Investment Funds 2021

Last Updated February 09, 2021

Hong Kong

Law and Practice

Authors



Shearman & Sterling has over 850 lawyers around the world, nearly half of whom practise outside the USA, speaking more than 60 languages and practising US, English, French, German, Italian, Hong Kong, OHADA and Saudi law. The full-service Investment Funds team is led by lawyers based in Hong Kong, London, New York and Tokyo, with support from the firm’s global network of offices, advising clients across the full spectrum of investment funds, including private equity, hedge, real estate, infrastructure, growth and venture capital, credit and special situations, registered mutual (both open-end and closed-end) and UCITS funds. In addition to a deep bench and broad coverage across strategies, the firm has expertise in launching complex policy funds, leading sovereign wealth fund investments and providing advice to ambitious, growing PRC and Hong Kong-based asset managers, as well as advising on funds in other parts of Asia, including Japan, India and Singapore.

Hong Kong is a leading international financial centre known for its strategic position as a hub and gateway to Mainland China, as well as for being one of the world’s largest capital markets. Hong Kong is also a principal centre for alternative investments, ranking second in Asia after Mainland China for total capital under management by private equity funds (excluding real estate funds), which amounted to USD161 billion in 2019. The Hong Kong industry for alternative asset management is strengthened by its diversity. Long a preferred destination for global and regional investment fund managers, more than 200 managers were based in Hong Kong in 2019. For these reasons, Hong Kong is likewise an important jurisdiction for leading pension funds, insurance companies, sovereign wealth funds, family offices and other investors.

Hong Kong’s asset and wealth management business posted strong growth in 2019 despite the challenges facing global markets. For example, the asset management and fund advisory businesses in Hong Kong amounted to HKD20,040 billion as at 31 December 2019, representing a significant increase of 22% as compared to 2018. Furthermore, from September 2019 to September 2020, the number of corporations licensed in Hong Kong for Type 1 (dealing in securities), Type 4 (advising on securities) and Type 9 (asset management) regulated activities – the three types of licences most relevant to alternative asset managers – grew by 2%, 7% and 6%, respectively. Over the same period, the number of licensed representatives in Hong Kong for Type 1, 4 and 9 regulated activities slightly dropped by 3%, increased by 2% and increased by 3%, respectively.

The continued growth of the alternative asset management sector in Hong Kong also reflects Hong Kong’s important role in China’s Belt and Road Initiative (BRI), one of Chinese President Xi Jinping’s signature initiatives for global infrastructure investment. In addition, the rapid development of the Guangdong–Hong Kong–Macau Greater Bay Area (GBA) has created an additional need for private investment capital by start-ups in the innovation and technology field.

Hong Kong was well positioned heading into 2021, thanks in part to tax and legal changes initiated in the past few years by the Hong Kong authorities, including:

  • the enactment of the Limited Partnership Fund Ordinance (LPFO) on 31 August 2020, to bring Hong Kong’s limited partnership form in line with the global standard;
  • an expansion of the profit tax exemptions, to encourage the use of vehicles formed locally in Hong Kong;
  • amendments to certain codes of conduct regulating fund managers, to strengthen investor confidence in the Hong Kong private funds market; and
  • the tightening of regulation for funds investing in virtual assets, to support and promote responsible innovation.

In addition, during 2021 a legislative proposal has been introduced that provides special tax concessions for carried interest distributed by private equity funds operating in Hong Kong. Once adopted, these tax concessions should attract greater fund formation activity in Hong Kong, and further strengthen Hong Kong’s position as a jurisdiction of choice for fund managers.

With the enactment of the LPFO, the authors expect Hong Kong to be used more often by advisers and managers for the formation of fund entities. As of the end of 2020, there were around 70 limited partnership funds (LPFs) registered with the Hong Kong Company Registry.

The common structure of a private fund that has a managerial or advisory presence in Hong Kong consists of:

  • a fund entity formed as an LPF in Hong Kong;
  • a general partner (GP) formed either as a limited partnership or as a company; and
  • an investment manager or adviser licensed by the Hong Kong Securities and Futures Commission (SFC).

Core fund documents include a limited partnership agreement, subscription documents, a private placement memorandum (where applicable), side letters entered into with investors (where applicable), an investment management agreement and/or an investment advisory agreement.

Persons investing in private funds set up in Hong Kong generally will not be deemed to be taking part in the management of the business of these funds (and will therefore benefit from the safeguard of limited liability) so long as these persons act as passive, economic investors in connection with the investment. As in other leading funds jurisdictions, the LPFO sets out a non-exhaustive list of safe harbour activities that are not to be regarded as taking part in the LPF’s management, including serving on a board or committee of the LPF or the GP, acting as an agent of the LPF or the GP, advising the GP in relation to the LPF’s business, voting on any of the LPF’s proposed transactions, and taking part in certain decisions, such as the admission or removal of partners, the extension or end of the LPF’s term, the incurrence of indebtedness by the LPF, a change in the LPF’s investment scope and the exercise of the LPF’s rights in respect of an investment.

The SFC is the primary regulator of private funds and fund managers and advisers in Hong Kong. Hong Kong-based investment managers and advisers with SFC licences are subject to regulation under certain codes of conduct, including the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission (the Code) and the Fund Manager Code of Conduct (FMCC), which prescribe a set of matters that are required to be disclosed to investors. The FMCC, for example, requires disclosure of cross trades, leverage arrangements, securities lending, repo and reverse repo transactions, risk management policies, custody arrangements and so forth, which are usually contained in marketing documents, such as a term sheet or private placement memorandum.

Hong Kong is an international market with many of the same key investor types that operate in other important jurisdictions, including pension funds, insurance companies, private banks, wealth management firms, funds of funds, high net worth individuals and family offices. Some of these institutional investors are branch offices of Mainland China-based operations.

With the enactment of the LPFO, the authors expect Hong Kong to be used more often by advisers and managers for the formation of fund entities.

As described in 2.1.2 Common Process for Setting up Investment Funds, the common structure of a private fund that has a managerial or advisory presence in Hong Kong would consist of:

  • a fund entity structured as an LPF in Hong Kong;
  • a general partner structured either as a limited partnership or as a company; and
  • an investment manager or adviser licensed by the SFC.

