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Hong Kong and Dubai Cross-border Market Development Summit 2025
On 16 April, the “Hong Kong and Dubai Cross-border Market Development Summit 2025” was successfully held at The St. Regis Shenzhen. Organised by the Hong Kong Fiduciary Association Limited, the event featured representatives from Invest Hong Kong, a department of the Government of the Hong Kong Special Administrative Region, and the Dubai International Financial Centre Authority. Invest Hong Kong is a government department responsible for promoting foreign direct investment, committed to strengthening Hong Kong’s position as an international business hub in Asia and attracting enterprises from overseas and Mainland China to set up or expand in Hong Kong. The Dubai International Financial Centre Authority is the UAE’s first financial centre and the largest, most established financial and innovation ecosystem in the Middle East, Africa, and South Asia. The forum was strongly supported by partners such as Hong Kong Trust Capital Management Limited, Hong Kong Enterprise Association Limited, and Inheritance Asset Management Limited. Over 200 industry professionals from Hong Kong, Shenzhen, Dubai, and other regions gathered to discuss frontier issues in cross-border enterprise development and to promote regional financial cooperation and innovation. The summit comprised guest presentations and interactive sessions. Prior to the formal sessions, the organiser, Hong Kong Fiduciary Association Limited, hosted a token appreciation ceremony. Mr. Lawrence Chan, Operations Director of the Association, presented customised commemorative gifts to Mr. King Leung, Global Head of Financial Services, FinTech and Sustainability at Invest Hong Kong, Ms. Xiaoxi Guo, China Representative of the Dubai International Financial Centre Authority, and Mr. Melvin Mui, Chief Operating Officer of Hong Kong Trust Capital Management Limited, to express sincere gratitude. Following the ceremony, Mr. King Leung, Ms. Xiaoxi Guo, and Mr. Melvin Mui delivered detailed and insightful presentations. Mr. King Leung opened with a keynote on “Hong Kong: A Global Financial Centre”, highlighting Hong Kong’s policy advantages and mature market environment. He explained how Invest Hong Kong supports enterprises and investors through Hong Kong’s international financial platform. Mr. Leung elaborated on Hong Kong’s core competitiveness from the perspectives of policy, market trends, cross-border cooperation, corporate finance, and tax advantages. His sharing provided forward-looking guidance for cross-border cooperation and wealth management strategies, which received high praise from the audience. Ms. Xiaoxi Guo followed with a keynote titled “Leading the Future of Finance”. She explored the Dubai International Financial Centre’s strengths in business environment, legal framework, and innovation ecosystem, and discussed how these factors drive the sustainable development of enterprises in regional and global markets. Ms. Guo also detailed Dubai’s strategic positioning as a financial hub, supported by concrete examples. She highlighted Dubai’s advantages in attracting international capital, fostering financial innovation, and supporting cross-border cooperation, particularly in setting up offshore structures. Mr. Melvin Mui concluded the session with a presentation on “Hong Kong Trust as Your Best Partner for Overseas Expansion”, underscoring the role of Hong Kong trusts in asset protection, tax optimisation, and cross-border investment. Mr. Mui explained how an efficient trust structure can facilitate entry into markets like Dubai, offering innovative and practical solutions for international expansion. He also shared real-world examples to demonstrate the flexibility and foresight of Hong Kong trusts in cross-border wealth management and investment strategies, inspiring participants on sustainable international growth. During breaks, speakers engaged in live Q&A sessions with the audience. Selected highlights: Q: In the current international environment, how can Invest Hong Kong strengthen Hong Kong’s role as a “super-connector”? A: Mr. King Leung emphasised that Hong Kong’s policy advantages, mature market, and global financial hub status position it as an ideal gateway between Mainland China and the international market. He added that Hong Kong will continue to empower policies, build market bridges, promote cross-border cooperation, and optimise services to maintain and strengthen this role. Q: What role will the Dubai International Financial Centre Authority play in cross-border market development, especially regarding Dubai and the Middle East? A: Ms. Xiaoxi Guo stated that DIFC serves as a bridge between East and West markets and provides a