Frequently Asked Questions (FAQ)


 

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. 


 

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.


 

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 theLicensing 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’sdedicated email address.


 

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.


 

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.


 

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.


 

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.


 

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 https://www.hkiac.org/arbitration/why-hong-kong. 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.


 

You may want to consider the following aspects:

  • Budget
  • Commute to and from work
  • Proximity to public transport and other amenities (supermarkets, cash withdrawal facilities etc.)
  • Availability of school options for children
  • Pet‐friendly policies
  • Need for domestic help

 

You can choose to own an apartment or rent a flat when you first settle in Hong Kong.

Shorter stay options include hotel and rent a serviced apartment, which allows you the time for house hunting in Hong Kong. In general, serviced apartments in Hong Kong come with furniture, utilities, security and a regular cleaning service.

Serviced apartments are available in many sizes, from small studios to units with multiple bedrooms. Rental price is determined by unit size, location, time of year and length of stay.