{"id":1081,"date":"2025-04-24T10:56:55","date_gmt":"2025-04-24T10:56:55","guid":{"rendered":"https:\/\/mielogroup.com\/?p=1081"},"modified":"2025-06-11T09:58:24","modified_gmt":"2025-06-11T09:58:24","slug":"tax-concessions-for-family-offices-in-hong-kong","status":"publish","type":"post","link":"https:\/\/mielogroup.com\/fr\/tax-concessions-for-family-offices-in-hong-kong\/","title":{"rendered":"Tax Concessions for Family Offices in Hong Kong"},"content":{"rendered":"
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As Hong Kong continues to cement its status as a leading international family office hub, the government has introduced a dedicated profits tax concession regime<\/strong> for qualifying family-owned investment vehicles. This forms part of a broader strategy to attract global family offices and ultra-high-net-worth individuals to base their operations and investments in the city.<\/p>

The legislative framework \u2014 gazetted in May 2023<\/strong> et effective retrospectively from 1 April 2022<\/strong> \u2014 offers a 0% profits tax rate<\/strong> for qualifying Family-owned Investment Holding Vehicles (FIHVs), provided certain criteria are met. Subsequent industry consultations in late 2024 and early 2025<\/strong> have proposed additional enhancements, which are currently under review and expected to further expand the scheme’s flexibility and appeal.<\/p>


Who Can Benefit?

<\/b><\/p>

The tax concessions apply to two types of <\/span>family-owned entities<\/b>:<\/span><\/p>

  1. Family-Owned Investment Holding Vehicles (FIHVs)<\/b> \u2013 Investment holding entities owned by families and <\/span>managed by an eligible Single Family Office (SFO)<\/b> \u00e0 Hong Kong.

    <\/span><\/span><\/li>
  2. Family-Owned Special Purpose Entities (FSPEs)<\/b> \u2013 Specialized vehicles set up for <\/span>specific investment purposes<\/b> within a family office structure.

    <\/span><\/li><\/ol>

    These profits tax exemptions came into effect for the 2022\/23 assessment year<\/strong>, starting on April 1, 2022<\/strong>, dans le cadre de la Inland Revenue (Amendment) (Tax Concessions for Family-owned Investment Holding Vehicles) Ordinance 2023<\/strong>, gazetted in May 2023<\/strong>.<\/p>

    \ud83d\udd04 Proposed Enhancements (2024\u20132025)<\/strong>: The government is currently reviewing proposals to allow broader use of asset classes (including virtual assets and private credit) and more flexible structures for FIHVs and FSPEs.<\/i><\/p>

    \u00a0<\/i><\/p><\/blockquote>

    Eligible Profits: What Qualifies for Tax Concessions?

    <\/b><\/p>

    The tax benefits apply only to <\/span>assessable profits<\/b> derived from two types of transactions:<\/span><\/p>

    1. Qualifying Transactions<\/b> \u2013 Investments that meet specific criteria set by the Hong Kong government.

      <\/span><\/span><\/li>
    2. Incidental Transactions<\/b> \u2013 Transactions closely related to or arising from qualifying investment activities,\u00a0<\/span>such as interest or dividend income.<\/li><\/ol>

      \ud83d\udd04 Crypto Update:<\/strong> As of 2025, virtual assets (e.g., cryptocurrencies)<\/strong> are not yet included<\/strong> in the current definition of \u201cqualifying transactions.\u201d However, the government has proposed<\/strong> adding them under ongoing legislative enhancements. If enacted, profits from eligible crypto investments made by FIHVs will qualify for the 0% profits tax concession.<\/em><\/p><\/blockquote>

      This structure ensures that only <\/span>genuine investment-related profits<\/b> benefit from the tax concession, rather than general commercial income.<\/span><\/p>

      \ud83d\udd04 What\u2019s Changing?<\/strong> The government has proposed removing the 5% cap<\/strong> on incidental income (previously capped at 5% of total income) to better accommodate passive income from investment portfolios.

      <\/i><\/p><\/blockquote>

      Key Conditions for FIHV Eligibility
      <\/b><\/p>

      Pour un <\/span>Family-Owned Investment Holding Vehicle (FIHV)<\/b> to qualify for the profits tax concession, it must meet the following conditions:

      <\/span><\/p>

      1. Legal Structure

        <\/b><\/li><\/ol>
        • The FIHV <\/span>can be incorporated in or outside Hong Kong<\/b>.