stable, transparent business environment with benefits such as zero taxes and 100% foreign ownership. She highlighted DIFC’s ability to offer an “onshore offshore” solution that supports sustained cross-border business growth. Q: What are the unique advantages of cross-border asset allocation through Hong Kong trusts compared to traditional offshore investment methods? A: Mr. Melvin Mui explained that Hong Kong trust structures offer greater flexibility and efficiency, particularly in asset protection and tax optimisation. The mature financial market and robust regulatory framework in Hong Kong provide transparent and effective channels for cross-border investment and orderly wealth inheritance. After the summit, a tea break was arranged, providing guests with a relaxed atmosphere to network, exchange insights, and foster future cooperation. The “Hong Kong and Dubai Cross-border Market Development Summit 2025” is designed to serve as a high-end international platform for the financial and business communities of both jurisdictions, aiming to promote cross-border cooperation and explore new opportunities. The forum also focuses on supporting Chinese enterprises in their global expansion, leveraging policy backing and the safe investment environments offered by Hong Kong and Dubai. Looking ahead, the Hong Kong Fiduciary Association Limited will continue to work with professional partners to expand and deepen exchanges between Hong Kong and Dubai, supporting the internationalisation of Mainland enterprises and contributing to the high-quality development of both regions in the global financial market.
4th Hong Kong Trust Global Financial Forum Held in Jining
On 22 March 2025, the 4th session of the Hong Kong Trust Global Finance Forum Series was successfully held at Wanda Realm Jining, Shandong Province. Sponsored by Hong Kong Fiduciary Association Limited (HKFA), this event was co-organised by a number of professional institutions, including Hong Kong Trust Capital Management Limited, Dacheng Law Offices, Beijing Changzhou Private Equity Fund Management Co., Ltd., Hong Kong Enterprise Association Limited, Inheritance Asset Management Limited, etc. More than 100 professionals from the financial, tax and corporate sectors in Shandong and the rest of China gathered together. Focusing on the impact of “New Nine Guidelines” issued by China’s State Council on mainland enterprises’ IPO and international expansion, it combined with the latest points of the Two Sessions (the yearly plenary meetings of the National People’s Congress and the Chinese People’s Political Consultative Conference). Moreover, it delved into cutting-edge trends in overseas IPO, key considerations for establishing overseas structures, and strategies for compliance and security, providing a wider range of valuable creative ideas and practical solutions. This event can be divided into two major sessions: guest sharing and interactive exchange. After the guest sharing, Mr. Ray Zhan, senior partner of Beijing Dacheng (Shanghai) Law Offices, took the lead on the stage. With many years of extensive experience, he specialises in IPO and listing, investment, financing, merger & acquisition, as well as family wealth management legal services. During this event, Lawyer Ray Zhan focused on the important topic of enterprise overseas listing, delving into key considerations such as planning and implementation of enterprise overseas listing, filing and regulation for overseas listings, interpretation of filing-related regulations on overseas listings, and the SEC’s audit regulation. In the sharing session, Lawyer Ray Zhan not only presented the latest developments and overall situation in overseas financing for the guests. Additionally, with professional and targeted analysis, he offered enterprises going overseas with a clearer and more practical guide, navigating them into overseas listings to ensure regulatory compliance requirements. The following session was made by Mr. Melvin Mui, COO of Hong Kong Trust Capital Management Limited (HKTCM). With his profound attainments and professional knowledge in the field of finance, he delved into the key role of Trust structure in the listing process of enterprises. Moreover, Mr. Mui elaborated on how the Trust structure can fully utilise its multiple values in assisting enterprises seeking overseas lists, encompassing how to optimise equity allocation through the use of Trust structure, so as to ensure the effective protection of shareholders’ rights and interests. Meanwhile, he noted that the Trust structure plays a decisive role in promoting the stable wealth accumulation and achieving orderly inheritance of family wealth. Mr. Mui noted that Family Trust, as a powerful tool for wealth management, can be particularly well