Due to the periodic tightening of RMB capital outflows by the monetary regulators in Mainland China, investors that have to source capital from their Mainland China affiliate(s) may encounter difficulty in funding capital calls on a timely basis. In recent years, regulators in Mainland China have revisited and tightened control on inbound and outbound investments. Prior to making a private fund investment, investors would be advised to carefully review and understand the impact of these rules, updates thereto and relevant law enforcement actions. Certain investors are subject to special regulations based on their investor type.

Private funds set up in Hong Kong that have a Hong Kong-based team of investment professionals would typically retain, directly or indirectly, a Hong Kong investment manager or adviser.

The primary securities legislation in Hong Kong is the Securities and Futures Ordinance (SFO). Activities of an investment manager or adviser could, depending on the facts and circumstances, come within various categories of regulated activities under the SFO, including:

  • selling fund interests to residents in Hong Kong;
  • conducting selling activities in Hong Kong;
  • deal sourcing and execution of transactions;
  • making recommendations and advising with respect to potential deals; and
  • making investment decisions for the investment fund under management.

A Hong Kong investment manager or adviser entity, therefore, will usually be licensed under the SFC for conducting regulated activities in Hong Kong. The three types of licences that such manager or adviser is most likely to hold are Type 1 (dealing in securities), Type 4 (advising on securities) and Type 9 (asset management). Moreover, a manager registered in a jurisdiction other than Hong Kong that intends to conduct a regulated activity in Hong Kong, such as offering private fund interests to residents in Hong Kong or providing fund management or advisory services, must still comply with the private placement rule as detailed in 2.3.6 Marketing of Alternative Funds and the SFC licensing regime as detailed in 2.3 Regulatory Environment, as applicable.

The core principle behind the Hong Kong licensing regime is that applicants must demonstrate, to the satisfaction of the SFC, that these applicants are fit and proper (SFO, Section 129) to be licensed. Being fit and proper involves, broadly, being financially sound, competent, honest, reputable and reliable. To obtain an SFC licence, an applicant would need to satisfy standards relating to the competence of responsible officers and other senior management and relating also to the adequacy of financial resources.

With regard to responsible officers (ROs), an applicant must appoint at least two such ROs to be tasked with direct supervision of the conduct of each proposed regulated activity, with at least one RO being available at all times to supervise each of the proposed regulated activities and at least one RO being designated as an executive director.

In addition to ROs, any individual who carries on a regulated activity on behalf of the corporation will similarly be required to obtain a licence as a representative (LRs) accredited to such corporation. As with ROs, LR applicants must satisfy the SFC that such LR has fulfilled the fit and proper requirement and must pass a related competency test.

To register a fund as an LPF, the proposed GP must arrange for a local Hong Kong law firm or solicitor to submit an application to the Hong Kong Company Registry. In addition, the GP must appoint an independent and local auditor to perform an audit of the LPF’s annual financial statements.

Non-local service providers operating in Hong Kong are not, where permitted, subject to an additional legal registration requirement solely on account of being non-local.

As indicated in 2.3.1 Regulatory Regime for Alternative Funds, if a non-local manager engages in a regulated activity from outside Hong Kong (eg, by actively marketing its services or products to the public, whether by itself or through another person on its behalf), and such activity, if undertaken in Hong Kong, would constitute the carrying on of a business in regulated activity under the SFO, then such non-local manager should adhere to the Hong Kong licensing regime as discussed herein.

As indicated in 2.3.1 Regulatory Regime for Alternative Funds, the SFO prohibits undertaking an activity (eg, the “active marketing” of a service to the public, including through persons operating outside Hong Kong) if it would constitute a regulated activity if undertaken in Hong Kong, unless such person has obtained an appropriate licence.

SFC guidance suggests that the following factors would be considered in reaching the conclusion that this "active marketing" threshold has been crossed:

  • there is a detailed marketing plan to promote the relevant services;
  • the services are extensively advertised via marketing means such as direct mail, advertisements in local newspapers, the use of broadcasts or other "push" technology over the internet (as compared with situations where such services are only passively available; eg, on a "take it or leave it" basis);
  • the related marketing is conducted in a concerted manner and executed in accordance with a plan or schedule that indicates a continuing service rather than a one-off exercise;
  • the services are packaged to target the public of Hong Kong; eg, written in Chinese and denominated in Hong Kong dollars; and
  • the services are not sought out by the customers on such customers’ own initiative.

The SFO stipulates ten types of regulated activities, the most relevant of which for a private equity fund sponsor are Type 1 (dealing in securities), Type 4 (advising on securities) and Type 9 (asset management).

Type 1 regulated activity includes the making or offering to make an agreement with another person or inducing or attempting to induce another person to enter into an agreement for, or with the view to, acquiring or disposing of securities. If a company engages in the distribution and sale of securities, such as limited partnership interests or shares in a company, a Type 1 licence would thus be required. In addition, if a company engages in deal sourcing and the execution of private equity transactions, including negotiations with a target company, then this conduct may also constitute Type 1 regulated activity.

Type 4 regulated activity includes the giving of advice on whether to acquire or dispose of securities. If a company provides investment advice for which remuneration is received, then, unless such advisory activities are wholly incidental to Type 1 regulated activity, the company will need to apply for and obtain a Type 4 licence.

Type 9 regulated activity includes the managing of a real estate investment scheme or securities or futures contracts. If a company provides portfolio management services and exercises discretionary investment authority to make investment decisions for its clients, then the company will require a Type 9 licence.

As the profile of each private fund management team or sponsor with a managerial or advisory presence in Hong Kong may differ depending on factors such as strategy, personnel, business capabilities and operational models, many firms decide to apply for one or a combination of the Type 1, 4, or 9 licences, while some other firms instead seek to rely on an exemption from the licensing requirements. Alternatively, some firms may choose to acquire a corporation that is already licensed and, through the acquisition, conduct the desired type of regulated activity. The SFO sets out various exemptions from the licensing requirements, the most relevant of which are profiled below.

A company may not need a licence for certain regulated activities if these activities are performed in a manner that is wholly incidental to the carrying out of another regulated activity for which the company is already licensed. For example, if a company holds a Type 9 licence, then that company may rely on the incidental exemption to carry out related Type 1 and Type 4 regulated activities, provided that the preceding activities are undertaken solely for the purposes of the company’s asset management business.

A company may not need a licence for Type 4 or Type 9 regulated activity if the company provides the relevant advice or services solely to:

  • the company’s wholly owned subsidiaries;
  • the company’s holding company that holds all of the company’s issued shares; or
  • other wholly owned subsidiaries of the company’s holding company.

