Territorial Source Principle of Taxation
Hong Kong adopts a territorial source principle of taxation. Generally, only profits or income arising in or derived from Hong Kong are chargeable to tax in Hong Kong. As taxes are not levied based on a person’s domicile, residence or nationality, a Hong Kong resident may derive profits from abroad without being subject to tax in Hong Kong, and a non-resident of Hong Kong may be chargeable to tax on profits arising in Hong Kong.
The question of where the profits or income arise in, or are derived from, is a practical matter of fact. Whether profits or income arise in or are derived from Hong Kong depends on the nature of the profits or income and of the transactions or activities which give rise to such profits or income. To determine the locality of profits or income, the broad guiding principle is that one looks to see what the taxpayer has done to earn the profits in question and where he has done it. The place where the day-to-day decisions are made in relation to the taxpayer’s business or activities is only one of the factors to be considered and is usually not the deciding factor.
Salaries Tax is imposed on all income arising in or derived from Hong Kong from an office, employment or pension. It is necessary to identify where the employment is located in order to decide whether income arises in or is derived from Hong Kong. Such income includes all forms of income and benefits from employment such as awards of shares or options and rental value of a place of residence provided rent-free to the employee.
Salaries Tax is calculated at progressive rates from 2% to 17% on the net chargeable income or at the standard rate of 15% of the net income (ie, without allowances), whichever is lower.
A taxpayer assessed to Salaries Tax is entitled to a basic allowance. For the 2020/2021 year of assessment, the amount of basic allowance is HKD132,000. There are other allowances that may be claimed provided that the prescribed conditions as specified in the Inland Revenue Ordinance are satisfied. These include married person’s allowance, child allowance, dependent brother or dependent sister allowance, dependent parent and dependent grandparent allowance, single parent allowance, disabled dependant allowance and personal disability allowance.
Certain deductions are allowed such as donations paid to recognised charities, expenses of self-education paid on fees in connection with certain courses of education and/or examinations, and mandatory contributions paid to a mandatory provident fund scheme.
Persons, including corporations, partnerships, trustees and bodies of persons, carrying on any trade, profession or business in Hong Kong, are chargeable to tax on all profits (excluding profits arising from the sale of capital assets) arising in or derived from Hong Kong from such trade, profession or business. To determine whether the profits arise in or are derived from Hong Kong, one would need to identify the operations which produced the relevant profits and ascertain where those operations took place. The source of profits must be attributed to the operations of the taxpayer which produced them and not to the operations of other members of the taxpayer's group. A person who carries on a business in Hong Kong but derives profits from another place is not required to pay tax in Hong Kong on those profits.
For corporations, the Profits Tax rates are 8.25% on the first HKD2,000,000 of assessable profits and 16.5% on any part of assessable profits exceeding HKD2,000,000. For unincorporated businesses, the Profits Tax rates are 7.5% on the first HKD2,000,000 of assessable profits and 15% on any part of assessable profits exceeding HKD2,000,000.
All expenses are allowed as deductions to the extent to which they have been incurred by the taxpayer in generating chargeable profits. These include, for example, interest on funds borrowed, rent of buildings or land occupied for the purpose of producing the profits, bad and doubtful debts, repairs of premises, plant, machinery or articles, etc, used in producing the profits, annual contribution to a fund under a recognised occupational retirement scheme, and donations made to recognised charities.
There are tax incentives in specific areas, such as tax concessions for gains derived from qualified debt instruments and exemption from tax for offshore funds (non-resident individuals, partnerships, trustees of trust estates or corporations) in respect of profits derived from transactions in securities, futures contracts, foreign exchange contracts, etc, in Hong Kong, which are carried out by corporations and authorised financial institutions licensed or registered under the Securities and Futures Ordinance.
Dividends received from a corporation are excluded from the assessable profits of the recipient.
The assessable value of any land or buildings situated in Hong Kong (with limited exceptions) is calculated by reference to the actual consideration payable to the owner in respect of the right of use of the property such as gross rent received or receivable and payment for the right of use of premises under licence. The net assessable value is the assessable value (after deduction of rates paid by the owner and certain other payments) less a 20% statutory allowance for repairs and outgoings. Property Tax is charged to the owner at the standard rate of 15% on the net assessable value of such land or buildings.
A corporation letting property in Hong Kong is regarded as carrying on business in Hong Kong and should be subject to Profits Tax in respect of its property income. However, if certain conditions apply, the amount of Property Tax chargeable can be set off against the amount of Profits Tax payable and any excess Property Tax paid will be refunded. Alternatively, corporations can apply for exemption from paying Property Tax which would otherwise be set off against their Profits Tax liabilities.
