HK sees 25% increase in family offices

Hong Kong's appeal as a world hub for asset and wealth management continues to strengthen, with the number of single-family offices in the special administrative region seeing robust growth in the past two years.

Senior government officials and industry experts said the authorities will further optimize tax incentives to make it easier for deep-pocketed families to invest in Hong Kong.

More than 3,380 single-family offices had been operating in the SAR late last year — an increase of about 680 from 2023, or over 25 percent — according to the Market Study on the Family Office Landscape in Hong Kong.

The study estimates that single-family offices contribute about HK$12.6 billion ($1.6 billion) annually to the city's economy through operating expenditure alone, and directly employ more than 10,000 full-time professionals.

"Under the 'one country, two systems' framework, the HKSAR, backed by the motherland and connected to the world, offers a favorable environment that's predictable and has high potential for family offices to grow," said Secretary for Financial Services and the Treasury Christopher Hui Ching-yu.

He said the global family office and asset management sector is undergoing a rapid evolution, placing greater emphasis on sustainable growth, inter-generational legacy and positive impact.

To reinforce Hong Kong's competitiveness, Hui said the SAR government plans to introduce legislative proposals in the first half of this year to expand the scope of qualifying investment for the preferential tax regimes offered to funds and single-family offices. The broadened range is expected to include precious metals, loans and private credit investments, and digital assets.

With various policy measures in place, Hui said he's confident of achieving the target set out in the 2025 Policy Address to help more than 220 family offices in establishing or expanding their business in the city between 2026 and 2028.

Alpha Lau Hai-suen, director-general of InvestHK, said many overseas family offices showed strong interest in Hong Kong's institutional advantages and tax incentives during the agency's promotional activities in Europe and Southeast Asia.

InvestHK is a government department tasked with attracting investment into the SAR.

The SAR offers a highly flexible investment environment, with a preferential tax regime that imposes no restrictions on the geographical location of investments, allowing family offices to deploy capital globally through the city, Lau said.

She said that, generally, single-family offices are not required to obtain a license in Hong Kong, thus helping to maintain a high level of privacy.

The study, commissioned by InvestHK and conducted by Deloitte, also found that these family offices originate from various regions and economic sectors, "underscoring the city's ability to attract capital from diverse geographical and industry backgrounds and across different wealth levels".

As inter-generational wealth transfer is actively underway, more than half of the surveyed family offices are led by second-generation or later family members.

"Hong Kong's family office ecosystem has evolved beyond simply increasing the number of family offices and is now focused on integrating family capital, businesses and next generations into the city's long-term development," said Deloitte Private Hong Kong Leader Anthony Lau Ming-young.

With more first-generation wealth holders passing assets on to their successors, the city is well positioned to serve as an optimal hub for this process, he added.

The study also highlights Hong Kong's pivotal role in asset and wealth management in Asia, with assets under management of about HK$35 trillion by the end of 2024.

Hong Kong ranked second globally in the number of ultra high-net worth individuals as of June last year, cementing its position as one of the world's top destinations for family offices.