suited for high-net-worth individuals (HNWIs), which plays an effective role in wealth planning and security protection. Prior to IPO, one of the most important functions of Family Trust is its segregation of Trust assets in the establishment of Offshore Trust structure. Through a Trust structure, business owners can separate their personal assets from business assets, so as to shield personal wealth from business risks. His insights were both practical and thought-provoking, which aroused much echo among guests. The event entered the FAQ session after the keynote speeches. The two speakers returned to the stage and answered questions for the guests. The two speakers responded to a series of key considerations raised by the guests, such as “costs and fees for enterprises seeking overseas listings”, “selection of channels and modes of capital operation after successful overseas listings”, and “advantages of setting up a Family Trust before listing”. With many years of professional and practical experience in the industry, they shared in-depth and professional insights to key issues of concern, in alignment with the latest regulatory requirements and various complexities in the actual operation process. Moreover, their unique and creative perspectives were apt and to the point, keeping up with the latest industry trends and developments, which aroused much echo and positive feedback among guests. Hong Kong Trust Global Financial Forum Series provides a professional exchange platform for the industry organised specifically by HKFA, aiming to expand in-depth exchanges and collaboration between the Chinese Mainland enterprises going international and overseas listing service providers. Leveraging this platform, guests can share their cutting-edge perspectives and practical experience with each other, while jointly discussing the cutting-edge information on overseas listing and wealth protection, so as to offer robust assistance for expanding enterprises into international markets. Through a series of events, HKFA attaches great importance to strengthening connection and collaboration between the Chinese Mainland and international financial markets such as Hong Kong and the United States, while offering valuable professional services and practical guidance for the Chinese Mainland enterprises going international. Looking ahead, HKFA will continue to work together with its professional partners to promote in-depth exchanges and collaboration, so as to assist them in expanding international reach.
Three Key Steps to Setting Up a Family Wealth Management System!
A comprehensive family wealth management system consists of at least three components: the core of the system, the system support and the system guarantee. Accordingly, its completeness relies on three core parts: goal management, wealth management tool, and family governance mechanism. At first, the family wealth goal plays a core role in the management system, encompassing the four major wealth goals: safeguarding wealth, growing wealth, fostering harmonious wealth, and preserving enduring wealth, which are interlinked and interacted, placing the core and leading role in family wealth management, of which security is the foundation. Security serves as the foundation, upon which wealth growth is pursued. Likewise, harmony is achieved on the basis of both security and growth. By doing so, long-term prosperity can be achieved. Secondly, wealth management tools serve as the backbone for achieving family wealth goals, necessitating the integrated use of various tools such as investment banking, financial planning, gifting, testamentary, and family trust. Besides, with distinctive advantages, these tools should be selected and combined based on the specific conditions of families, so as to achieve wealth creation, protection, and inheritance. Last but not least, family governance mechanism, as a guarantee of the management system, requires to establish an effective governance structure within the family, while achieving joint wealth management goals. Family governance not only includes the wealth protection and operation of wealth, but also involves family members’education and cultivation, so as to ensure long-term stability in family wealth. The completeness of family wealth management system demonstrates a combination of family wealth goals, wealth management tools and family governance mechanisms. Hong Kong Fiduciary Association Limited will continue to serve as a connector linking between high-net-worth individuals and inheritance service providers, providing professional and dedicated family wealth management services, and assisting families in establishing a comprehensive wealth management system, so as to ensure long-term growth and inheritance of family wealth.