Stamp duty is chargeable on certain documents specified in the First Schedule to the Stamp Duty Ordinance. These documents largely relate to transactions of Hong Kong stock and immovable properties.
For the contract notes for the sale and purchase of Hong Kong stock, ad valorem stamp duty is chargeable at the rate of 0.1% of the consideration (or the market value if it is higher) for each of the buyer and the seller.
For transfers of immovable property in Hong Kong, ad valorem stamp duty either at Scale 1 rates (maximum of 15%) or Scale 2 rates (maximum of 4.25%) is chargeable based on the higher of the sale price and the market value of the property. For residential property disposed of within 36 months (if the property was acquired on or after 27 October 2012), Special Stamp Duty will be imposed in addition to the ad valorem stamp duty at regressive rates from 10% to 20% for different holding periods. Buyer’s Stamp Duty at the rate of 15% is payable on an agreement for sale or a conveyance on sale for the acquisition of any residential property executed on or after 27 October 2012 in addition to the existing ad valorem stamp duty and the Special Stamp Duty (if applicable) unless the purchaser or transferee is a Hong Kong permanent resident acquiring the property on his or her own behalf.
Certain exemptions and reliefs are available. For example, on application, transfer of Hong Kong immovable property or stock between associated companies can be exempted from stamp duty provided that they remain associated for at least two years after the transfer. Transfer of shares under stock borrowing and lending transactions may be exempted from stamp duty. Property inherited from a deceased person's estate under a will or the law of intestacy or right of survivorship by a beneficiary is exempted from stamp duty.
There is no capital gains tax, gift tax, sales tax or VAT in Hong Kong. No estate duty is payable in respect of estates of persons passing away on or after 11 February 2006.
Tax laws in Hong Kong are generally relatively stable. The more notable change which affects transfers of property was the introduction of the Special Stamp Duty and the Buyer’s Stamp Duty in the past decade. These measures were aimed to curb speculative activities in relation to residential property and to reduce the risks of a property bubble, as the private residential property market has been volatile.
To ease the financial burden and cash flow of businesses and individuals arising from COVID-19, the deadline for payment of Salaries Tax, tax under Personal Assessment and Profits Tax for the year of assessment 2018/19 has been extended. Further, the Financial Secretary has proposed a number of concessionary measures to reduce profits tax and salaries tax.
General Anti-avoidance Rules
There are general anti-avoidance provisions in the Inland Revenue Ordinance to tackle abuses of the tax laws.
Where the Inland Revenue Department is of the opinion that any transaction which reduces or would reduce the amount of tax payable by any person is artificial or fictitious or that any disposition is not in fact given effect to, he may disregard any such transaction or disposition and the person concerned shall be assessable accordingly.
The term “transaction” includes the whole of any particular transaction, and not merely part of it. Although a part of the transaction may be real, the transaction as a whole may be held as both artificial and fictitious. The Inland Revenue Department would take into consideration all the surrounding circumstances in forming an opinion as to whether a transaction as a whole is artificial or fictitious.
Where a person enters into or carries out a transaction for the sole or dominant purpose of obtaining a tax benefit, the Inland Revenue Department may disregard or reconstruct any transaction and assess the tax liability accordingly. The term “tax benefit” means the avoidance or postponement of the liability to pay tax or the reduction in the amount thereof.
Where a tax avoidance arrangement has been made to take advantage of a specific relief or exemption in such a way that is not intended by the legislature, the above general anti-avoidance rules can be applied to deny the favourable tax consequences even if the taxpayer has on the face complied with the requirements of the relevant relief or exemption.
Companies which have sustained a loss in any trade, profession or business are permitted to carry forward the amount of that loss for set-off against profits in subsequent years of assessment. An unintended effect is that profitable companies are tempted to buy companies with accumulated tax losses and transfer their profitable businesses into the loss company once their ownership has been acquired so that the losses brought forward can be set off against the profits. To tackle this avoidance practice, the Commissioner may refuse to set off losses brought forward where he is satisfied that the sole or dominant purpose of a change in shareholding was the utilisation of those losses to obtain a tax benefit.
Hong Kong has implemented automatic exchange of financial account information (AEOI) and common reporting standards.
Under the AEOI standard, financial institutions are required to identify financial accounts held by tax residents of reportable jurisdictions or held by passive non-financial entities whose controlling persons are tax residents of reportable jurisdictions in accordance with due diligence procedures and to provide the required information of such accounts to the Inland Revenue Department. To assist financial institutions to identify such accounts, account holders may be required to provide self-certifications on their personal information including tax residence.