Offerings in Hong Kong of interests in private funds structured as partnerships or trusts (in the case of closed-end funds) are subject to regulation under the SFO. Offerings in Hong Kong of shares or debentures issued by private investment funds structured as companies (in the case of open-end funds, such as hedge funds) are subject to regulation both under the SFO and the Companies Ordinance.

Offering documents relating to securities offered to members of the Hong Kong public, whether offered by a licensed person or not, must be authorised by the SFC unless an exemption applies.

One of the most commonly used exemptions applies to offers made solely to "professional investors", within the meaning of the SFO and its relevant subsidiary legislation. "Professional investors" broadly encompasses financial institutions, insurance companies, investment companies, retirement schemes, pension plans, government entities and certain high net worth individuals and large entities. If fund interests are marketed in Hong Kong, the relevant investors should be provided with a supplemental Hong Kong investor questionnaire to confirm and document their professional investor status. It should be noted, however, that the admission by a fund of certain types of professional investors, including individuals, may cause such fund to be subject to enhanced compliance and due diligence requirements.

To the extent all Hong Kong offerees cannot meet the professional investor standard, another exemption is available under current market practices for offerings to not more than 50 offerees in Hong Kong. Although the offering documents for the types of private offers listed above are not required to comply with prospectus content requirements, they should include an appropriate securities legend to highlight that the offering documents have not been reviewed by any regulatory authority in Hong Kong and that investors are encouraged to seek independent professional advice.

As mentioned in 2.3.6 Marketing of Alternative Funds, one exemption commonly relied upon by a private fund to facilitate private placement in Hong Kong is an offering limited to "professional investors". The term "professional investor", for this purpose, is defined in the SFO and its relevant subsidiary legislation, and is broadly split into three categories:

  • institutional professional investors;
  • individual professional investors; and
  • corporate professional investors.

Institutional professional investors generally includes authorised or regulated entities, such as recognised exchange companies, recognised clearing houses, recognised exchange controllers, recognised investor compensation companies, authorised financial institutions and authorised collective investment schemes. Individual professional investors and corporate professional investors are usually determined on the basis of their asset value or portfolio size, including:

  • a trust corporation having been entrusted under one or more trusts of which it acts as a trustee with total assets of not less than HKD40 million;
  • an individual, either alone or with any of his or her associates on a joint account, having a portfolio of not less than HKD8 million;
  • a corporation or partnership having a portfolio of not less than HKD8 million or total assets of not less than HKD40 million; and
  • a corporation whose principal business is to hold investments and that is wholly owned by a professional investor under the three points above.

The SFC is the main regulator of funds and fund managers and advisers in Hong Kong. The SFC derives its investigative, remedial and disciplinary powers from the SFO and subsidiary legislation. The SFO has empowered the SFC with multiple roles. The SFC’s principal responsibilities include maintaining and promoting the fairness, efficiency, competitiveness, transparency and orderliness of the securities and futures industry. The SFC’s scope of work includes licensing and supervising persons that conduct activities under the SFC’s regulatory purview.

The SFC often publishes guidance on regulatory matters and is timely to act when dealing with pressing concerns. The SFC often consults the industry and public at large prior to enacting significant changes in regulation. In recent years, the SFC has focused on addressing irregularities in the market, developing regulatory approaches toward new, emerging asset classes such as virtual assets, strengthening oversight of fund managers and advisers, and taking account of the multi-jurisdictional nature of private equity.

The SFC, where applicable, initiates disciplinary actions against fund managers and advisers for misconduct. For example, the SFC recently reprimanded and fined an asset management company HKD6.4 million for control failures in solicitation and recommendation of investment products to clients. The SFC posts notices of enforcement actions on its website as a way of offering and providing insight into its regulatory approach and priorities. The SFC has also tightened its regulation on virtual assets and complex products in recent years, as detailed in 4.1 Recent Developments and Proposals for Reform.

Fund managers in Hong Kong have certain reporting obligations under the SFO, the Code, the FMCC and other applicable codes and guidelines. For example, licensed or registered persons are required by the SFC, on an ongoing basis, to submit records of audited accounts. Pursuant to the FMCC, fund managers may also be requested by the SFC on an ongoing basis to provide additional information to help enable the SFC to monitor systemic risk. Such information may cover matters such as fund-level leverage, the terms of securities lending and the substance and balance of other assets and liabilities. In addition, the Code requires licensed or registered persons to report to the SFC immediately following certain specified events, such as compliance breaches and the initiation of legal proceedings.

The FMCC, in particular, requires a fund manager that is responsible for overall fund operations to disclose to investors the expected maximum level of leverage that may be employed on behalf of such fund and the basis for calculating this leverage, which should be reasonable and prudent. Moreover, the FMCC provides that a fund manager should not borrow funds from a connected person on behalf of a fund, unless interest charged and fees levied in connection with the relevant loan are no higher than the prevailing commercial rate for a similar loan.

Although a breach of the Code or the FMCC should not directly cause the relevant licensed or registered persons to become subject to legal action, such a breach could reflect negatively on the fitness and propriety of the sanctioned persons and may thus create a basis for disciplinary action.

Asian private equity or venture capital funds have traditionally sought financing to bridge a funding gap, either by way of a capital call or subscription credit facility. Such facilities are useful to private equity and venture capital funds as they could access funds quickly to capitalise on investment opportunities, while waiting for capital calls from limited partners to arrive. Drawdown under a capital call facility could be arranged within as little as one business day, whereas a capital call could take ten business days or more. This firm has also seen capital call facilities being utilised to bridge the funding gap between the time in which an acquisition is completed and drawdown under a permanent asset-level financing.

If seeking to incur financing or leverage, these funds are most likely to do so by entering into capital call and subscription credit facilities from banks, including international banks with a Hong Kong presence. Capital call and subscription facilities are structured as a revolving facility with the private equity or venture capital fund as borrower. The facilities are secured by an assignment of capital call rights under the limited partnership agreement and unfunded commitments of the limited partners, together with a charge over the accounts to which capital calls are to be deposited. The facilities are not usually secured by any of the fund’s underlying investment assets.

The LPF is eligible for an exemption from Hong Kong profits tax on qualifying income, and cash contributions and distributions to and from the LPF will not incur Hong Kong stamp duty.

This topic is outside the coverage scope for this chapter.

This topic is outside the coverage scope for this chapter.

This topic is outside the coverage scope for this chapter.

This topic is outside the coverage scope for this chapter.

This topic is outside the coverage scope for this chapter.

