Global Daily Tax News, Hong Kong FS Discusses Efforts To Attract Family Offices, (Aug 14, 2025)

The Hong Kong Government has indicated that it is unlikely to extend tax breaks for single-family offices to multi-family offices.

The Government announced in the 2025-26 Budget proposals to further enhance the preferential tax regime for single FOs, including by increasing the types of qualifying transactions eligible for tax concessions for single FOs, such as transactions in emission derivatives/allowances, insurance-linked securities, loans and private credit investments, and digital assets, to attract more FOs to establish a presence in Hong Kong.

Recently discussing efforts to promote single FOs, Hong Kong's Secretary for Financial Services and the Treasury, Christopher Hui, announced: "The Government has completed the industry consultation on the enhancement measures on the preferential tax regimes, and is formulating the relevant enhancement measures in consultation with financial regulators based on the feedback received. The Government targets to work out the details by this year and submit the legislative proposals to the Legislative Council for consideration in 2026. If approved, the relevant measures will take effect from the year of assessment 2025/26."

The latest proposals follow the enactment in 2023 of the Inland Revenue (Amendment) (Tax Concessions for Family-owned Investment Holding Vehicles) Ordinance 2023, which provided for profits tax concessions for family-owned investment holding vehicles (FIHVs) managed by single family offices in Hong Kong.

Asked about whether Hong Kong plans to expand the scope of the tax reliefs to multi-family offices, Hui said:

"The current preferential tax regime for FOs does not cover FIHVs managed by multi-FOs as they are generally independent service providers which are not owned by the relevant families. Multi-FOs may engage in the provision of investment management services or other financial services for third parties, which are essentially no different from the business of banks, private banks and WAM companies. Furthermore, if FIHVs of different families are managed by multi-FOs, there may also be difficulties in ascertaining whether the minimum asset threshold and substantial activities requirement of the FIHVs concerned are met. We need to critically examine the actual effectiveness and related fiscal implications of further extending the tax incentives to multi-FOs."

"On the other hand, where an FIHV meets the definition of 'fund' under the IRO and the qualifying transactions are carried out or arranged in Hong Kong by a licensed corporation of the Securities and Futures Commission (including multi-FOs), currently the relevant transactions are already eligible for tax exemption under the unified tax regime for funds," Hui concluded.