Hong Kong signed an intergovernmental agreement with the United States in 2014 to implement the Foreign Account Tax Compliance Act in Hong Kong. It requires participating financial institutions to identify and report account information of specified US persons to the Inland Revenue Service of the United States. Accordingly, banks may need to obtain additional information or documentation from their customers to achieve this.
Hong Kong has entered into Tax Information Exchanges Agreements with seven jurisdictions, namely, Denmark, Faroes, Greenland, Iceland, Norway, Sweden and the United States.
The transfer pricing rules in Hong Kong came into operation in 2018 which are designed to comply with the guidelines put forth by the Organization of Economic Cooperation and Development (OECD) in relation to the initiatives of base erosion and profit shifting.
Where a related-party transaction bears a different result to a transaction between parties at “arm’s length”, the IRD can adjust income or losses to remove any potential advantage in relation to Hong Kong tax. Domestic transactions between domestic parties not giving rise to actual tax differences and not being made for tax avoidance purposes are not subject to the transfer pricing rules.
Companies are required to prepare transfer pricing documentation in the form of a “master file,” providing an overview of the Hong Kong entity’s group of enterprises, and a “local file,” providing transactional transfer pricing information specific to the enterprise in each jurisdiction. They should be prepared within nine months after the end of the relevant accounting period and retained for not less than seven years. Companies can be exempt from preparing these files if they meet the tests for size of business and amount of controlled transactions.
Where the consolidated group revenue of a multinational enterprise group having constituent entities or operations in two or more jurisdictions exceeds HKD6.8 billion, that group will be required to file a “Country-by-Country Report.”
Non-residents who have permanent establishments carrying on a trade, profession, or business in Hong Kong will also be subject to the transfer pricing rules. The income or loss of a non-Hong Kong resident person attributable to the person’s permanent establishment in Hong Kong will be determined as if the permanent establishment were a distinct and separate enterprise.
Succession planning for large families are usually more complex. Typically, their primary goal is to preserve the capital of the family wealth for as long as possible and therefore would tend to let family members enjoy the income only unless there is any emergency which calls for the need of capital. In many cases, older generations would encourage their younger generations to participate in the family business. However, they are usually reluctant to turn over full control of the family business to younger generations until they are starting to become less robust due to old age or sickness.
It is not common for spouses of family members to take any active role in the family business or to be able to benefit from the family wealth directly, although some large families are willing to set aside a small portion of the family wealth for the spouses who have married into the family for many years in the event that they become widowed.
Small families are more inclined to distribute the capital and income of their wealth to their children and/or grandchildren directly after they pass away and therefore require relatively simpler succession planning strategy.
Nowadays, many family members in the younger generations are tax residents of high-tax jurisdictions. As Hong Kong is a relatively low tax jurisdiction with no foreign exchange control and no forced heirship laws, there is a driving force for families to place ownership and/or control of the family wealth into the hands of a family member in Hong Kong who has no or little exposure to taxes in high-tax jurisdictions with the expectation that such family member will exercise their rights and powers over the family wealth for the benefit of all family members.
Hong Kong does not have forced heirship laws.
However, under the Inheritance (Provision for Family and Dependants) Ordinance, certain categories of persons (such as spouse, children, parents of the deceased who were being maintained by the deceased immediately before the death of the deceased) may apply to the court for an order, for example, to make periodic payments out of the net estate of the deceased to the applicant, on the ground that the disposition of the deceased’s estate effected by their will or the law relating to intestacy, or the combination of such will and that law, is not such as to make reasonable financial provision for the applicant.
Further, if a person makes a gift or disposition for which the full valuable consideration was not given (eg, a contribution to a trust) within six years before their death and such gift or disposition was made with the intention of defeating an application for financial provision against their estate, the court may on application order the recipient (eg, the trustees of a trust) to provide such sum of money or other property for the purpose of the making of that financial provision.
There is no matrimonial property regime in Hong Kong. Each spouse owns and administers the property they acquired whether before or during the marriage and they can freely transfer their property respectively, without the consent of the other spouse during the marriage.
In the unfortunate event of a divorce, division of matrimonial property will be made by the equitable distribution method by reference to common law. “Equitable” means a division of assets according to what the court deems fair under the unique situation of the parties.
Division of Assets
In deciding how matrimonial assets are to be divided, Hong Kong Courts will consider all the circumstances of a case including the factors in Section 7(1) of the Matrimonial Proceedings and Property Ordinance:
The Court of Final Appeal decision in LKW v DD  HKCFA 70 established a five-step process to guide all Family Judges on how to approach the above factors in exercising their discretion:
The Court of Final Appeal further identified the following four principles to be followed when deciding on each case:
Prenuptial and postnuptial agreements are not binding on the courts of Hong Kong. However, in the case of SA v SPH  3 HKLRD 497, the Court of Final Appeal held that the principles laid down in the UK Supreme Court decision of Radmacher v Granatino  AC 534 represents the position of the law on nuptial agreements in Hong Kong. In summary, marital agreements entered into by the parties with a full appreciation of its implication should be given effect unless it would be unfair to hold the parties to their agreement in the prevailing circumstances.
