hong Kong," are eligible for a 0% tax rate.

However, most people may find the language of this tax incentive difficult to understand. In this article, we will break down the details of the above provision to help you understand how to enjoy Hong Kong’s tax exemptions for family offices.