Family Offices Find A Home In HK

An operator of family offices said Hong Kong needs to bring in more high-tech enterprises to cater for people's investment needs.

In his maiden Policy Address, Chief Executive John Lee set the target of getting no fewer than 200 family offices – investment vehicles for the wealthy – to set up shop in Hong Kong or expand their business by the end of 2025.

According to market estimates, in the first half of this year, there were 15,000 people in Hong Kong with more than US$30 million in net assets each. The number of such individuals is the highest of all world cities, according to government papers submitted to the legislature.

A managing director of a family office in Hong Kong, Juen Lee, said there are many unique advantages in the SAR for these investment vehicles, including high transaction volumes in the local bourse.

"In the first quarter of 2022, the daily turnover for Singapore is US$890 million. It's US$16.5 billion in Hong Kong. Also, the total market value of listed companies in Hong Kong is eight times of that in Singapore," he told RTHK.

Wendell Chen, whose firm has set up two family offices in Hong Kong, said a "flexible" regulatory system and favourable tax policies are important factors for these investment vehicles.

"The second and third generations of these family offices, they set their sights on more investment opportunities on high-tech and innovation and technology projects," Chen added.

"For Hong Kong, there's a need to bring in these high-tech firms, projects and talents, and ultimately promote the development of the relevant eco-system."

The government plans to provide tax relief for eligible family offices, and the relevant bill is being scrutinised by the Legislative Council.

The financial services minister, Christopher Hui, said the government is working towards the target relating to home offices unveiled in the Policy Address.

"The threshold for tax relief for family offices is at HK$240 million worth of investments. Actually for Hong Kong, this may drive the demands for investment services," he told RTHK.

"Of course they don't need to put the entire amount of money in the SAR, part of that can be put elsewhere. But at least when they need to serve these investments, they need our relevant experts."