          <\/span><\/li>
        • It <\/span>cannot<\/b> engage in general <\/span>commercial or industrial activities<\/b>\u2014it must function purely as an <\/span>investment holding entity<\/b>.

          <\/span>\u2714\ufe0f As of 2023, structures involving charitable trusts<\/strong> are permitted to hold up to 25%<\/strong> of an FIHV\u2019s beneficial interest.<\/em>

          <\/blockquote><\/li><\/ul>
          1. Ownership Requirements

            <\/b><\/li><\/ol>
            • The FIHV must be <\/span>owned by one or more members of a single family<\/b>.

              <\/span><\/li>
            • At least <\/span>95% of the beneficial interest<\/b> in the FIHV must be <\/span>held (directly or indirectly) by family members<\/b> for the entire tax assessment year.
              <\/span><\/li><\/ul>

              \u2714\ufe0f Inland Revenue now has discretion to treat more complex family structures<\/strong> as compliant, provided they meet the economic intent of the rules.<\/em>

              <\/p><\/blockquote>

              1. Management and Operations in Hong Kong

                <\/b><\/li><\/ol>
                • The FIHV must be <\/span>managed and controlled in Hong Kong<\/b> during the tax year.

                  <\/span><\/li>
                • Key decision-making processes and investment activities<\/b> should occur in Hong Kong.<\/span><\/li><\/ul>
                  \u00a0<\/div>

                  At a minimum, the FIHV must have:<\/span><\/p>

                  • At least two full-time employees<\/b> based in Hong Kong, qualified to perform investment-related activities.

                    <\/span><\/li>
                  • A minimum of HK$2 million in annual operating expenses<\/b> incurred in Hong Kong.

                    <\/span><\/li><\/ul>

                    These requirements ensure that <\/span>substantial economic activities<\/b> related to the family office occur within Hong Kong.
                    <\/span><\/p>

                    \ud83d\udd04 Update<\/strong>: The requirement now refers to entities \u201cnormally managed or controlled\u201d<\/strong> in Hong Kong, a more flexible standard introduced in 2023 to replace stricter \u201ccentral management and control\u201d language.

                    <\/em><\/p><\/blockquote>

                    1. Management by an Eligible SFO

                      <\/b><\/li><\/ol>

                      The FIHV must be managed by a <\/span>qualified Single Family Office (SFO)<\/b> that meets the following conditions:<\/span><\/p>

                      • The SFO must be a <\/span>private company<\/b> incorporated <\/span>in or outside Hong Kong<\/b>, with <\/span>normal management and control<\/b> based in Hong Kong.

                        <\/span><\/li>
                      • At least <\/span>95% of its beneficial interest must be held by family members<\/b> (or 25% if the entity involves a charitable organization).

                        <\/span><\/li>
                      • The SFO must <\/span>provide investment management and administrative services<\/b> exclusively to specified family members.

                        <\/span><\/li>
                      • At least 75% of the SFO\u2019s assessable profits<\/b> must come from providing <\/span>services to family members<\/b>.<\/span><\/li><\/ul>


                        <\/div>

                        Permitted Activities of an SFO Managing an FIHV

                        <\/b><\/p>

                        An eligible SFO managing an FIHV must oversee <\/span>investment-related activities<\/b>, y compris :<\/span><\/p>

                        • Conducting <\/span>investment research and advisory services<\/b> for the FIHV.

                          <\/span><\/li>
                        • Acquiring, holding, managing, or disposing of <\/span>investment assets<\/b>.

                          <\/span><\/li>
                        • Establishing and administering <\/span>Family-Owned Special Purpose Entities (FSPEs)<\/b> for managing investments.

                          <\/span><\/li><\/ul>

                          \u2714\ufe0f These activities must remain within the scope of unregulated or licensed activities<\/strong>, as the Commission des valeurs mobili\u00e8res et des contrats \u00e0 terme (SFC)<\/strong> licensing rules still apply.<\/em><\/p><\/blockquote>

                          \u00a0<\/div>

                          Cap on the Number of FIHVs per SFO

                          <\/b><\/p>

                          Each eligible <\/span>SFO can manage a maximum of 50 FIHVs<\/b> under the tax concession scheme.

