Hong Kong has drawn more single family offices than Singapore according to a recent tally, after the government unveiled a range of incentives including tax breaks and an investment-migration programme, according to a senior government official, who said the trend will continue amid sustained capital inflows.
Hong Kong had more than 2,700 single-family offices – corporations established to pursue investment, philanthropy and succession planning – at the end of last year, according to a study published by Deloitte in March, compared with about 1,400 single-family offices in Singapore at the end of last year, according to the Monetary Authority of Singapore.
“Over the past three years, we have witnessed a 24 per cent increase in the total number of hedge fund managers, private equity fund managers and family offices in Hong Kong,” said Deputy Financial Secretary Michael Wong Wai-lun at the Hong Kong Investment Funds Association (HKIFA) annual conference on Monday.
Chief Executive John Lee Ka-chiu set a target in October 2022 of attracting 200 large new family offices to the city by 2025. InvestHK, a government department which supports foreign investment, said it has helped 64 family offices so far to set up shop in Hong Kong, while another 130 have indicated plans to do so.
Last year, Hong Kong’s government announced a slew of measures aimed at persuading the wealth-management offices of high-net-worth families to set up in the city, offering tax breaks and a revamped investment-migration scheme.
Wong said many of these firms have scaled up, with 60 per cent of them managing assets worth more than US$50 million.
Hong Kong and Singapore are competing to be the family office hub in the region, with Singapore taking the lead in introducing tax breaks and an investment-migration scheme in 2020.
Rejecting claims about capital outflows from the city, Wong said Hong Kong bank deposits rose 5 per cent last year and further increased 2.1 per cent in the first four months of 2024 to HK$16.6 trillion (US$2.12 trillion).
Hong Kong retail funds recorded net inflows of US$3.8 billion in the three months to March this year, the most since attracting US$4.6 billion in the same period in 2021, and a sharp reversal from the US$2.1 billion net outflows seen in the previous quarter, according to data from the HKIFA.
“All these numbers and facts clearly tell us that Hong Kong remains vibrant and resilient” despite the Covid-19 related and geopolitics-related interruptions, he said.
CIES is designed to allow wealthy individuals and their families to obtain fast track residency by investing at least HK$30 million in stocks, bonds, deposits, funds, commercial properties, and investment-linked insurance policies.
Jessica Cutrera, chair of the Family Office Association of Hong Kong, said wealthy families liked setting up offices in Hong Kong due to its simple regulations and connections with mainland China.
“We have seen significant traction in the last six months with interest coming in from the Middle East, India, Israel, and from other markets around Asia,” Cutrera said while speaking at a panel hosted by the HKIFA conference, while adding that newcomers included single family and multifamily office operators.