Located at the heart of Asia, Hong Kong has unique cultural ties with mainland China, a robust legal system based on common law, and a diverse talent pool. These factors, amongst others, mean it has long been a preferred destination and leading hub for external investments and family offices from around the world.
To further enhance its attractiveness and competitiveness, the Hong Kong government has introduced several initiatives over the years to support external investments and global family offices.
What are the initiatives?
By introducing these initiatives, the government is hoping to attract greater external investment into Hong Kong and create a vibrant ecosystem for family offices. Some of the key initiatives announced are listed below.
Stamp duty on the transfer of residential property
In the 2024/25 Budget delivered by the financial secretary of Hong Kong, all market cooling measures for residential properties have been abolished with effect from 28 February 2024. This includes:
- Ad Valorem Stamp Duty at 7.5%
- Buyer’s Stamp Duty at 7.5%
- Special Stamp Duty.
Purchasers are now only required to pay a maximum Ad Valorem Stamp Duty of 4.25% of the higher of the consideration or market price of the property for any residential property transactions.
Stamp duty has always formed a significant proportion of property acquisitions costs. Now that the Buyer’s Stamp Duty (with targeted purchasers being non-Hong Kong permanent residents) has been removed, more foreign investors may be attracted to invest in residential properties in Hong Kong. The abolishment of the Special Stamp Duty, which targeted the reselling of residential properties within 24 months of acquisition, is also likely to stimulate the secondary property market.
Introduction of policy measures to grow family offices
In March 2023, the Hong Kong government issued the Policy Statement on Developing Family Office Businesses in Hong Kong, setting out several measures tailored to the holistic and unique needs of family offices and asset owners. Some of the measures included:
- introducing the New Capital Investment Entrant Scheme for eligible applicants with investments in Hong Kong to reside and operate in Hong Kong
- establishing the Hong Kong Academy for Wealth Legacy, which aims to continuously nurture and enlarge the talent pool serving and managing wealth in the region
- promoting art storage facilities at the Hong Kong International Airport
- facilitating measures to support philanthropic initiatives
- the passage of the bill on providing full profits tax concessions for eligible family-owned investment holding vehicles managed by single-family offices, applicable to any years of assessment on or after 1 April 2022.
Effectiveness of these efforts
Although it's still early, there are signs that the government's efforts haven't been in vain. Following the significant reduction of property stamp duties in February 2024, Hong Kong’s residential property market has experienced a noticeable increase in transaction volumes. Statistics from the Land Registry of Hong Kong reveal that the total number of transactions in 2024 reached 53,099, a substantial increase from 43,002 in 2023, reflecting a 23% growth.
Through its ongoing efforts, Hong Kong has developed into an optimal hub for family offices seeking to expand their wealth across the vibrant Asia-Pacific region. Recently the Kho family, founders of The Kho Group from the Philippines, has selected Hong Kong for their first family office. This strategic move highlights Hong Kong’s growing appeal to ultra high net worth individuals and families seeking to enhance their investment portfolios, solidifying its position as a leading global hub for asset and wealth management.
Future outlook
Due to the government’s continued commitment to stimulating external investments and supporting the expanding family office arena, the city seems to be in a strong and promising state heading into 2025.