Hong Kong Trust Global Financial Forum Wraps Up in Shenzhen
On the afternoon of February 25, 2025, Hong Kong Trust Global Financial Forum – Hong Kong & US Listing Networking Session (Shenzhen) concluded successfully in Futian Shangri-La, Shenzhen. Sponsored by Hong Kong Fiduciary Association Limited (HKFA), this event was co-organised by Hong Kong Trust Capital Management Limited, AllBright Law Offices, Ernst & Young, Rainbow Capital (HK) Limited, Hong Kong Enterprise Association Limited, and Inheritance Asset Management Limited. As the second tour of Hong Kong Trust Global Financial Forum Series, the event continued to echo the theme, focusing on the impact of the “New Nine Guidelines”issued by China’s State Council on mainland enterprises’IPOs and international expansion. It delved into cutting-edge trends in overseas IPOs, key considerations for establishing overseas structures, and strategies for compliance and security. In addition, the forum gathered many industry leaders and elites, with more than 100 professionals in the financial, tax and corporate sectors, in which participants further discussed the new opportunities of listing and financing in Hong Kong and the US, sharing the latest views and practical experience, and providing valuable ideas and solutions for the growth of Chinese mainland enterprises venturing abroad. Meanwhile, the forum also focused on the important role of Offshore Trust in cross-border financing for enterprises, especially in the strategy of safe landing for wealth. Through setting up Offshore Trust, enterprises can achieve asset isolation and protection, tax optimisation, which ensures the orderly inheritance of wealth through flexible Trust structures. 1. Gathering of Big Names in the Forum for In-depth Analysis of the Lasted Market Trends In the guest sharing session, Lawyer Han Meiyun, Senior Partner of AllBright Law Offices, firstly appeared on the stage to share with the guests on the topic of Hong Kong’s IPO Boom and A+H Shares Model. With her profound legal background and extensive experience in the capital market, Lawyer Han Meiyun analysed the dynamic trends of the A-share and Hong Kong stock markets with practical cases. Moreover, she explained the key role of the A+H Shares Model in cross-border financing of enterprises. Combining with the current actual situation, Lawyer Han Meiyun proposed the capital market development model of “H first and then A”, which provides new Internationalisation strategies for enterprises. It also brought valuable insights and inspirations to the guests, helping enterprises advance their ideas and make precise design in overseas financing. Afterwards, Mr. Zhang Linghui, Audit Services Partner of Ernst & Young, Shenzhen, shared with the guests the audit differences between A-shares and Hong Kong shares. With his professional insight, Mr. Zhang deeply analysed the key differences between A-share and Hong Kong shares in terms of auditing process, standards and policies. Furthermore, he combined with the characteristics of other major capital markets such as the US stock market, and sharing valuable information to the guests, which enabling them to have a clearer and more comprehensive understanding of the listing rules of A-shares, Hong Kong stocks and the US stocks. All these provided important references to the enterprises in their cross-border financing and listing. After that, Mr. Danny Leung, Managing Director of Rainbow Capital (HK) Limited, shared his views on the key preparatory and planning for listing on the Hong Kong Stock Exchange (HKEX) and NASDAQ. Besides, he introduced the listing thresholds, the market environment and unique advantages of the Stock Exchange of Hong Kong Limited (SEHK) and NASDAQ respectively. Through comparing the listing costs and development prospects of the two jurisdictions,he made a clear timeline for listing on HKEX for the guests, covering the whole process from IPO preparation to listing, which designed to help enterprises navigate the listing process. The last sharing was brought Mr. Melvin Mui, COO of Hong Kong Trust Capital Management Limited (HKTCM). With his profound attainments and professional knowledge in the field of finance, Mr. Mui delved into the key role of Trust structure in the listing process of enterprises. On top of that, he elaborated on how the Trust structure can help enterprises optimise their equity allocation while effectively safeguarding shareholders’ rights and interests during the listing process, as well as how to achieve sound wealth appreciation and orderly inheritance of family wealth. Mr. Mui noted that Family Trust, as a powerful tool for wealth management, can be particularly well suited for high-net-worth individuals (HNWIs), which plays an effective role in wealth planning and security protection. Prior to IPO, one of the most important functions of Family Trust is its segregation of Trust assets in the establishment of Offshore Trust structure. Through a Trust structure, business owners can separate their personal assets from business assets, so as to shield personal wealth from business risks. His insights were both practical and though-provoking, which aroused much echo among guests. 