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Family OfficeHK  

Why Hong Kong
Located at the heart of Asia, Hong Kong forms a 24‐hour continuous trading system with other global financial centres, including New York and London.


At the southern part of China, the city’s extensive geographical, cultural and linguistic links with the Mainland, and the distinctive advantage of “One Country, Two Systems”, bestow on Hong Kong a unique position to being the gateway connecting the East and the West.

As a well‐recognised premier international financial centre and wealth management centre, Hong Kong offers many unique advantages for family offices to operate and grow.

Frequently Asked Questions (FAQ)  

1. How are typical family office structures taxed under Hong Kong law?

Family offices take different forms to operate, depending on the nature of the activities the family office undertakes, investments the family has as well as how structured/matured the family office is. In most cases, family offices are operated via a corporate entity, which may or may not be in the same groups of the investment vehicles of the family. The family office entity itself is taxed in the same way as other corporates in Hong Kong. 




2. Are there any tax incentives in Hong Kong that a family office should be aware of?

Hong Kong does not tax capital gain or offshore profits. In addition, dividend income is generally not taxable in Hong Kong.

A new profits tax exemption ordinance (the Bill) also came into operation on 1 April 2019. Under the Bill, all privately offered onshore and offshore funds operating in Hong Kong, regardless of their structure, their size or the purpose that they serve, can enjoy profits tax exemption for their transactions in specified assets subject to meeting certain conditions. An eligible fund can also enjoy profits tax exemption from its investment in both overseas and local private companies.

Family offices can rely on the above favourable tax regime to manage the families’ investments in Hong Kong in a tax efficient manner.

3. Under what circumstances may a family office need or wish to be licensed with the Securities and Futures Commission? And if a license if required, what are the application procedures and relevant forms to be filed? (per SFC’s circular on licensing obligations of family offices dated 7 Jan 2020)


In Hong Kong, there is no specific licensing regime for family offices. However, family offices may be subject to the licensing regime under the Securities and Futures Ordinance (SFO) which is activity-based. Thus, a family office is not required to be licensed under the SFO if its services do not constitute any regulated activity or they fall within any of the available carve-outs. The licensing implications in Hong Kong do not hinge on whether clients are families.

Here are some examples where a single family office will not need a licence:

1. A family appoints a trustee to hold its assets of a family trust, and the trustee operates a family office as an internal unit to manage the trust assets. A licence will not be required as the family office is not providing asset management services to a third party.


2. The family office is established as a separate legal entity which is wholly owned by a trustee or a company that holds the assets of the family. A licence for Type 9 regulated activity (asset management) will not be required as the family office will qualify for the intra-group carve-out as full discretionary investment manager.


A multi-family office that provides services to more than one high net worth family will be required to be licensed; and the type of licence required depends on the services to be provided in Hong Kong.

A family office seeking to be licensed will be subject to the same licensing requirements as any other licence applicants. Parts II and III of the Licensing Handbook provides more details on the licensing requirements and application procedures.


For more information, family offices may refer to the SFC’s circular on the licensing obligations of family offices or contact SFC’s dedicated email address.

3.1: Is there a definition for “family” or “family office” under the licensing regime? (per SFC’s FAQs on family offices dated 8 Sep 2020)


No, the Ordinance does not define “family” or “family office”. It is noteworthy that the licensing regime does not hinge on whether an entity is called a family office or whether its clients are families. A family office operator will have more flexibility to determine its legal form and operational structure with respect to its services to be provided.

3.2: What constitutes a single family office for the purposes of the SFC’s circular dated 7 January 2020? (per SFC’s FAQs on family offices dated 8 Sep 2020)


It typically refers to an arrangement (often structured through a corporate vehicle owned or controlled by the family) under which the assets, investments and long-term interests of members of a single family are managed. The SFC has not sought to define what relationships of blood or of law would constitute family membership because the licensing obligations under the Ordinance do not hinge on whether the clients of a family office are family members or not.

3.3: Is a single family office required to be licensed under the Ordinance? (per SFC’s FAQs on family offices dated 8 Sep 2020)


The issue of whether a single family office is required to be licensed under the Ordinance is determined by reference to three key factors, all of which must be present in order to give rise to a licensing obligation: firstly, the services provided by the family office constitute one or more regulated activity as defined under the Ordinance; secondly, the family office is carrying on a business in the provision of such services; and thirdly, the business is carried on in Hong Kong.

In determining whether certain asset management activities amount to a regulated activity, the definition of Type 9 regulated activity contains an intra-group carve-out for a single family office where it provides such services solely to its related entities, which are defined as its wholly owned subsidiaries, its holding company which holds all its issued shares or that holding company’s other wholly owned subsidiaries.

What amounts to “carrying on a business in Hong Kong” is not defined in the Ordinance and will need to be determined by reference to the facts of each case, including whether the person is performing an occupation or a duty which requires attention; the activity involves continuity; the activity is capable of making profit; and the activity was carried out for the purpose of making profit. A genuine single family office arrangement, established to serve the investment needs of members of a single family, which is not being run as a business (i.e. not receiving any income, other than reimbursement of operating expenses from the family) or have the pursuit of profit as its business objective, should not in the ordinary course be considered as carrying on a business from a licensing perspective. It is also not the SFC’s intent to extend its regulatory oversight to this type of single family office setup.

