China News Service, March 28 (Mazhuang) On March 27, a major financial event in Hong Kong brought together internationally renowned speakers related to family offices from around the world. Hui Ching-yu, Secretary for Financial Services and the Treasury of the Hong Kong SAR Government, said at the second "Yu Ze Xiangjiang" Summit Forum that Hong Kong is "rolling out the red carpet" to invite family offices from all over the world to settle here.
The picture shows the Victoria Harbor area in Hong Kong (data map). Photo by China News Service reporter Li Zhihua
What is a family office?
Family offices are private wealth management advisory firms that specialize in serving families of ultra-high net worth clients. The scope of services is not only investment, but also covers finance, law, accounting, taxation, charity, etc. Family offices are divided into single family offices and multi-family offices.
In recent years, family offices around the world have developed vigorously. Hong Kong is one of the world's leading international financial centers. The Hong Kong SAR government urges more family offices to settle in the country and introduces tax exemptions and other convenient measures.
Deloitte's "Hong Kong Family Office Market Research" shows that as of the end of 2023, there are 2,703 single family offices in Hong Kong. There are 535 single-family offices with wealth ranging from US$10 million to US$30 million; 601 with wealth ranging from US$30 million to US$50 million; 682 with wealth ranging from US$50 million to US$100 million; and 885 with wealth exceeding US$100 million. The report illustrates the booming growth of Hong Kong’s family office industry and its solid position as the preferred hub for global family offices and wealth owners, and one of Asia’s leading asset and wealth management centres.
Why is Hong Kong an ideal location for family offices?
After more than a century of development, Hong Kong's family wealth management history has become one of the largest cross-border wealth management centers in Asia.
The picture shows a data map of office buildings in the Central area of Hong Kong. Photo by China News Service reporter Li Zhihua
In order to further consolidate its historical advantage in the field of family offices, the Hong Kong SAR government provides strong policy support for the entry of family offices, and insists on promoting Hong Kong overseas and telling Hong Kong stories well. In the latest budget announced by the Hong Kong SAR government, a number of measures have been introduced to strengthen Hong Kong’s status as an asset and wealth management center.
In 2023, the "Policy Declaration on the Development of Family Office Business in Hong Kong" announced by the Hong Kong SAR Government contains eight measures, namely the new "Capital Investor Entry Scheme", providing tax concessions, providing market facilitation measures, establishing Hong Kong Wealth Heritage Institute, promoting art storage facilities at the airport, developing Hong Kong into a philanthropic center, Invest Hong Kong’s FamilyOfficeHK dedicated team and a new network of family office service providers.
Li Wenluo, director of the Hong Kong Securities and Futures Association, said that with the support of a series of policies, it is expected that many family offices that chose to settle in Singapore due to epidemic restrictions will return to Hong Kong, and the future development will be full of opportunities.
Bloomberg Intelligence pointed out that Hong Kong’s tax incentives are very attractive for ultra-high-net-worth individuals to set up single-family offices in Hong Kong. In contrast, Singapore has stricter requirements on the local operating expenses and the number of professional investment personnel required for larger family offices to enjoy tax benefits.
The picture shows a large number of tourists taking photos in front of the Bruce Lee statue on the Avenue of Stars in Tsim Sha Tsui. Photo by China News Service reporter Li Zhihua
Favorable measures have allowed more family offices to settle in Hong Kong, and Hong Kong’s business environment advantages have only increased. In the "2023 World Competitiveness Annual Report" released by the International Institute of Management Development, Hong Kong ranks seventh in the world. In terms of sub-factors, Hong Kong continues to rank first in business regulations, and ranks among the top five in the world in tax policy, international investment, international trade and technology infrastructure. This ranking undoubtedly confirms that Hong Kong is one of the most competitive economies in the world.
Hong Kong is the largest international asset management center in Asia, the largest cross-border private wealth management center and hedge fund center in Asia, and the second largest private equity fund center in Asia. As the world's largest offshore RMB business hub, Hong Kong's offshore RMB liquidity pool has also further expanded.
As a member of the Guangdong-Hong Kong-Macao Greater Bay Area, Hong Kong brings huge development opportunities to the integration of eastern and western markets. Under "one country, two systems", Hong Kong has the unique advantage of being backed by the motherland and connected to the world. It can not only participate in the mainland's huge market, but also integrate with the world and become a bridge connecting the mainland and the world. Key national strategies such as the country’s “14th Five-Year Plan”, the construction of the Greater Bay Area and the “One Belt, One Road” initiative have brought unlimited opportunities to Hong Kong.
With good policies and good opportunities, in the future, more family offices in Hong Kong will take root and seek development here.