2. Interactive Exchanges, Professional FAQ Received Positive Feedback The wonderful presentations by the four speakers were met with enthusiastic applause from the audience. This was followed by an FAQ session featuring Lawyer Han Meiyun, Senior Partner of AllBright Law Offices, Mr. Zhang Linghui, Audit Services Partner of Ernst & Young, Shenzhen, Mr. Danny Leung, Managing Director of Rainbow Capital (HK) Limited, and Mr. Melvin Mui, COO of HKTCM. The panel engaged in vibrant interactions and exchange with the attendees. Some of the questions about the exchange session are as follows: 1. What kind of circumstances will be met by a domestic enterprise to be recognised as an indirect overseas offering and listing? A: According to Han Meiyun, senior partner of AllBright Law Offices, according to the new filing regulations on overseas listings, the issuer shall be recognised as a domestic enterprise for the purpose of indirect overseas issuance and listing. In accordance with the relevant circumstances, and the regulator will generally consider the proportion of the enterprise’s financial indicators, business activities and the identity of the senior management, etc. However, in actual operation, the new regulations follow the principle of “Substance Over Form Principle”, i.e. in determining whether an issuance is an indirect offshore offering, the total assets, net assets, operating income, percentage of total profit, identity of executives and business operation of the enterprise should be taken into account, rather than just the formal place of incorporation or holding structure. 2. What financial preparations does a company need to make before listing overseas? A: Mr. Zhang Linghui, Audit Services Partner of Ernst & Young, Shenzhen, noted that listing marks an important milestone in the expansion of an enterprise. Prior listing, the key financial considerations includes the completeness of financial documents, business processes internal
Hong Kong Becomes Treasure Trove Due to High Tax on Global Rich
Thomas Piketty, the author of the world’s bestselling Capital in the Twenty-First Century, wrote in the book: “The clear regressivity in the top centiles reflects the importance at this level (the high and low levels of tax rates) of capital income, which is largely exempt from progressive taxation.” This reveals the underlying crux of rising global wealth inequality. Many countries are ready to raise taxes on the rich Obviously, the fact is that the real tax rates on the affluent are so much lower than those of the general public, which has become a top priority for many countries to stay competitive in recent years, so much so that their intention to target the wealthy population has been well known. Let’s take a look at some countries that will soon levy higher taxes on the rich. 1. New Zealand According to a report by New Zealand Inland Revenue Department, (IRD), revealed in April, the average New Zealanders pay 20.2 percent tax on all income, goods and services, compared with super rich New Zealanders paying only 9.4 percent. David Parker, Revenue Minister, said the government is seeking targeted measures. 2. Canada The Canadian government released its federal budget plan in March meant to close tax loopholes that favour the wealthy and corporations, conduct a public review to identify federal tax expenditures, tax loopholes, and other tax avoidance mechanisms that particularly benefit to high-income individuals, the wealthy and large corporations, while putting forward proposals to eliminate or limit these expenditures. 3. United States However, one of the most typical examples is that of the U.S. government. According to the Fiscal Year 2024 Budget in March, the Biden government proposed to levy a 25% minimum tax on billionaires on unrealized capital gains on assets such as equities. Admittedly, Biden’s proposal can find crucial problems and work on them. By doing so, those who shall still be levied on capital gain tax, even though they purchase shares. In addition, Biden has proposed raising the capital gains tax rate to 39.6% from 20%, and increasing income levies on corporations and the affluent population. Upon implementation, wealthy Americans may be in for a capital gains tax hike. Such an action has caused shock waves: A series of wealth tax policies on the rich in the developed countries have raised a storm of protest from top billionaires. For example, Elon Musk, the world’s richest man said that even taxing billionaires at 100 percent wouldn’t solve America’s national debt problem. For another instance, Bill Gates, the founder of Microsoft, argued that higher taxes on the wealthy would undermine social incentives and economic development. Seemingly, the wealthy hold a strong protest on the rich tax, yet in fact they have already faced the music by taking precautions beforehand. Global wealth shift of the rich makes Hong Kong become a “Treasure Trove” Recently, relevant reports suggest that “global funds are flowing into Hong Kong”, “US dollar deposit business in Hong Kong has boomed”. Ms Julia Leung, the Chief Executive Officer of the Hong Kong Securities and Futures Commission, also said at the ASIFMA China Capital Markets Conference on 27 June, “indeed, our data for the first quarter show signs of hope. The licensed corporations under major investment banks saw their net profits before tax jump twofold over the previous quarter. Total income also rebounded by a high single-digit percentage.” Likewise, on 29th June, John Lee Ka Chiu, the Chief Executive of Hong Kong Special Administrative Region (HKSAR), said in an interview with South China Morning Post that “with capital and investment returning to Hong Kong and this turnaround would be better reflected in the city’s third-quarter figures.” Undoubtedly, these reports have highlighted the attractiveness and prospects of Hong Kong, as a leading global asset and wealth management hub. Thus it can be