In deciding whether the division of matrimonial assets should depart from equal division, Hong Kong courts will treat the nuptial agreement as part of all the circumstances of the case under Section 7(1) of the Matrimonial Proceedings and Property Ordinance, but the weight to be attached to it in each case is subject to the Courts’ discretion.
In applying Radmacher, the court in LCYP v JEK  HKCFI 1588 agreed that where there exists an unvitiated nuptial agreement, the overriding consideration of the court is fairness. An unvitiated nuptial agreement is one of the circumstances to be considered in arriving at a fair distribution of assets. The court will have to assess its weight. In that assessment, needs and compensation would be important, whilst sharing less so. The court further proposed to approach the issue of needs with reasonableness as the guide.
As there is no capital gains tax in Hong Kong, there is no cost base adjustment on a transfer of property. However, gains on the disposal of assets may be subject to Profits Tax if such transaction amounts to trade which is a question of fact.
As there is no capital gains tax or inheritance tax in Hong Kong, there is no incentive to establish vehicles or planning mechanisms solely for the purpose of transferring assets to younger generations tax-free. However, discretionary trusts are commonly used for the purpose of family and succession planning.
Although there have been initiatives to regulate the investment and trading of virtual assets, Hong Kong has yet to put in place a framework to govern the passing of digital asset upon death for the purposes of succession.
Discretionary trusts are commonly used for succession and estate planning purposes. There is no private foundation under Hong Kong law.
Major changes were brought to the Trustee Ordinance in 2013. A few examples include imposing a statutory duty of care on trustees in relation to certain powers and functions, introducing a regime of the control over professional trustees’ exemption clauses, providing a default charging provision for professional trustees and statutory protection of Hong Kong trusts against foreign forced heirship rules.
The Perpetuities and Accumulations Ordinance was amended at the same time. Under the new rules, the rule against perpetuities is abolished and a trust may continue in existence for an unlimited period unless the terms of the trust provide to the contrary.
Trusts are recognised and respected in Hong Kong. The Trustee Ordinance is an important piece of legislation on the law governing trustees in Hong Kong. English decisions, the rules of equity and common law rules are relevant to the interpretation and application of trust laws in Hong Kong.
Hong Kong taxation adopts a territorial source principle and is not dependent on a person’s domicile, residence or nationality. Therefore, there are no tax consequences arising by virtue of a Hong Kong citizen serving as a fiduciary or being a beneficiary of a foreign trust.
The Trustee Ordinance provides that reservation of powers of investment or asset management functions by the settlor does not invalidate a trust, and a trustee who acts in accordance with the exercise of that power or function is not in breach of the trust.
Discretionary trusts are increasingly common as a tool for asset protection planning. Once assets have been contributed into a trust, they are no longer owned by the settlor and are instead held by the trustees on behalf of the beneficiaries. With an appropriate structure, it can help assets to be distanced away from future claims that may be made against or through the settlor if this is done well in advance of any threatened or perceived claims arising.
In addition, through the use of a trust, families can consolidate or maintain control over the bulk of family assets or business so as to allow family members to enjoy the family wealth (for example, by receiving income distributions) without taking titles or voting rights to any capital assets in the trust fund.
Discretionary trusts are useful for families to pass wealth and control of the family business from generation to generation. In many cases, they can also help mitigate the overall tax exposure of the family assets. Tax advice is therefore important in the setting up and administration of the trust. It is also possible to put in place detailed guidelines for the trustees as to how the trustees should position themselves in the event of a family conflict.
In a more complex structure, there may be additional bodies (such as a family office, a family council, an investment committee and a philanthropy committee) which will assist the trustee in making major decisions. These bodies may consist of family members, non-family members of the senior management of the family business and/or professional advisors.
There is no transfer tax in Hong Kong. Stamp duty may be chargeable on the transfer of Hong Kong immovable property or stock which will be calculated at the higher of the sale price and the market value, and there will be no discount for lack of marketability and control.
Private wealth disputes in Hong Kong mainly revolve around divorce, estates and trusts.
In divorce proceedings, parties make ancillary relief claims against each other in terms of maintenance pending suit, periodical payments, secured periodical payments, lump sum orders, property adjustment orders, transfer of property orders, settlement of property orders, variation of settlement and sale of property orders. Third parties’ interests may be involved in some cases, such as arguments over the beneficial ownership of assets paid by parents and a party’s entitlement in a dynastic trusts structure.
