Hong Kong hones in on Middle East, Indonesia to attract family offices as city steps up efforts, InvestHK says

“For these big Indonesian family businesses, as well as family offices, they’re familiar with Hong Kong, but surprisingly, they’re not too aware of how much knowledge and wisdom we have in the family office [space],” Fong said.

High-level visits to the Middle East last year by Chief Executive John Lee Ka-chiu, Financial Secretary Paul Chan Mo-po and Hong Kong Monetary Authority CEO Eddie Yue Wai-man were paying dividends, as more wealthy individuals were looking to set up family offices in the city, he said.

Hong Kong had more than 2,700 single-family offices at the end of last year, according to a study published by Deloitte in March.

The city is renowned for its “simple, direct and transparent” tax regime, said Fong, which introduced a slew of tax incentives for family offices in May last year.

Singapore, Hong Kong’s main rival as an Asian financial hub, has stricter rules for family offices to qualify for tax incentives, said Paul Ho, a financial services tax partner at EY.

This includes a 10 per cent threshold of assets under management invested locally, whereas no such requirement in Hong Kong, he said.

Unlike the city state where single-family offices seeking tax concessions must seek approval from the Monetary Authority of Singapore first, Hong Kong has a self-assessment tax regime where the tax concessions automatically apply provided the family offices meet the minimum criteria.

Ho suggested that the government do more, such as setting up a hotline, for family offices to get in touch with the tax department to answer questions related to tax policies, noting that this will “further facilitate the process and provide more certainty”.

InvestHK’s Fong said they were exploring setting up of an art-storage facility at Hong Kong International Airport to serve as a catalyst to speed up and encourage art transactions in the city.