According to Hong Kong Business, Hong Kong will increase its family office regulatory compliance. In addition, Hong Kong will expand its tax incentives for alternative investments.
The competition for family office capital is more than tax advantages alone. It is based on substance, documentation, and governance.
Proposed requirements include presence of local personnel and expenditure of money in Hong Kong. Those claiming tax concessions will need to produce documentation proving their status.
According to PwC South China, the new requirements require better documentation for valuations and asset types. According to Deloitte China, the purpose of the requirements is to prove actual economic presence.
This is the trend among all financial centers.
Funds and capital can always flow rapidly. Governance and control cannot remain informal and undocumented. Family office families using structures like holdings, funds, trusts, and investment companies must have operations to support the structure.
For family members, it is a question that changes focus. The issue is less about which structure they use but whether it is one they could justify.
For CFOs and professionals, this is an operational task. Structure diagrams, accounting documents, asset types, and governance timelines are necessary.
Tax benefits increasingly depend upon substance.
Is your structure built for advantage, or built for scrutiny?
The competition for family office capital is more than tax advantages alone. It is based on substance, documentation, and governance.
Proposed requirements include presence of local personnel and expenditure of money in Hong Kong. Those claiming tax concessions will need to produce documentation proving their status.
According to PwC South China, the new requirements require better documentation for valuations and asset types. According to Deloitte China, the purpose of the requirements is to prove actual economic presence.
This is the trend among all financial centers.
Funds and capital can always flow rapidly. Governance and control cannot remain informal and undocumented. Family office families using structures like holdings, funds, trusts, and investment companies must have operations to support the structure.
For family members, it is a question that changes focus. The issue is less about which structure they use but whether it is one they could justify.
For CFOs and professionals, this is an operational task. Structure diagrams, accounting documents, asset types, and governance timelines are necessary.
Tax benefits increasingly depend upon substance.
Is your structure built for advantage, or built for scrutiny?