With regard to disputes over estates, they largely concern either attacks to the validity of wills by claiming that the testator lacked mental capacity or was unduly influenced by third parties while making the will, or attempts to vary distribution of the estate through claims made under the Inheritance (Provision for Family and Dependants) Ordinance or common law.
Litigation involving contentious trusts, both offshore and onshore structures, mainly arise from actions for and against trustees over breach of trusts, asset disputes, and duties or conflicts issues.
Spouses in divorce proceedings may be awarded with various forms of ancillary relief orders summarised above.
For disputes over estates or trusts, typically aggrieved parties are seeking to set aside a will, make claims under the Inheritance (Provision for Family and Dependants) Ordinance, vary a determination made by the trustee, or to obtain information (in particular financial information) of the estate or the trust. A few examples of the remedies available to address these claims are to order for the making of periodical payments or lump sums or transfer of property out of the net estate of the deceased, for the recipient or holder of the assets (eg, trustee) to provide money or other property, for information to be provided, and for assets to be traced.
Corporate fiduciaries are prevalent in Hong Kong. Generally, a trustee must exercise the care and skill that is reasonable in the circumstances, having regard to any special knowledge or experience that the trustee has or holds out as having, and if the trustee is acting in a professional capacity, the standard would be by reference to any special knowledge or experience that is reasonably expected of a person acting in a professional capacity.
Trustees are liable for the liabilities of the trust, but it is possible to limit their liabilities in the absence of a breach of trust arising from the trustees’ fraud, wilful misconduct or gross negligence by including appropriate exemption clauses in the terms of the trust.
Unless the trust instrument provides otherwise, trustees may only invest in the authorised investments specified in the Trustee Ordinance and, in exercising such power, trustees would not be responsible for any loss to the trust fund if they have discharged the statutory duty of care.
The list of authorised investments stipulated in the Trustee Ordinance that trustees may make in the absence of an express power of investment in the trust instrument is relatively conservative and limited, as the intention is to provide a default objective standard for less experienced trustees. Professional trustees may choose to opt out of the list and, generally, it is expected that professional trustees who have wide investment powers and are sophisticated in investment would adopt the modern portfolio theory which advocates diversification of securities and asset classes.
Trusts may hold active businesses and (through an entity) participate in the running of that business. Depending on the nature of the business, there may be licensing requirements in order to conduct the business or relevant activities.
Generally, a person who does not have a domicile of origin in Hong Kong can acquire a domicile in Hong Kong if he is lawfully present in Hong Kong and he intends to make a home in Hong Kong for an indefinite period.
Becoming a Permanent Resident
There are six categories of persons who are eligible to enjoy the right of abode in Hong Kong and to apply for permanent resident status. They include:
Becoming a Citizen
A person is eligible to apply for a Hong Kong passport if they are:
A person is regarded as of Chinese nationality if they are a Hong Kong resident:
To minimise the spread of COVID-19, all non-Hong Kong residents coming from overseas countries and regions by plane will be denied entry to Hong Kong, and non-Hong Kong residents coming from the Mainland, Macao and Taiwan will be denied entry to Hong Kong if they have been to any overseas countries and regions in the past 14 days. As a result, persons seeking to establish domicile, residency or citizenship in Hong Kong now may face a long delay if they are unable to come to Hong Kong physically due to current entry restrictions.
There are no expeditious means for an individual to obtain citizenship in Hong Kong. All applicants will need to fulfil the criteria of citizenship specified above.
Parents and relatives can set up a special needs trust at an affordable fee by appointing the Director of Social Welfare Incorporated as the trustee to manage their assets in the form of a trust for their children or family members who have special needs or lack self-care capability.
After the passing away of the parents or relatives, the trustee will activate the trust account and disburse funds to the carer specified by the parents or relatives in accordance with the instructions laid down in the trust deed and letter of intent. The carer will implement the long-term care plan formulated by the parents or relatives for the beneficiary. The executor of the settlor’s Will will deposit the cash derived from the settlor’s estate to the trust account. The trustee will pool together funds from different trust accounts for making investment, and allocate investment gains or losses to individual trust accounts on a pro rata basis.
Guardian for Children
Parents can appoint a guardian for their children in the event that both of them pass away while their children are under the age of 18 years. Such an appointment may be made in writing by the parents and attested by two witnesses in accordance with the provisions of the Guardianship of Minors Ordinance without the need of court proceeding.
A person appointed as the guardian of a minor has, on assuming guardianship, parental rights and authority with respect to the minor.