This topic is outside the coverage scope for this chapter.

This topic is outside the coverage scope for this chapter.

This topic is outside the coverage scope for this chapter.

This topic is outside the coverage scope for this chapter.

This topic is outside the coverage scope for this chapter.

This topic is outside the coverage scope for this chapter.

This topic is outside the coverage scope for this chapter.

This topic is outside the coverage scope for this chapter.

This topic is outside the coverage scope for this chapter.

This topic is outside the coverage scope for this chapter.

This topic is outside the coverage scope for this chapter.

This topic is outside the coverage scope for this chapter.

This topic is outside the coverage scope for this chapter.

The LPFO took effect on 31 August 2020. With the advent of the LPF, fund sponsors have the ability to form a streamlined fund structure with legal domicile, business operations and management personnel all in the single jurisdiction of Hong Kong, with resulting cost and other efficiency benefits.

During the course of 2020, a task force led by the Financial Services and the Treasury Bureau (FSTB) examined and consulted with the industry at large regarding how tax concessions could be applied to carried interest distributed by private equity funds. The FSTB proposed to Hong Kong’s Legislative Council (LegCo) in January 2021 that eligible carried interest be charged at a profits tax rate of 0% and excluded from employment income for the purpose of calculating salaries tax. It is anticipated that a final rule setting forth tax concessions for carried interest will be released soon.

The authors are optimistic that the combination of Hong Kong’s favourable global position, expanding treaty network, forthcoming tax concessions and well-designed LPF bill may cause many fund sponsors to look to Hong Kong for their next generation of private funds.

Shearman & Sterling

21/F, Gloucester Tower
The Landmark, 15 Queen’s Road
Central
Hong Kong SAR

+852 2978 8000

+852 2978 8099

info@shearman.com www.shearman.com
Author Business Card

Trends and Developments


Authors



Vivien Teu & Co LLP is a Hong Kong corporate and commercial law firm with a particular focus on investment funds, asset management and financial services, securities and regulatory, tax and trusts. The firm has been highly rated for technical ability and innovation, with its lawyers having in-depth Hong Kong and international legal practice experience, combined with deep and broad knowledge of China and regional markets. The legal practice areas at Vivien Teu & Co LLP encompass providing corporate and commercial advice, as well as on securities law and financial regulatory issues in local and international transactions, and it is a go-to firm for corporate transactions and funds formation. The firm has gained a reputation of offering seamless support on cross-border Hong Kong and Mainland China matters in the areas of asset management, investment funds, cross-border securities and investments, inbound and outbound M&A, and China market entry strategies. The firm has strengthened its focus on ESG and sustainable finance in its investment funds and corporate practice areas.

Macro Trends Underlying the Hong Kong Funds Market

Hong Kong has been through a challenging period that has seen questions raised about its future. Political upheavals and uncertainties have dominated the climate and conversations, with unprecedented displays of civil protest, social division and unrest for a large part of 2019 that continued into 2020, casting a shadow even as Hong Kong has shown remarkable resilience in tackling the COVID-19 pandemic. 

Following China’s introduction of the National Security Law in July 2020 – intended for restoring security, peace and stability – calm has ensued, with muted protests under the new law’s perceived broad scope of application.  The Hong Kong government and financial regulators have emphasised that the new law is for Hong Kong’s long-term prosperity and is not intended to affect the legitimate rights and freedoms or the rule of law of its common law legal system, and reassured that there will be no change to the fundamentals of Hong Kong’s monetary and financial system or the normal conduct of business or capital market activities. 

Hong Kong’s long-standing position has been the bridge between China and the world, and it remains unique as a city with rich tradition and characteristics of the East as well as the West. With this, Hong Kong will continue to play a key role, which is further evolving alongside developments in China’s economic and financial markets, finding its place with Mainland China in a new geopolitical environment regionally and globally.

With its deep market infrastructure, highly established and liquid markets, and expertise in international finance, Hong Kong is expected to remain strategically important in China’s “opening-up” and integration with the global financial markets. Under “One Country, Two Systems”, Hong Kong’s common law legal system, unrestricted foreign exchange and capital flows, and dollar-peg currency offer a well-oiled operating environment for international and China companies and institutions to tap cross-market opportunities relating to China as the second-largest economy in the world.

Hong Kong is a top global market for IPOs, and US–China tensions have resulted in more China companies choosing to return to or list in Hong Kong. Hong Kong is also increasingly a significant centre for China and Asian venture capital and private equity activities, especially since Hong Kong revised its listing requirements in recent years to attract companies in emerging and innovative sectors, such as biotech and other technology fields. Hong Kong’s continuing strength and vibrancy in both the public and private markets will be key for financial institutions and institutional investors to operate there as a base for the region, supported by strong market infrastructure and expertise, while private banks and financial advisory firms, including multi-family offices, have, in recent years, been drawn to Hong Kong to meet the investment needs of growing wealth in China and the region that add depth and liquidity.

The Hong Kong Financial Services Development Council (FSDC) published a policy paper in July 2020 on developing Hong Kong as a regional family office hub, leveraging growing wealth in China and Asia, and Hong Kong’s mature and sophisticated financial markets infrastructure. Hong Kong’s relatively low tax rates and friendly tax framework make it an attractive location not only for income and wealth generation, but also as a centre through which wealth and assets are held and managed. Hong Kong has established itself as a successful and prominent centre for asset management and financial services and is well placed as a significant market offering trust and wealth management services to high net worth and ultra-high net worth families in the region.

Greater Bay Area

Hong Kong’s position as a key international financial centre is expected to be consolidated under China’s Greater Bay Area plans, to leverage Hong Kong’s status in this regard and as an offshore renminbi hub and international asset management centre. 

On 29 June 2020 the People’s Bank of China, the Hong Kong Monetary Authority and the Monetary Authority of Macau announced the launch of the Cross-boundary Wealth Management Connect Pilot Scheme in the Guangdong–Hong Kong–Macau Greater Bay Area (“Wealth Management Connect”), the purpose of which is to facilitate cross-boundary investment by individual residents in the Guangdong–Hong Kong–Macau Greater Bay Area (the “Greater Bay Area”).

Under Wealth Management Connect, residents in Hong Kong, Macau and nine cities in Guangdong can carry out cross-boundary investment in wealth management products distributed by banks in the Greater Bay Area. The scheme has two components, Southbound Connect and Northbound Connect, depending on the residency of the investors. Under Southbound Connect, residents of the Mainland cities in the Greater Bay Area can invest in eligible investment products distributed by banks in Hong Kong and Macau by opening designated investment accounts with these banks; whereas under Northbound Connect, residents of Hong Kong and Macau can invest in eligible wealth management products distributed by Mainland banks in the Greater Bay Area by opening designated investment accounts with these banks.

