Establishing a single family office in Hong Kong

Hong Kong does not license family offices as such. The SFC's guidance on family offices, which supplements its circular of 7 January 2020, explains that a licence for asset management (Type 9 regulated activity) is needed only where the office provides a regulated service, carries on a business of providing it and does so in Hong Kong. A genuine single family office (SFO) that receives no more than reimbursement of its costs from the family is generally not carrying on a business, and the Type 9 definition carves out an SFO that serves only its wholly owned subsidiaries, a holding company owning all its shares, or that holding company's other wholly owned subsidiaries. Sharing premises and administration with other families does not of itself trigger licensing, but sharing investment staff or research may turn the arrangement into a multi-family office (MFO), which, as a commercial venture serving more than one family, will usually need a Type 9 licence and possibly other regulated activities.

The tax framework is set out in the Inland Revenue (Amendment) (Tax Concessions for Family-owned Investment Holding Vehicles) Ordinance 2023, in force since 19 May 2023 and applying to years of assessment from 1 April 2022. A family-owned investment holding vehicle (FIHV) that is normally managed or controlled in Hong Kong and is managed by an eligible SFO pays 0% profits tax on profits from qualifying transactions in specified assets, and on incidental transactions up to 5% of trading receipts; the concession extends proportionately to family-owned special purpose entities (FSPEs) that hold and administer its assets. The eligible SFO must be a private company in which family members hold at least 95% of the beneficial interest, earning at least 75% of its assessable profits from services to specified persons. The SFO itself pays ordinary profits tax on its fees. Family members hold at least 95% of the FIHV; a charitable entity may hold up to 25% if the family holds at least 75% and unrelated persons no more than 5%.

Substance is tested holistically. The aggregate net asset value of specified assets managed for the family must be at least HK$240 million, a threshold that can also be satisfied by reference to either of the two preceding years. The FIHV must have, directly or through the SFO, at least two full-time qualified employees in Hong Kong and incur at least HK$2 million of operating expenditure there, commensurate with its core income-generating activities. Anti-abuse rules apply to investments in private companies (immovable property, holding period and short-term asset tests), to round-tripping by Hong Kong residents and to arrangements whose main purpose is a tax benefit. The election into the regime is made in writing and is irrevocable.

The Inland Revenue (Amendment) (Preferential Tax Regimes for Funds, Family-owned Investment Holding Vehicles and Carried Interest) Bill 2026, gazetted on 12 June 2026, would broaden qualifying investments (for example private credit, digital assets, precious metals, carbon-related instruments and overseas real estate), measure the HK$240 million threshold against qualifying investments rather than net assets so that family loans are not deducted, relax the FSPE rules and refine the anti-abuse tests. As at the latest official update the bill had completed committee scrutiny but had not been enacted, so families should plan on current law and treat the changes as prospective. Hong Kong suits families focused on Greater China and on listed Asian markets, and it links to residence through the New Capital Investment Entrant Scheme, under which an investment of HK$30 million may be made through an FIHV or FSPE holding company managed by an eligible SFO.