3.4: If two or more single family offices co-operate together for the purposes of sharing a common administrative infrastructure in order to reduce operating overheads, would such arrangements trigger a licensing obligation? (per SFC’s FAQs on family offices dated 8 Sep 2020)


The discussion in the response to Q3.3 above on the types of factors required to be present in order to give rise to a licensing obligation under the Ordinance would apply equally in these circumstances.

The sharing of office premises and administrative infrastructure by two or more family offices would not of itself automatically trigger a licensing obligation for such single family offices. However, where two or more single family offices make arrangements for the sharing of human resources involved in investment related matters, research or the investment process, this may be regarded as a multi-family office structure (see also the response to Q3.5 below) and, where the provision of services is carried on as a business, increases the likelihood of a licensing obligation arising.

3.5: What constitutes a multi-family office for the purposes of the SFC’s circular dated 7 January 2020 and is a multi-family office required to be licensed? (per SFC’s FAQs on family offices dated 8 Sep 2020)

As mentioned in the Circular, “a multi-family office by definition serves more than one high net worth family” and such arrangements are likely to be evident.

Multi-family offices are typically established and run as commercial ventures. The issue of whether a multi-family office is required to be licensed under the Ordinance will be primarily determined by the three key factors set out in the response to Q3.3.

4. What are the key elements of the Hong Kong Professional Investor regime, and how does it affect the way my family office trades in the markets?


For multi‐family offices licensed by the Securities and Futures Commission (“SFC”), they are exempt from applying various requirements under the Code of Conduct for Persons Licensed by or Registered with the SFC (“Code of Conduct”) when dealing with clients which qualify as professional investors (“PIs”).

Under paragraph 15 of the Code of Conduct, there are three categories of PIs, namely Institutional PIs, Corporate PIs and Individual PIs. For details of the exemptions to be applied to different categories of PIs and the procedures to be taken by licensed corporations so as to apply the exemptions, please refer to paragraphs 15.1 to 15.4 of the Code of Conduct.

For details on the definition of professional investors, please refer to paragraph 15.2 of the Code of Conduct, Part 1 of Schedule 1 of the Securities and Futures Ordinance and also the Securities and Futures (Professional Investor) Rules.

5. What employment obligations should I be aware of in setting up a family office structure in Hong Kong, e.g., pension, insurance, and other benefits?


There are minimum entitlements in place for Hong Kong employees. More information on entitlements such as statutory holidays, sickness allowance, maternity leave, severance and long-service payments can be found at the Employment Ordinance.

Employers are obliged to take out employees’ compensation insurance policies for their employees under the Employees’ Compensation Ordinance. They are also required to make Mandatory Provident Fund Schemes (MPF) contributions for their employees under the Mandatory Provident Fund Schemes Ordinance.

6. What are the key things I need to know about the Hong Kong immigration regime?


Working Visa Requirements

Short-term visitors can make the most of Hong Kong’s light-touch visa policies and are permitted to conduct business negotiations and sign contracts while on a visitor’s visa or entry permit. Foreign nationals working in Hong Kong for longer periods of time require a visa before they can live or work in Hong Kong.

Hong Kong Visa Types

Employment Visa
To employ overseas staff, the applicant must demonstrate that a prospective employee has special skills, knowledge or experience not readily available in Hong Kong. The proposed employee must be sponsored by an employer in Hong Kong.

Entrepreneur Visa
The applicant should be in a position to make substantial contribution to the economy of the HKSAR, with consideration factors such as business plan, business turnover, financial resources, investment sum, number of jobs created locally and introduction of new technology or skills. An entrepreneur who wishes to establish or join in a startup business may also apply and startup business may be considered favourably if it is supported by a government-backed programme with a rigorous vetting and selection process.


7. Does Hong Kong offer an investment immigration scheme and, if so, what are the requirements?


A person who wish to enter/stay in the Hong Kong Special Administrative Region (HKSAR) for investment as entrepreneurs can apply under the General Employment Policy (GEP).

The applicant should be in a position to make substantial contribution to the economy of the HKSAR, with consideration factors such as business plan, business turnover, financial resources, investment sum, number of jobs created locally and introduction of new technology or skills. For more information, please visit here.


8. What options does Hong Kong offer for resolution of commercial disputes?


Hong Kong has a well-established legal system firmly based on the rule of law. Under the principle of "one country, two systems", Hong Kong’s legal system is based on the common law as supplemented by statue law. Over the years, the Department of Justice (DoJ) has been making every effort to enhance Hong Kong’s status as a leading centre for international legal and dispute resolution services in the Asia Pacific region. The New York Convention applies to Hong Kong, and Hong Kong arbitral awards are enforceable in over 150 Contracting States.


In case of disputes, individuals can contact Hong Kong International Arbitration Centre at The Panel and the List of Arbitrators maintained by the Hong Kong International Arbitration Centre include different types of arbitrators. These experienced arbitrators come from various countries or regions, and are professionally trained and specialised in different jurisdictions and practice areas. They can provide high-quality international legal and dispute resolution services.


Contact Us:

ur firm has a number of qualified professional tax accountants to provide customers with professional tax consulting, tax planning, tax verification and tax investigation. Welcome to contact us. Thank you!


Wilson C. Kwok,

CTA - Shenzhen Qianhai Practice Certificate Number : SW00100045

MA(Hons), CA, FCPA (Practising), 

CFP CM, CFT, China Certified Dealmaker

ADD: Suite 609, 6th Floor, China Insurance Group Building, 141 Des Voeux Road, Central, Hong Kong

TEL: +852 2117 3613

FAX: +852 2117 3568

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