seen that Hong Kong is truly an “ideal destination for investment” that attract visitors from different places to engage in commercial activities. With a large and well developed financial system, Hong Kong can fully satisfy the multiple needs for the global billionaires with a wide range of products and services such family offices, stocks, trusts, bonds, insurance, precious metals, property, and even virtual assets. Naturally, Hong Kong has become a preferred wealth management centre for ultra-high-net-worth individuals in the international context. What makes Hong Kong so desirable? As the city with the highest concentration of ultra-high-net-worth individuals (UHNW) in the world (more than 15,000), Hong Kong is also home to the top professional financial organisations and financial talents. On top of that, Hong Kong has many world-renowned advantages: 1. Simple and competitive tax system Hong Kong is regarded as a “low-tax paradise” because of its narrow tax base, few tax types, low tax rates and many tax exemption policies. In particular, what billionaires most focus on no capital gains tax nor estate duty in Hong Kong. 2. The Linked Exchange Rate System The Linked Exchange Rate System is defined as an economic approach that enables Hong Kong to effectively protect itself from external financial turbulence and political shocks. By anchoring the Hong Kong dollar to the US dollar, it can reduce exchange-rate volatility for individuals, enterprises and the government in economic activities, thereby helping reduce transaction costs while stabilizing the expectations of all parties. 3. Continuous innovation in the financial market Recently, Hong Kong has implemented a series of positive measures, such as the launch of the network of Family Office Service Providers, the introduction of HKD-RMB dual counter, the opening of the Licensing Regime for Virtual Asset Trading Platforms and the relaunch of the Investment Immigration Program. All these efforts have proven that Hong Kong has proactively responded to the trend of development of the times while striving to satisfy the growing needs of various parties. Due to continuous innovations in the financial sector, Hong Kong has remained among the top in various areas of competitiveness in the global financial market. Conclusion: Against the backdrop of a complex international landscape and geopolitical tensions, Hong Kong is now playing an important role as a global wealth centre. Amid such historic opportunities, it will strive for even remarkable results in near future through continuous reform, innovation and enhancement. Like Mr Lee Ka-chiu, the Chief Executive of HKSAR, expresses great expectations that Hong Kong will definitely have huge potentials with and greater prosperity infinite splendour!
Elderly-Care Trusts in Demand as Pension Competition Intensifies
During the Spring Festival, banks in China did not let down its guard, but instead took unprecedented action to “attract clients from its competitors”. In fierce competition, banks nationwide have made every possible effort to tempt clients to set up a personal pension account by marketing activities such as the lucky draw, instant discount, referral rewards, etc. Regrettably, despite the craze for opening a bank account, people are reluctant to deposit, which has become a hidden hazard that cannot be neglected. As of the first half of 2023, the number of individuals participated in personal old-age pension exceeded 40 million, with the amount of deposits exceeding 18 billion yuan, which is merely equivalent to 450 yuan per capita contributions. With a meagre 450 yuan, how can we guarantee our care-free life after retirement? It’s nothing short of a unrealistic illusion. Therefore, through other effective financial instruments, solving elderly-care problems has become one of the most pressing social issues. In particular, some countries and regions like Japan, Hong Kong, are at the forefront of this trend, having developed full-fledged elderly-care Trust, which provides a solution to address the challenges of an ageing society. Accordingly, it has become a preferred choice of many retirees. There are the following significant advantages behind its the favour of the general public: Reasonable utilisation of funds. You can pre-arrange living expenses, medical expenses or nursing care expenses for yourself or your parents to ensure a high-quality retirement life. Asset protection has the effect of isolating all types of risks. When assets are transferred to a Trust account, they are held in the name of the Trustee Company and strictly protected by relevant Trust laws. This means that your assets can be protected to the greatest extent possible, thus preventing them from exposed to all kinds of potential risks. Achieve steady growth through professional investment. Your assets are not only protected, but can also grow steadily through professional investment teams, providing you with a stable income. A comprehensive service system ensures a better life in your old age. Trustee Companies can offer you with a variety of elderly-care services, given the long term relationships they have established with many well-known elderly service organisations. With Elderly-Care Trusts gaining further popularity and growth nationwide, we are fully confident that it is bound to become a wise option for a growing number of people. Meanwhile, Elderly-Care Trusts can safeguard those in need, enabling them to live a more comfortable, secure and care-free life in their old age and enjoy the joy and beauty of old age.
