Introduction

For over a century, Hong Kong has established itself as a premier hub for family wealth management in Asia, attracting affluent families and investors from around the globe. This dynamic metropolis, strategically located at the heart of Asia, boasts an extensive array of investment opportunities, exceptional financial frameworks, and top-tier professional services. The unique 'One Country, Two Systems' policy permits Hong Kong to maintain considerable autonomy, bolstering its economic resilience and legal infrastructure.

The Surge of Family Offices

Recent estimates from Deloitte indicate that Hong Kong is home to over 2,700 single-family offices (SFOs), emphasizing the region's allure as a go-to destination for wealth management. Setting up a family office in this bustling city is remarkably easy, akin to establishing any standard company—there's no requirement for government licensing, which greatly streamlines the process.

Government Initiatives and Incentives

In its quest to solidify its status as a global financial leader, Hong Kong has rolled out enticing incentives aimed at family offices. These initiatives include tax breaks and the innovative Capital Investment Entrant Scheme (CIES), designed to facilitate investor entry into Hong Kong. Such measures signal Hong Kong’s commitment to nurturing a rich ecosystem for global family offices and asset holders.

Robust Asset Management Industry

Pivotal to its success, Hong Kong's asset and wealth management industry is valued at a whopping US $3.9 trillion. This thriving sector is powered by ultra-high-net-worth (UHNW) individuals and their adept advisers, who are keenly aware of the distinct investment advantages presented by the city. The strategic geographic position allows Hong Kong to serve as an essential link between Europe and China, fostering economic exchanges that have grown stronger over time. European nations are increasingly channeling investments into China, seeking to fortify their business interests against the backdrop of Hong Kong's robust legal and economic framework.

Favorable Tax Regime

Furthermore, Hong Kong's tax regime is exceptionally favorable, featuring no sales tax, capital gains tax, or tax on dividends—creating an attractive environment for investors. The city has emerged as a pivotal player in the equities market, leading the global landscape for Asian bond issuances and first-time offerings in 2022. Additionally, it serves as the largest cross-border private wealth management center in Asia, adeptly facilitating access to both global capital markets for Chinese investors and domestic opportunities for foreign investors.

Comparative Advantage to Regional Rivals

When comparing Hong Kong to regional rivals like Singapore, the city stands out due to its superior data privacy laws, which are safeguarded by the Personal Data (Privacy) Ordinance (PDPO)—one of the most comprehensive data protection regulations in Asia. Unlike Singapore's centralized framework, Hong Kong prides itself on maintaining the integrity of its financial system.

Strategic Family Office Policy Statement

Continuing to bolster its reputation, the Hong Kong government rolled out a strategic family office policy statement in March 2023, positioning the city to compete on a global scale. This includes a profits tax exemption scheme for family-owned investment holdings managed by SFOs, alongside CIES, which grants residency to those investing HKD 30 million or more.

Supporting Wealth Legacy

To support the next generation of wealth, the establishment of the Hong Kong Academy for Wealth Legacy aims to facilitate networking and knowledge-sharing among wealth owners and create a flourishing ecosystem for family offices. The city also plans to introduce facilities for art storage and appreciation at its international airport, enhancing its vibrant art scene for global family offices focused on art investments.

Social Responsibility and Community Impact

Furthermore, social responsibility reigns supreme in Hong Kong, with the launch of the initiative iLink, designed to connect family offices with community-impacting charitable projects in areas such as healthcare, education, and poverty alleviation.

Conclusion

As Hong Kong continues to evolve and attract wealth, its reputation as the jewel of South China is only set to shine brighter, making it an unrivaled hotspot for family offices. With its comprehensive offerings and favorable conditions, the city remains a beacon of opportunity for the affluent and their families.