HONG KONG : Hong Kong passed a long-anticipated tax concession bill on Wednesday, offering a tax exemption for eligible family offices, as the city tries to restore its regional financial hub status while competing with rivals like Singapore.
The new regime, which takes effect from May 19 and can apply to tax assessments starting from April 1, 2022, will exempt profits earned from qualified transactions by single family family-owned investment holding vehicles, according to a press release by the city's Inland Revenue Department.
The move comes as many wealthy individuals and financial service providers have shifted to rival financial hubs such as Singapore amid rising geopolitical tensions between China and the West. The city has been rolling out other measures including revamping its investment migration scheme to attract talent and capital.
"We are committed to creating a conducive and competitive environment for the businesses of global family offices to thrive in Hong Kong," said Christopher Hui, the city's secretary for financial services and the treasury.
The move "would foster Hong Kong's position as a premier family office hub and an international asset and wealth management center," he added.
The minimum asset threshold will be $240 million for an eligible applicant.