Asia-Pacific Leads Investment as Hong Kong Eyes Family Office Hub
Recently, Union Bank of Switzerland (UBS) released Global Family Office Report 2024, which brings together the insights of 320 single family offices across seven regions of the world. The result shows that the Asia-Pacific region (APAC) looks set to be the top destination of added allocations in family offices globally. According to this survey, the total net wealth of the family offices exceeded US$600 billion, with an average net wealth of US$2.6 billion. Meanwhile, APAC has the highest number of respondents of all regions. The result presents that global family offices have shown significant changes in investment in terms of regions, portfolios, and methods. LH Koh, Head of UBS Global Family Institutional Wealth APAC, shared, “almost half of APAC family offices plan to allocate more assets to APAC over the next five years, with APAC set to be the top investment hotspot globally.” Indeed, Hong Kong’s family office market has been flourishing in recent years. Invest Hong Kong (InvestHK) announced on 18 March that according to the Market Study on the Family Office Landscape in Hong Kong conducted by Deloitte, commissioned by the department, it is estimated that there are more than 2,700 single-family offices in Hong Kong. Furthermore, if we count in the multiple family offices not being included in this survey, the total number of family offices in Hong Kong will be far more than 2,700. The details are set out below: In recent years, the Hong Kong Government has keenly consolidated its status as a global family office hub and is determined to maintain an unrivalled position. To this end, the Government has introduced a series of policies and complementary measures to attract more ultra-high-net-worth individuals and families to set up family offices in Hong Kong. The Government has put in place a series of measures to witness its thriving family office sector. As of February this year, the dedicated team of InvestHK has assisted 58 family offices to set up or expand their operations in Hong Kong, and more than 100 family offices indicated that they had decided or were preparing to set up or expand their operations in Hong Kong. As a leading international centre and well-recognised wealth management centre, Hong Kong provides an enabling environment with many unique advantages for family offices to operate and grow. Being a gateway to the Chinese Mainland, Hong Kong offers outstanding potential for building a lasting family inheritance for business families from both the East and the West, becoming a preferred destination for family offices.
Hong Kong OFC: A New Choice for Global Asset Allocation!
As one of the products designated by New Capital Investment Entrant Scheme, Hong Kong Open-ended Fund Company (OFC), leading the new trend toward asset allocation, is preferred by the advantages such as openness,flexibility, risk-control capacity, stable return. The development of open-ended fund company in Hong Kong did not happen overnight. As early as 2014, Hong Kong had planned to build an open-ended fund company system in terms of rules, fees and taxation. The Securities and Futures (Amendment) Ordinance 2016 has formally been implemented since 30 July 2018. This marks that “open-ended fund company” (or “OFC”), a new company form,was introduced into Hong Kong. As a new form of fund scheme with a wider scope, more inclusiveness and a higher degree of freedom, investors will be able to obtain stable returns by utilising OFC for global asset allocation according to their needs. In addition, an OFC must be managed by an investment manager who has a Type 9 (asset management) regulated activities licensed/registered by Securities and Futures Commission of Hong Kong (SFC). Similar to the Hong Kong Unit Trust structure, an OFC may be established as an umbrella structure (as illustrated above) consisting of multiple sub-funds operating within a single entity with its own investment objectives in order to diversify risks. As a late bloomer in asset allocation, OFC provides investors with an importance tool to spread their risks by asset allocation and diversification, and capture its global investment opportunities due to flexible investment strategies, wider investment scope and easier access to international markets.