                          <\/span><\/p>

                          1. Minimum Asset Requirement

                            <\/b><\/li><\/ol>

                            To qualify for the tax concession, the <\/span>total asset value<\/b> managed by an SFO for its FIHV(s) must be at least <\/span>HK$240 million<\/b>. These assets must fall under the \u201cspecified assets\u201d category as defined in Schedule 16C of the Inland Revenue Ordinance (IRO). As of 2025, this includes traditional assets like stocks and bonds, but not yet virtual assets<\/strong>. However, the government has proposed expanding the definition to include digital assets such as cryptocurrencies<\/strong>, alongside private credit, carbon credits, and overseas real estate. These proposals are pending final legislative approval.<\/span>
                            <\/span><\/p>

                            \ud83d\udd04 Pending Enhancements<\/strong>: The government has proposed expanding this list to include virtual assets<\/strong>, private credit<\/strong>, insurance-linked securities<\/strong>, overseas property<\/strong>, et carbon credits<\/strong> \u2014 aligning with global family office investment trends.

                            <\/em><\/p><\/blockquote>

                            Key Takeaways

                            <\/b><\/p>

                            • Les offres de Hong Kong tax concessions<\/strong> for family offices, reducing profits tax for FIHVs and FSPEs to 0%<\/strong> on qualifying investment income.<\/p><\/li>

                            • The FIHV must be family-owned<\/strong>, operate as a pure investment vehicle<\/strong>, and be managed by a qualified SFO<\/strong> \u00e0 Hong Kong.<\/p><\/li>

                            • Minimum requirements include:<\/p>

                              • Two full-time employees in Hong Kong,<\/p><\/li>

                              • HK$2 million in local expenses,<\/p><\/li>

                              • HK$240 million in assets under management.<\/p><\/li><\/ul><\/li>

                              • A cap of 50 FIHVs per SFO<\/strong> applies.<\/p><\/li>

                              • Proposed enhancements will expand asset classes<\/strong>, remove incidental income caps, and improve structural flexibility.

                                <\/p><\/li><\/ul>

                                Conclusion

                                <\/b><\/p>

                                The profits tax concession for family offices strengthens Hong Kong\u2019s position as a leading global wealth management hub<\/strong>. With ongoing enhancements that reflect investor demand \u2014 including the potential to recognize digital assets, sustainable finance instruments, and cross-border real estate \u2014 Hong Kong is evolving rapidly to serve the needs of modern family offices.<\/p>

                                For those considering setting up a family office in Hong Kong, ensuring compliance with these conditions is crucial to maximizing tax benefits. Consulting with a professional advisor<\/strong> is strongly recommended to navigate the regulatory landscape and take full advantage of Hong Kong\u2019s family office tax incentives.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t

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                                \n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>","protected":false},"excerpt":{"rendered":"

                                As Hong Kong continues to cement its status as a leading international family office hub, the government has introduced a dedicated profits tax concession regime for qualifying family-owned investment vehicles. This forms part of a broader strategy to attract global family offices and ultra-high-net-worth individuals to base their operations and investments in the city. The […]<\/p>\n","protected":false},"author":1,"featured_media":1083,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1081","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-family-office-business-guide"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/mielogroup.com\/fr\/wp-json\/wp\/v2\/posts\/1081","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mielogroup.com\/fr\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mielogroup.com\/fr\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mielogroup.com\/fr\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mielogroup.com\/fr\/wp-json\/wp\/v2\/comments?post=1081"}],"version-history":[{"count":13,"href":"https:\/\/mielogroup.com\/fr\/wp-json\/wp\/v2\/posts\/1081\/revisions"}],"predecessor-version":[{"id":2973,"href":"https:\/\/mielogroup.com\/fr\/wp-json\/wp\/v2\/posts\/1081\/revisions\/2973"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mielogroup.com\/fr\/wp-json\/wp\/v2\/media\/1083"}],"wp:attachment":[{"href":"https:\/\/mielogroup.com\/fr\/wp-json\/wp\/v2\/media?parent=1081"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mielogroup.com\/fr\/wp-json\/wp\/v2\/categories?post=1081"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mielogroup.com\/fr\/wp-json\/wp\/v2\/tags?post=1081"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}