Hong Kong plans to introduce a tax exemption on investment gains from cryptocurrencies and other alternative assets for hedge funds, private equity funds, and eligible family offices. This initiative aims to strengthen its position as a leading global wealth management centre.
A consultation paper issued by the Financial Services and the Treasury Bureau outlines a proposal to broaden capital gains tax exemptions. These would now include overseas properties, carbon credits, private credit, virtual assets, and other alternative investments, applicable to privately-offered funds and single-family office investment structures.
The proposal underscores that taxation plays a crucial role in determining where wealth management firms establish their operations. It reaffirms the government’s commitment to fostering a favourable environment for the sector.
Hong Kong, already Asia’s largest hedge fund hub and ranked second for private equity fund capital under management, is ramping up efforts to attract capital. These steps come as the city seeks to position itself as a premier destination for digital assets amidst global economic and geopolitical challenges.
Additionally, the proposal suggests extending tax exemptions to include pension and endowment funds, further enhancing Hong Kong’s attractiveness to diverse investor groups.
According to government data, the city is home to more than 2,700 single-family offices, with over half managing assets exceeding US$50 million. These measures are part of Hong Kong’s broader strategy to solidify its status as a major wealth and asset management hub.