The financial regulators across the Greater Bay Area are working out implementation details – including investor eligibility, mode of investment, remittance and quota arrangements, scope of eligible investment products, investor protection, handling of disputes – under the arrangement, and the date of formal launch of Wealth Management Connect and the implementation details are still to be specified. It is anticipated that at the preliminary stage, eligible wealth management products for Southbound Connect will consist of "plain vanilla" products authorised by the Securities and Futures Commission (SFC) of Hong Kong with a low to medium risk level, while the industry expects there to be more distribution potential for a wider range of products than under the Mainland–Hong Kong Mutual Recognition of Funds scheme.

Trends in Establishing and Managing Funds in Hong Kong

Hong Kong has a well-established asset management and funds industry that has been successful under its dynamic and free markets, while global asset managers operating in Hong Kong continue to have unique opportunities due to the region’s close and strategic links to China’s growth and expansion, under various China market access schemes, such as the Mainland–Hong Kong Stock Connect and Bond Connect programmes, the Mutual Recognition of Funds (MRF) arrangements introduced in 2015 that allows qualifying retail funds managed in Hong Kong to be registered for distribution in China, and for qualifying Mainland China retail funds to be available in Hong Kong. Hong Kong has also established MRF arrangements with the United Kingdom and several European jurisdictions, further to which, Hong Kong-domiciled funds could be distributed in these markets.

Under an open architecture framework, fund managers with overseas qualifications and experience of other markets may qualify to set up as licensed managers or intermediaries in Hong Kong and Hong Kong is domicile-neutral on the funds that may be offered in Hong Kong on a private placement basis or that may be approved for offer to the public in Hong Kong. These are factors for Hong Kong to remain strong and attractive for international global fund houses to set up asset management centres or marketing offices there and, in recent years, market entrants from Mainland China and other parts of Asia. A vibrant and expanding fund management industry in Hong Kong offers growing availability of financial products and investment choices for private wealth management and close direct access to professional investment expertise in a highly regulated environment.   

Broadly speaking, the nature of the activities intended to be undertaken in Hong Kong would determine the type of licence or categories of regulated activities to be approved by the SFC, the primary regulator on the conduct of securities and futures businesses and markets in Hong Kong. A licence to conduct the regulated activity of “asset management” is required for engaging in fund management and/or investment management of portfolios investing in securities or futures contracts. On the other hand, the offering of fund products may fall to be licensed for the regulated activity of “dealing in securities”, although a licensed fund manager may be exempted in offering its funds pursuant to its conduct of licensed asset management business. For a retail fund to be offered to the public in Hong Kong, the fund would need to be separately authorised by the SFC, and the fund manager would need to be subject to further qualification requirements for managing an authorised fund.

It has become common for managers and intermediaries to be licensed initially with the condition to only provide their services to “Professional Investors” – this covers institutional investors and high net worth individuals or corporations that meet the relevant wealth or assets thresholds. As Hong Kong establishes itself as a wealth management centre, more managers and intermediaries are establishing in Hong Kong, primarily to target high net worth and ultra-high net worth clients. In January 2020, the SFC issued a circular to clarify its regulatory stance and potential licensing requirements for investment services in the context of family offices.

With the growth of the venture capital and private equity funds industry in Hong Kong in recent years, and the trend of “onshoring” funds domicile and investment management activities as discussed below, there is also growing regulatory attention on the conduct of fund management activities in private equity, and also in January 2020 in a separate circular, the SFC sought to clarify uncertainty on the applicability of licensing requirements to private equity fund managers. In its Circular to Private Equity Firms Seeking to be Licensed, the SFC noted that it will consider the composition of the investment portfolio, which may trigger licensing requirements if the underlying specific-purpose vehicles or underlying investments of the private equity fund under management fall within the definition of “securities”. The term "securities" has a broad definition under the Securities and Futures Ordinance (SFO), but the definition excludes shares or debentures of a company that is a private company within the meaning of Section 11 of the Companies Ordinance (Cap. 622). The SFC has confirmed a clear view that only shares and debentures of Hong Kong-incorporated private companies are excluded from the definition of “securities”.

As the SFC continues to review its regulatory position and licensing expectations in an evolving market, on 11 December 2020, the SFC launched a consultation on “Proposed Enhancements to the Competency Framework for Intermediaries and Individual Practitioners”, which includes proposals to raise the minimum academic qualification requirements for individuals, while a broader range of academic qualifications would be recognised, and for applicants to have more flexibility for meeting the industry qualification and regulatory examination requirements; but at the same time the SFC emphasises competence requirements for certain areas to ensure quality of work and supervision, including the management experience of applicants to be approved as responsible officers of licensed intermediaries for specific regulated activities. The SFC has proposed the implementation of the revised Competence Guidelines and CPT Guidelines at least six months after their publication and in any event no later than 31 December 2021. The consultation is open for comments for two months. Public comments are required to be submitted to the SFC by 10 February 2021.

It is, as ever, highly important to engage in a careful review of the intended fund management and investment activities to be carried out in Hong Kong to determine the licensing requirements to be complied with. In this regard, it would be necessary to consider the proposed set-up, taking into account the intended investment management and operational arrangements, the location and personnel where and by whom such activities would be conducted, and the related licensing, regulatory and tax implications.

Fund Domicile Trends – “Onshoring” 

While it has been well accepted and common practice for Hong Kong fund managers to establish private funds domiciled in an offshore jurisdiction, with Cayman Islands’ exempted company structures or segregated portfolio company structures being the most popular, Hong Kong has introduced new structures to provide viable and attractive alternatives for establishing Hong Kong-domiciled funds. These structures are supported by tax policy initiatives to encourage adoption, and more “onshore” funds are expected.

Hong Kong open-ended fund company structure

In July 2018, the legal framework was put in place for the open-ended fund company (OFC) structure with variable capital, under the amended SFO, together with the Open-ended Fund Companies Rules (as a subsidiary legislation of the SFO) (the OFC Rules) and the Code on Open-Ended Fund Companies (the OFC Code) issued by the SFC.