The Chinese Mainland Capital Is Flooding into Hong Kong
Currently, with a large amount of the Chinese Mainland (hereinafter referred as to the Mainland) capital pouring into Hong Kong, there are 4 hot trends in terms of bank account opening, cross-boarder wealth management, insurance purchasing and real estate investment. 1. Rush to bank account opening: Despite higher entry thresholds for Hong Kong bank account opening, yet it still boost the Mainland investors’ enthusiasm. Banks such as Hang Seng and HSBC have seen a surge in new clients, with non-local residents accounting for a significant proportion, especially those from the Mainland. 2. Cross-boundary wealth management connect “Southbound Service”: “Southbound Service” is available to the Mainland residents to purchase eligible wealth management products in Hong Kong, and the amount of cross-border remittance has surged by more than 60 times, showing the strong demand for freer asset allocation. 3. Hong Kong’s insurance boom: New policy premiums from Mainland visitors hit a record high in the first quarter, up more than 60% year-on-year. Hong Kong Endowment Plan attracts middle-and-high-net-worth families with high expected returns, becoming the preferred choice for risk hedging and appreciation. 4. Buying property in Hong Kong: After the “Removal of spicy measures”(the Hong Kong government’s decision to completely withdraw all demand-side management cooling measures in the housing market), Hong Kong saw a record purchase surge by Mainland buyers. In addition, the number and cost of registrations in both the primary and secondary markets reached record highs, leading to a significant reduction in taxes and fees. Why does Hong Kong attract so many affluent individuals ? They are three major reasons. Firstly, as interest rates on the Mainland continue to fall, Mainlanders are eager to transfer their money into overseas bank accounts for seeking higher returns. Secondly, some affluent Chinese are returning to Hong Kong as Singapore and the United States tighten restrictions on investment. Thirdly, the wealthy people adopt risk diversification strategies by allocating cross-border assets. This is also a major incentive for Mainland funds flooding into Hong Kong. With ever closer bond between Hong Kong and the Mainland, we are fully confident that Hong Kong will still emerge as an international hub for capital flows for the Mainland for a long time to come.
Why Do the Wealthy Prefer to Set Up Family Offices in Hong Kong?
Thanks to its competitiveness, unique geographic location, solid market foundation, and mature financial and legal environment, Hong Kong is well positioned to be a top destination to allure the world’s wealthy to set up family offices. Firstly, Hong Kong is backed by the Chinese Mainland, the world’s second largest economy, which offers infinite wealth growth potential for family offices. As China’s economy continues to grow, the Mainland market brings vitality and opportunity into family offices in terms of investment options and asset appreciation. Meanwhile, Hong Kong assumes “super-connector” role between the Chinese Mainland and the rest of the world, being a global destination for setting up family offices as it offers access to a wide range of resources for global perspectives to help them achieve global wealth allocation and risk management. Secondly, Hong Kong’s well developed financial system and sound legal system provide a reassuring level of protection for family offices. As the world’s largest offshore RMB hub, Hong Kong has one of the highest concentrations of the world’s top financial institutions and professionals, providing diversified financial products and services for them. Moreover, thanks to its well-established and transparent legal system, Hong Kong provides stronger legal support and protection for family offices to ensure a smooth succession of family wealth and sustain enduring family business. Thirdly, capitalising on cultural commonality with the Chinese Mainland and the city’s diverse talent pool, Hong Kong possesses unrivalled advantages for family offices. Besides, as a fusion of East and West, it has unique cultural diversity to attract global talents. All these help Hong Kong better understand and serve the Mainland clients so as to satisfy their needs for family culture inheritance and wealth management. In general, Hong Kong offers an ideal environment for setting up family offices with many unparalleled advantages that encompass the strong backing from the Motherland, its mature financial and legal environment, cultural commonality and global talent pool. During this era of global economic growth amid accumulating family wealth, looking ahead, we are fully confident that the prospects for family offices in Hong Kong are even more promising.