A person appointed by a parent (or guardian) as the guardian will automatically assume guardianship over the minor on the death of the appointing parent (or appointing guardian) if the appointing parent (or appointing guardian) has a custody order over the minor immediately before he or she dies or if the appointing parent (or appointing guardian) lived with the minor immediately before dying and the minor does not have any surviving parent or surviving guardian when the appointing parent (or appointing guardian) dies.
In other cases, the person appointed as the guardian may, after the appointing parent (or appointing guardian) dies, apply to the court to assume guardianship over the minor and the court may order the person:
On being satisfied that it is in the best interests of the minor, the court may, in its discretion, remove any guardian and appoint another person to replace that guardian.
In making any order in relation to the guardianship of a minor, the court will regard the best interests of the minor as the first and paramount consideration, and in having such regard will give due consideration to the views of the minor if, having regard to the age and understanding of the minor and to the circumstances of the case, it is practicable to do so.
Guardian of a Mentally Incapacitated Person
The guardian is appointed by the Guardianship Board and has statutory power to make decisions on accommodation and care arrangements for the mentally incapacitated person (MIP).
The Guardianship Board is a quasi-judicial tribunal consisting of a chairman with legal experience, at least three members who are barristers or solicitors, at least three members who have had experience in assessing or treating MIPs who may include registered medical practitioners or social workers, and at least three members who have had personal experiences with MIPs.
A family member, a friend or the Public Guardian may be appointed as the guardian who may have the following powers, subject to the Guardianship Order:
An assigned social worker will visit the MIP each month and the guardian will need to provide reports every month, including monthly accounts and all relevant information such as accommodation and medical treatment.
Committee of the Estate of a Mentally Incapacitated Person
The Committee of the estate of an MIP is appointed by the court and has statutory power to manage and administer the financial affairs and property of the MIP, such as bank accounts, stocks and investments, buying and selling properties, settling utility bills and tax payments.
The Mental Health Court of the High Court of Hong Kong will hear applications made by family members, the Director of Social Welfare, the Official Solicitor or the guardian for a Committee to be appointed.
Generally, the Committee will need to open a Committee bank account, prepare accounts every year or, as may be ordered by the court, inform the court about any changes in the MIP’s financial situation and general condition.
The Hong Kong Government launched the Mandatory Provident Fund (MPF) scheme in December 2000 whereby all employees and self-employed persons who are 18 to 65 years old, except for exempted persons, are mandated to join the MPF scheme. Each employee and employer are required to make regular mandatory contributions which amount to 5% of the employee’s relevant income. Employees have the right to choose among the constituent funds offered under the MPF scheme selected by their employer. Generally speaking, MPF scheme members can only withdraw their accrued benefits when they reach the age of 65 years old, but some would be allowed to do so provided specified conditions are met (eg, permanent departure from Hong Kong).
In July 2018, the HKMC Annuity Plan came into place, which allows retirees of 65 years old or above to receive guaranteed monthly annuity payments for life with the contribution of a single premium, as long as their policy remains in force.
Children Born out of Wedlock
The mother of an illegitimate child will enjoy custody rights of the child while the father can only enjoy the same with the order of the court. In other words, the illegitimate child will be automatically recognised as the child of their birth mother, but will only be treated as the child of their birth father after a court order is in place. Nonetheless, illegitimate children now enjoy the same succession rights as legitimate children if their parents die after 19 June 1993.
Generally speaking, and for the purpose of succession, adopted children are treated as the children of their adoptive parents once an adoption order is made.
Hong Kong only permits surrogacy arrangements which are non-commercial in nature. The surrogate mother is naturally regarded as the mother of the child under Section 9 of the Parent and Child Ordinance (PCO). Under Section 10(2), if the surrogate mother is married at the time of her insemination or when the embryo or the sperm and egg are placed in her, and the embryo is not brought about with the sperm of her husband, then her husband will be regarded as the father of the surrogate child, unless it is shown that he did not consent to the placing of the embryo or the sperm and egg or her insemination. Similarly, under sSection 10(3), if the surrogate mother is not married but received the treatment with her male partner and the embryo carried by her was not brought about with his sperms, then her male partner will be regarded as the father of the surrogate child.
However, the court may make a parental order under Section 12 to make the intended parents the legal parents of the surrogate child and permanently extinguish the parenthood of the surrogate mother and her spouse/male partner.
Posthumously Conceived Children
For the purpose of succession, under Section 10(6) of the Parent and Child Ordinance, where the sperm of a man is used after his death to conceive a child, or where an embryo was used after the death of the man with whose sperm the embryo was created, that man is not regarded as the father of the child.
