The Government welcomed the passage of the Inland Revenue (Amendment) (Tax Concessions for Family-owned Investment Holding Vehicles) Bill 2022 (the Bill) by the Legislative Council today (May 10).
The Bill amends the Inland Revenue Ordinance (Cap. 112) to provide profits tax concessions for eligible family-owned investment holding vehicles (FIHVs) managed by single family offices (SFOs) in Hong Kong.
The Secretary for Financial Services and the Treasury, Mr Christopher Hui, said “We are committed to creating a conducive and competitive environment for the businesses of global family offices to thrive in Hong Kong. The Policy Statement on Developing Family Office Businesses in Hong Kong we issued in March sets out our stance and measures tailored to the holistic and unique needs of family offices and asset owners. As a key policy measure, the tax concession regime under the Bill will facilitate family offices to set up and operate in Hong Kong, create new business opportunities for the asset and wealth management sector, and generate demand for other related professional services. This would foster Hong Kong’s position as a premier family office hub and an international asset and wealth management centre.”
The Bill exempts a FIHV’s assessable profits earned from qualifying transactions and incidental transactions from payment of profits tax. To attain the policy objective of bringing investment management and related activities to Hong Kong, the FIHV shall be managed by an eligible SFO and fulfil the minimum asset threshold of $240 million and substantial activities requirement.
The Bill as passed will become effective upon gazettal on May 19. The tax concession will be applicable to any years of assessment commencing on or after April 1, 2022.