The OFC may be adopted for private funds or retail funds, and offers an additional choice that Hong Kong fund managers may consider in fund formation, subject to complying with the OFC Rules and the OFC Code.  Setting up an OFC is subject to obtaining the prior approval of the SFC, under a "light-touch" and one-stop process, whereas retail OFC funds are subject to the usual SFC review and approval process for authorisation of a retail fund.

In April 2019, Hong Kong introduced a unified profits tax exemption regime for funds, replacing the previous tax exemptions for offshore (non-resident) funds, by providing that exemption from Hong Kong profits tax is available for structures meeting the definition of "fund" (which mirrors the definition of "collective investment scheme" in the SFO), in respect of "qualifying transactions" and "qualifying assets", and subject to relevant conditions (that apply equally regardless of tax residency). This levels the playing field for offshore private funds and private funds structured as Hong Kong OFCs, taking away ring-fencing features considered as harmful tax practice. 

Enhanced custodian and safekeeping requirements for private OFCs

The SFC launched a consultation in December 2019 on proposed enhancements to the OFC structure, and in September 2020, the SFC released its consultation conclusions with amendments to the OFC Code with immediate effect. The SFC expanded the custodian eligibility requirements to allow intermediaries licensed or registered for the regulated activity of dealing in securities (Type 1) to act as custodians for private OFCs, subject to certain prescribed eligibility requirements, as well as enhanced certain safekeeping requirements for assets of private OFCs. At the same time, the SFC noted that a custodian must be appointed for safekeeping of assets of a private OFC regardless of the types of the assets and even where a private OFC invests in private equity and venture capital. For both public and private OFCs, the Revised OFC Code requires that the custodian must (i) have sufficient experience, expertise and competence in safekeeping the asset types in which the OFC invests; and (ii) maintain adequate internal controls and systems commensurate with the custodial risks specific to the type and nature of the assets invested. There is a six-month transition period for existing private OFC custodians to comply with the new requirements as applicable by 10 March 2021.

Relaxation of investible asset classes for private OFCs

It is also welcomed that under the enhancements introduced in September 2020, the previous “10% limit” imposed on private OFCs has been removed.  Private OFCs are now allowed to invest in all asset classes without limit on management of assets that may fall outside the definition of “securities” that may not amount to regulated activity. As noted by the SFC in the Consultation Conclusions, this is intended to place private OFCs on a level playing field with other overseas corporate fund structures as well as the recently enacted Hong Kong limited partnership fund (LPF) structure and enhance the competitiveness of the OFC structure. This will allow the OFC structure to be adopted for investments other than securities or futures, such as investments in private companies, real estate, credit or other assets not previously eligible.

Re-domiciliation of overseas corporate funds

The SFC also proposed a re-domiciliation mechanism that will allow overseas corporate funds to be re-domiciled to Hong Kong as an OFC, provided key requirements for the registration of an OFC applicable to newly formed OFCs are satisfied, such as eligibility requirements of the investment managers, custodians and directors. According to the SFC, any changes to the overseas corporate fund structure that would not affect its ability to meet the key requirements can be effected after re-domiciliation. The SFC has also considered and indicated there is no restriction on the restructuring of Hong Kong unit trusts into OFCs provided that relevant requirements for establishing an OFC are met and that such restructuring could be done in accordance with the constitutive documents of the unit trust. For SFC-authorised funds that are in unit trust form, their past performance and track records could be preserved if they were to restructure to OFCs.

Exemption from significant controllers register requirements

While Hong Kong companies are generally subject to the requirements to maintain a significant controllers register, the SFC has proposed to align the anti-money laundering and counter-terrorist financing (AML/CTF) requirements applicable to OFCs with the requirements recently implemented for the new LPF structure discussed below, requiring OFCs to appoint a responsible person to carry out AML/CTF functions. The SFC is also conducting a further consultation on the customer due diligence (CDD) requirements to be imposed on OFCs.

With the enhanced Hong Kong OFC regime, the authors believe this alternative fund structure will become more appealing to fund managers seeking to establish or offer an investment fund in Hong Kong.

Hong Kong limited partnership fund structure

While the changes outlined above may lead to the establishment of Hong Kong-domiciled private or retail funds, the OFC structure, as its name suggests, is not intended for private equity funds that are typically structured as closed-ended, although it is technically possible to adopt the OFC for a private equity fund, with relevant lock-up or redemption restrictions.

Private equity fund managers operating in Hong Kong tend to establish private equity funds structured in an offshore jurisdiction (the Cayman Islands being the most common) as LPFs (with an incorporated Cayman general partner). To further encourage fund managers to adopt Hong Kong as the domicile of choice when establishing private funds, Hong Kong has introduced a new LPF regime intended for private equity funds. 

Effective from 31 August 2020, the LPF structure may be established pursuant to the new Hong Kong Limited Partnership Fund Ordinance (LPFO). Application may be made to the Hong Kong Registrar of Companies to establish the LPF subject to the applicable requirements under the LPFO, identifying the proposed address, place of business and investment scope, the proposed general partner and proposed investment manager, as well as a proposed “Responsible Person”, which must be an authorised institution, licensed corporation, accounting person or legal professional, with responsibility to carry out AML/CTF functions for the LPF. The application to register an LPF must be submitted on behalf of the fund by a registered Hong Kong law firm or a solicitor in Hong Kong admitted to practise Hong Kong law. The LPF will be registered if the Registrar of Companies is satisfied the application contains the necessary documents and information, and the requisite application fee is paid.

As the LPF is not a separate legal person, the general partner of the LPF exercises authority and acts on behalf of the LPF. The general partner has ultimate responsibility for the management and control of the LPF and has unlimited liability for all the debts and obligations of the LPF, whereas if an authorised representative has been appointed by the general partner, the general partner and the authorised representative are jointly and severally liable and share ultimate responsibility for the LPF. A limited partner has the benefit of limited liability under the LPF, and is not liable for debts and obligations of the LPF beyond the amount of the limited partner’s agreed contribution, but this is provided the limited partner does not take part in the management of the fund. The LPFO specifically outlines certain activities or conduct that a limited partner may engage in that will not be regarded as taking part in the management of the fund, such as involving decisions around actual or potential conflict of interest, although those activities are not intended to be exhaustive circumstances through the exercise of which a limited partner may not be regarded as taking part in the management of the fund. 