Hong Kong does not recognise same-sex marriage, in the sense that a valid marriage in Hong Kong is heterosexual and monogamous.
However, under the Married Persons Status Ordinance, a married person’s status can apply to parties to a marriage celebrated or contracted outside Hong Kong, according to the law in force at the time and in the place where the marriage was performed. As there is no definition of “parties to a marriage”, same-sex couples appear to enjoy legal status in Hong Kong. Having said that, when it comes to divorce, nullity, judicial separation or presumption of death and dissolution of marriage, the Family Courts in Hong Kong have no authority or jurisdiction to make any order in respect of same-sex marriages.
Following the judgment of a case involving a same-sex couple in 2018, the Immigration Department revised its policy to allow a person who has entered into a same-sex civil partnership, same-sex civil union, same-sex marriage, opposite-sex civil partnership or opposite-sex civil union outside Hong Kong to apply for a dependent visa/entry permit for entry into Hong Kong, provided that all the other eligibility criteria are met, though this case did not involve any claim that same‐sex couples have a right to marry under the Hong Kong law.
Charities are exempt from tax under the Inland Revenue Ordinance, provided that certain requirements are met.
For the purpose of Profits Tax, the profits derived from any trade or business carried on by a charity are exempted if:
A donor can be granted deductions for the purposes of Personal Assessment, Salaries Tax and Profits Tax for money donated to charities.
Generally, stamp duty will not be chargeable on any conveyance of immovable property or any transfer of Hong Kong stock where such assets are donated to charities.
Any organisation wishing to seek exemption from tax as a charity will need to apply to the Inland Revenue Department to obtain the tax exemption status.
The most common types of structures used by private individuals and organisations for charitable planning are companies limited by guarantee and societies, and trusts are increasingly common.
A company limited by guarantee is quick, simple and inexpensive to set up. It is a separate legal entity and the legal liability of members are limited to the amount of their contributions. The general compliance requirements include holding annual general meetings, filing annual returns to the Companies Registry, preparing audited financial statements, etc.
A society is also quick, simple and inexpensive to set up and run, but it has no separate legal status and members are personally liable if assets are not sufficient to meet the liabilities. It is not subject to the general compliance requirements for a company mentioned above.
A trust is generally more expensive and takes more time to set up and run if it is going to be managed by a professional trustee. It may be able to afford more privacy for the founder and the assets in the trust fund. Trustees can be personally liable, although it is possible to limit their liabilities subject to the restrictions in the Trustee Ordinance.
Opportunities in an Uncertain Time
The theme that dominates the year 2020 is change and challenges in an uncertain world. At the time of writing, the world is facing the biggest public health crisis of the century, and though the battle is not over, Hong Kong demonstrated success in its fight when it was one of the earliest places to navigate all the unknowns and fears of the new coronavirus; COVID-19. This should give some confidence in Hong Kong’s resilience, even as Hong Kong faces fresh questions on its long-standing position as the bridge between China and the world, and as a city with rich traditions and characteristics of the East as well as the West.
Significant changes in Hong Kong
As with everywhere, private wealth advisors and clients have adapted to the new normal of an increasingly transparent world of FATCA and the common reporting standard, which makes robust and effective planning even more important and necessary. While this is the new normal in the world of private wealth planning, Hong Kong is confronting its own unique uncertainties but its unique role remains key and continues to evolve alongside the changes and developments of China’s economic and financial markets, while at the same time finding its place along with Mainland China in a new geo-political order of a rising China.
The past year has seen Hong Kong withstands and persists through unprecedented displays of civil protest, social division and unrest. However, the city continues to operate in strength, while the government seeks new ways to understand civil society concerns and address grassroot issues. China has now introduced the National Security Law for restoring security, peace and stability, although this has raised controversy and questions on Hong Kong’s promised autonomy, with the United Kingdom opening a new path to citizenship to 3 million Hong Kong residents who are holders of British National (Overseas) passports, including their spouses or children, and other countries voicing similar concerns and offering residency to Hong Kong people.
Jitters aside, 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.
Recent events are sobering and awaken advisers and clients to the importance of preparedness and resilience to face risks, crises and uncertainties, as well as the advantages and limitations surrounding residency. With the new reality of travel restrictions, for private clients the advantages and limitations of citizenship and residency become clear, and some may find their actual residence for extended periods up-end earlier planning.
The silver lining is that there has been an explosion of philanthropic initiatives directed towards COVID-19 relief efforts, including emergency health care responses, as well as meeting the needs of those hit hard by the difficult and unusual economic circumstances due to COVID-19. At the same time there are calls for a hard look at our society’s values and purposes and for more funding and capital to build back better post-COVID-19.
