Hong Kong

The profits tax for corporations is 8.25% for the first HK$2 million of profits and 16.5% for profits above that amount. For unincorporated businesses like partnerships and sole proprietorships, the tax rates are 7.5% and 15%, respectively. The salaries tax rate is 15%, and the property tax rate is also 15%.

Hong Kong does not impose sales tax or VAT, withholding tax, capital gains tax, tax on dividends, and estate tax. Moreover, its free port status and easy customs procedures make it easier for businesses and companies to operate.

Hong Kong introduced tax regulations and incentives to encourage investment management and related activities within the city, particularly for Family-owned Investment Holding Vehicles (FIHVs) managed by Single Family Offices (SFOs). The aim is to establish Hong Kong as a leading hub for family offices globally.

To qualify for these incentives, a FIHV must be managed by an eligible SFO and have a minimum asset threshold of HKD240 million, along with a substantial activities requirement. The SFO must also have a certain number of qualified full-time employees in Hong Kong and a minimum total operating expenditure of HK$2 million for carrying out investment activities.

The tax concession applies to any years of assessment commencing on or after 1 April 2022, and no prior regulatory approval is needed for the application of profits tax concessions. However, a FIHV can elect for these concessions and apply for an advance ruling on eligibility.

A Private Trust Company (PTC) can be established to serve as a trustee for a family’s assets. This arrangement enables the family to maintain control over the management of the trust while also obtaining advantages such as asset protection and estate planning.

A Family-Owned Limited Partnership (FOLP) is a type of limited partnership created to manage the family’s wealth. It provides operational flexibility, and its structure can be tailored to meet the interests of various family members.

An FOIE is a company incorporated in Hong Kong specifically for managing the family’s wealth. It provides limited liability protection and can be structured to facilitate the transfer of wealth to future generations.

Setting up a Hong Kong limited company is a common choice for family offices. It offers limited liability protection, a simple and efficient corporate structure, and access to Hong Kong’s extensive network of tax treaties.

A trust established in Hong Kong can be a useful tool for wealth preservation and succession planning. It allows the settlor to transfer assets to the trust for the benefit of beneficiaries while retaining some level of control over the assets.

A foundation can be established in Hong Kong for charitable, philanthropic, or wealth management purposes. It provides a flexible and efficient way to manage family wealth and can be used for succession planning.

Hong Kong is a leading international financial centre with a highly developed financial infrastructure. The city has nearly 80 of the world’s 100 largest banks and 70 of the top 100 global money managers, respectively. These global entities can help family offices with the complexities of investing in China and optimise their investment strategies.

Hong Kong’s location is strategic because it provides a gateway to access the massive Chinese market. Its proximity to the mainland’s booming economy offers various investment opportunities and business prospects. Family offices can take advantage of the many Chinese products available in Hong Kong, including stocks, bonds, real estate, and private equity. Moreover, they can invest in Chinese firms listed on the Hong Kong Stock Exchange (HKEX) or participate in diverse investment schemes that connect Hong Kong with mainland China, such as the Stock Connect and Bond Connect programs.

Hong Kong has a well-established legal system based on English common law, providing certainty and transparency in legal matters. The regulatory environment is business-friendly, with clear rules and regulations that are favourable for wealth management. The city’s strong rule of law, coupled with its reputation as a global financial centre and its strategic location in Asia, make it a compelling choice for family offices seeking to manage and grow their wealth.

Newcomers to Hong Kong will find that language is rarely an issue, with most locals being either bilingual or trilingual. Many business professionals can speak English and Cantonese (Hong Kong’s most widely spoken language), and a lot of people may also speak Mandarin (Mainland China’s official language).

Hong Kong is home to 22 degree-awarding higher education institutions. Currently four Hong Kong universities are featured in the Quacquarelli Symonds (QS) World University Rankings top 100 list, demonstrating the high quality of our education system.

With liberal immigration policies, a vibrant cosmopolitan lifestyle and abundant opportunities for career advancement, Hong Kong offers attractive prospects for professionals and experts from around the world. Various talent admission schemes are in place to attract talent and drive Hong Kong’s development as a high-value-added and diversified economy.

The variety of food on offer in Hong Kong is one of the best in the world. With thousands of options, from street-side food stalls to Michelin-star restaurants, there’s something for everyone in Hong Kong. Options are not only plentiful but also diverse, with a wide array of cuisines available for Hong Kong’s international community.

You wouldn’t know it by looking at the towering skyscrapers and bright lights of Hong Kong, but the city is home to beautiful beaches and endless hiking trails. One only has to make a short journey away from the city to discover a completely different side of Hong Kong filled with nature and wildlife. Although Hong Kong is one of the world’s largest metropolises, three-quarters of the 1,108 square kilometres of land is in the countryside.

Those with children will be happy to know that Hong Kong has over 50 international schools offering different international curricula. From kindergarten all the way to university, an international level of education is available to those seeking to maintain the educational consistency of their home country.