Licensing requirements

Notably, unlike the Hong Kong OFC structure, the LPF is not subject to prior approval or (direct) regulation by the SFC. The LPF must have a general partner and an investment manager that meet the respective requirements, as well as a proposed “Responsible Person” as noted above. The investment manager must be a Hong Kong resident over the age of 18 years, a Hong Kong company or a non-Hong Kong company registered with the Hong Kong Companies Registry, whereas the general partner may be one of those categories of persons, or, notably, a domestic or foreign limited partnership. Where the general partner is a domestic or foreign limited partnership, the LPF must have an authorised representative that is a Hong Kong resident who is at least 18 years old, a Hong Kong company or a registered non-Hong Kong company. There is also the requirement that an independent auditor be appointed to audit the financial statements of the LPF annually.

The conduct of business in regulated activities relating to the securities and futures market is subject to potential licensing requirements by the SFC under the SFO. The SFC will consider the composition of the investment portfolio as to whether potential licensing requirements may be triggered. Persons engaged in the business of offering an LPF in Hong Kong may also be required to be licensed by the SFC, unless any relevant exemption applies. A Hong Kong manager licensed by the SFC to conduct the regulated activity of asset management may rely on an exemption to market its fund as being incidental to its conduct of asset management business.

Favourable tax framework

Under the unified profits tax exemption regime for investment funds in place since April 2019, subject to meeting specified conditions, regardless of the location of central management and control, their structure, size or investment objectives, investment funds, including private equity funds, may enjoy tax exemption for transactions in specified assets subject to meeting certain conditions. A fund may enjoy the tax exemption in connection with its investment in overseas and local private companies; as such, the new profits tax exemption provides an attractive tax framework for private equity funds to be established or managed in Hong Kong, including funds structured as LPFs.

Hong Kong is also proposing the introduction of further tax incentives to encourage private equity fund operators to establish Hong Kong LPFs and to operate in Hong Kong. At the start of January 2021, the Hong Kong Legislative Council released the legislative proposals to provide a tax concession for carried interest distributions of eligible private equity funds operating in Hong Kong, and it is intended for the concessionary tax treatment to take effect retrospectively for eligible carried interest received by, or accrued to, qualifying carried interest recipients on or after 1 April 2020.

Eligible carried interest would be zero-rated for profits tax, while 100% of eligible carried interest would be excluded from the employment income for the calculation of salaries tax, for the following proposed eligible recipients of carried interest for providing investment management services:

  • a corporation licensed under Part V of the Securities and Futures Ordinance (Cap. 571) or an authorised financial institution registered under that Part for carrying on a business in any regulated activities;
  • any other person or entity providing investment management services in Hong Kong to a certified investment fund that is a “qualified investment fund” (ie, a fund with at least five investors and meeting certain requirements over capital commitments and distribution of the net proceeds), or arranging such services to be carried out in Hong Kong; and
  • employees of the qualifying persons referred to in the two points above or their associated corporation or partnership by providing investment management services in Hong Kong to the certified investment funds on behalf of the qualifying persons.

The provision of investment management services must be provided in Hong Kong in view of the policy objective to attract more private equity funds to operate in Hong Kong. In addition, qualifying carried interest recipients must meet relevant substantial activities requirements, such as having an adequate number of qualified full-time employees and certain minimum operating expenditure incurred in Hong Kong for the relevant years of assessment. To prevent tax abuse, it is also proposed that the Hong Kong Monetary Authority will administer a certification scheme, for funds to be subject to a certification process as to whether relevant conditions on local employment and local expenditure are met to qualify for the carried interest concessionary tax treatment. 

Sustainable Finance 

The COVID-19 pandemic has sharpened the focus on the interconnectedness of the world and global readiness to respond to a system-wide crisis, and the drastic consequences for social issues. This has propelled a strong momentum for companies and the investment industry to increasingly emphasise environmental, social and governance (ESG) risks and issues. Hong Kong is also keeping up with the global trends towards green and sustainable investments and the greater emphasis on responsible corporates taking into account ESG factors.

Green or ESG funds 

In accordance with its Strategic Framework for Green Finance issued in September 2018 to facilitate the development of a wide range of green-related investments, the SFC published guidance on enhanced disclosures for SFC-authorised green or ESG funds in April 2019 in its "Circular to management companies of SFC-authorised unit trusts and mutual funds – Green or ESG funds" (the “Circular”). Pursuant to the Circular, SFC-authorised unit trusts and mutual funds that claim to be green or ESG funds must disclose how green or ESG factors are incorporated in their investment strategy and investment selection process. A list of green or ESG funds that fulfil the requirements set out in the Circular is available on the SFC’s website.

The Circular requires authorised green or ESG funds to disclose, at a minimum, the following information in their offering documents:

  • a description of the key investment focus and how it is considered green or ESG-related;
  • a description of the investment strategies adopted, which includes disclosure of the investment selection process and criteria;
  • a description of whether an exclusion policy has been adopted by the fund and types of exclusion;
  • a description of the risks associated with the green or ESG fund’s investment theme; and
  • any other information considered necessary by the manager for investors to make an informed judgement of the investment.

The manager of the green or ESG fund should regularly monitor and evaluate the underlying investments, with proper procedures in place to make sure it continues to meet the stated investment objective and requirements set out in the Circular, and is required to provide to the SFC a self-confirmation of compliance or a confirmation on compliance supported with an independent third-party certification or fund label.

Managing climate-related risks 

In October 2020, the SFC released its Consultation Paper to enhance climate-related disclosures by Hong Kong SFC-licensed fund managers. The Consultation Paper is issued in furtherance of the objectives set out in the SFC’s Strategic Framework for Green Finance, and forms part of its initiative to encourage the consideration of ESG factors in investment and risk management processes and enhance reporting of environmental and climate-related information. It takes into account the latest international developments, including growing regulatory focus on managing climate risks, the increasing adoption of the Financial Stability Board's Task Force on Climate-related Financial Disclosures (TCFD), and the SFC’s regulatory objectives and intention to align with international standards, and its aims to collaborate with international and Hong Kong financial regulators and the industry in meeting those objectives. The SFC acknowledges the importance of promoting sustainable development, but intends to focus initially on climate-related risks relevant to each investment strategy and fund due to various factors, including the irreversible impact of climate change and urgency to take action to address the threat of climate change.

Under the Consultation Paper, the SFC is proposing to amend the Fund Manager Code of Conduct (FMCC) and to issue a circular in order to introduce baseline requirements that shall apply to managers of collective investment schemes with respect to climate-related risks. The Consultation Paper refers to three main types of identified risks associated with climate change that could have an adverse impact on the value of a wide range of financial assets – physical risks, transition risks and liability risks – and outlines four key elements to address such risks:

  • governance;
  • investment management;
  • risk management; and
  • disclosure.

These elements are baseline requirements that are applicable to all fund managers. Enhanced standards are proposed for large fund managers of assets under management of HKD4 billion or above, including fund-level disclosure on weighted average carbon intensity of Scope 1 and Scope 2 greenhouse gas emissions associated with the funds’ underlying investments, on top of entity-level disclosures expected of all fund managers. The consultation period for the proposals made in the Consultation Paper ended on 15 January 2021.

Further green finance policy initiatives

More policy and regulatory initiatives with enhanced requirements on financial institutions and corporations around ESG are expected, especially with respect to climate risks. The Green and Sustainable Finance Cross-Agency Steering Group (the "Steering Group”) was set up in May 2020 and co-chaired by the SFC and the HKMA, with members comprising the Environment Bureau, the Financial Services and the Treasury Bureau, Hong Kong Exchanges and Clearing Limited, the Insurance Authority, and the Mandatory Provident Fund Authority. The aims of the Steering Group are to co-ordinate the management of climate and environmental risks to the financial sector, accelerate the growth of green and sustainable finance in Hong Kong and support the Hong Kong government’s climate strategies.  Further, in a policy address in November 2020, the Hong Kong Chief Executive pledged to achieve carbon neutrality by 2050.

In December 2020, the Steering Group announced its green and sustainable finance strategy for Hong Kong and six key focus areas in its Strategic Plan, as well as five key near-term action points. The six focus areas are:

  • strengthening climate-related financial risk management;
  • promoting the flow of climate-related information at all levels to facilitate risk management, capital allocation and investor protection;
  • enhancing capacity building for the financial services industry and raising public awareness;
  • encouraging innovation and exploring initiatives to facilitate capital flows towards green and sustainable causes;
  • capitalising on Mainland opportunities to develop Hong Kong into a green finance centre in the Greater Bay Area; and
  • strengthening regional and international collaboration.

The five near-term action points are:

  • climate-related disclosures aligned with TCFD recommendations will be mandatory across relevant sectors no later than 2025, and active steps will be taken to enhance climate-related disclosures of financial institutions – including banks, asset managers, insurance companies and pension trustees – and to increase the coverage of mandatory disclosure as soon as practicable, so that more information on how companies and assets will be impacted by climate change is available in the financial markets to support informed capital allocation and promote market discipline;
  • to aim to adopt the Common Ground Taxonomy, which will be developed by mid-2021 by the International Platform on Sustainable Finance (IPSF) Working Group on Taxonomies co-led by China and the EU;
  • to support the International Financial Reporting Standards Foundation’s proposal to establish a new Sustainability Standards Board for developing and maintaining a global, uniform set of sustainability reporting standards;
  • to promote climate-focused scenario analysis to assess the impacts on financial institutions under different climate pathways, such as through the pilot climate risk stress testing exercise for banks and insurers, and the use of scenario analysis by large asset managers; and
  • to establish a platform to act as a focal point for financial regulators, government agencies, industry stakeholders and academia to co-ordinate cross-sectoral capacity building, thought leadership and as a cross-sectoral repository of green and sustainable finance resources in addition to the Sustainable & Green Exchange (STAGE).

Considering feedback from market participants and the key near-term action points agreed to be implemented by the Steering Group, the authors anticipate that there will be stronger co-ordinated efforts to develop and maintain a uniform set of reporting standards that will facilitate effective and meaningful disclosure to generate data that is of better comparability and materiality.

Hong Kong is also expected to play a key role as China continues its strong efforts in green finance, such as under the Guangdong–Hong Kong–Macau Greater Bay Area Green Finance Alliance, including initiatives to develop an integrated carbon market.

In its paper published in July 2020, the FSDC outlined Hong Kong’s ambition to be the global ESG investment hub of Asia. With Hong Kong’s existing strength as a key international capital market and leading asset management centre – as well as the active steps that the SFC, the HKMA and other key regulators are taking in developing green finance – Hong Kong is well positioned to become a leading capital market for sustainable finance and an ESG investment hub. 

Given the rapid pace of legal and regulatory developments for Hong Kong to remain competitive as an attractive location to set up investment management business – offering more options to develop as a fund domicile with tax incentives, and staying ahead and relevant in green and sustainable finance – there is much cause for optimism and confidence that Hong Kong is building back better.

Vivien Teu & Co LLP

17th Floor
29 Wyndham Street
Central
Hong Kong

+852 2969 5300

+852 2997 3385

enquiry@vteu.co www.vteu.co
Author Business Card

Law and Practice

Authors



Shearman & Sterling has over 850 lawyers around the world, nearly half of whom practise outside the USA, speaking more than 60 languages and practising US, English, French, German, Italian, Hong Kong, OHADA and Saudi law. The full-service Investment Funds team is led by lawyers based in Hong Kong, London, New York and Tokyo, with support from the firm’s global network of offices, advising clients across the full spectrum of investment funds, including private equity, hedge, real estate, infrastructure, growth and venture capital, credit and special situations, registered mutual (both open-end and closed-end) and UCITS funds. In addition to a deep bench and broad coverage across strategies, the firm has expertise in launching complex policy funds, leading sovereign wealth fund investments and providing advice to ambitious, growing PRC and Hong Kong-based asset managers, as well as advising on funds in other parts of Asia, including Japan, India and Singapore.

Trends and Development

Authors



Vivien Teu & Co LLP is a Hong Kong corporate and commercial law firm with a particular focus on investment funds, asset management and financial services, securities and regulatory, tax and trusts. The firm has been highly rated for technical ability and innovation, with its lawyers having in-depth Hong Kong and international legal practice experience, combined with deep and broad knowledge of China and regional markets. The legal practice areas at Vivien Teu & Co LLP encompass providing corporate and commercial advice, as well as on securities law and financial regulatory issues in local and international transactions, and it is a go-to firm for corporate transactions and funds formation. The firm has gained a reputation of offering seamless support on cross-border Hong Kong and Mainland China matters in the areas of asset management, investment funds, cross-border securities and investments, inbound and outbound M&A, and China market entry strategies. The firm has strengthened its focus on ESG and sustainable finance in its investment funds and corporate practice areas.

Compare law and practice by selecting locations and topic(s)

{{searchBoxHeader}}

Select Topic(s)

loading ...
{{topic.title}}

Please select at least one chapter and one topic to use the compare functionality.