This is propelling a strong momentum for environmental, social and governance (ESG) considerations in both public and private companies and markets, and those who are proactive in impact investing and seeking positive impact in line with the United Nations Sustainable Development Goals (UNSDG). There are also increasing interest and scope for more private clients who are entrepreneurs and high-net-worth individuals/families to engage in philanthropy, either through family foundations or charitable giving, as well as engaging in impact investments.
While this is the complex and dynamic backdrop that confronts Hong Kong as it further develops as a private wealth centre, private wealth advisors and their clients would do well in seeking out the opportunities amidst the uncertainties.
Regional financial and wealth management centre
Hong Kong has always risen to challenges and found opportunities to thrive, and in this dynamic and changing environment, as private wealth advisors, opportunities can be identified for the industry and private wealth clients.
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 all offer a well-oiled operating environment for international and Chinese companies and institutions to tap cross-market opportunities relating to China as the second largest economy in the world.
A top global market
Hong Kong is home to one of the top three global markets for initial public offerings, and US-China tensions have resulted in more Chinese companies choosing to return to or list in Hong Kong. Hong Kong is also increasingly a significant centre for China and Asia venture capital and private equity activities. The strength and vibrancy of both the public and private markets have drawn financial institutions and institutional investors, while private banks and financial advisory firms including multi-family offices are increasingly drawn to Hong Kong to meet the investment needs of growing wealth in China and the region.
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. 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, furthermore, Hong Kong is domicile-neutral on the funds that may be offered in Hong Kong on a private placement basis or which may be approved for offer to the public in Hong Kong. Against this backdrop, Hong Kong continues to see many asset management or marketing offices set up here by international global fund houses and, in recent years, more 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.
Greater Bay Area
Hong Kong’s position as a key international financial centre is expected to be further consolidated under China’s Greater Bay Area plans, to leverage Hong Kong’s status as a key international financial centre and offshore Renminbi hub, and as an international asset management centre. The Hong Kong Monetary Authority, the People’s Bank of China and the Monetary Authority of Macao have jointly announced a pilot cross-border wealth management connect scheme for the Greater Bay Area of Guangdong-Hong Kong-Macau, intended to be a framework for wealth management and investment services to be available to meet the needs of residents within the Pearl River Delta region of Hong Kong, Macau and nine cities in Guangdong province, including Shenzhen.
While details of the wealth management connect scheme are uncertain and still to be issued, the potential could be immense, with the Greater Bay Area becoming a catchment area for banking and wealth management products and services to a population of more than 70 million and expected to be an economic and financial power centre with the highest density of ultra-high net worth individuals around the world.
Hong Kong as a family office hub
The Hong Kong Financial Services Development Council (FSDC) has published a policy paper in July 2020 on developing Hong Kong as a regional family office hub, leveraging on growing wealth in China and Asia, and on 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 increasingly a significant market in offering trust and wealth management services to high-net-worth and ultra-high-net worth families in the region, including from Mainland China and other countries in Asia with emerging wealth.
While Hong Kong is already home to many sophisticated finance professionals, in recent years Hong Kong has made more efforts to enhance the qualifications and expertise of its wealth management professionals. A Task Force chaired by the Hong Kong Monetary Authority (HKMA) and comprising representatives from the Private Wealth Management Association (PWMA), The Hong Kong Institute of Bankers, Hong Kong Securities and Investment Institute and Treasury Markets Association introduced an Enhanced Competency Framework (ECF), sets out an enhanced level of competency expected of relevant practitioners in the private wealth management industry and offers professional qualifications as certified private wealth, investment or trust professionals.
Although the ECF is a voluntary scheme, it reflects the efforts of the industry bodies in Hong Kong to further develop the competency and expertise of private wealth management professionals in Hong Kong, especially those who offer banking, dealing, advisory or portfolio management services to private banking customers.
Regulatory consideration of investment businesses
While there are no laws or regulations that refer specifically to family offices, the actual nature of activities may trigger certain regulatory issues, particularly where an office is carrying on business involving investing or trading in securities or futures that may amount to regulated or licensable activities.
As clarified by the SFC in its Circular on the Licensing Obligations of Family Offices issued in January 2020, single family offices may rely on the licence exemption for providing asset management services solely to related entities, which is an existing exemption for providing services to wholly-owned subsidiaries, its holding company holding all its issued shares, or the wholly-owned subsidiaries of its holding company. Multi-family offices that provide services beyond such related entities would likely be subject to licensing requirements.
Broadly speaking, the nature of the activities undertaken would determine the type of licence or categories of regulated activities that may need to be approved by the Hong Kong Securities & Futures Commission (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. However, the offering of investments or fund products may fall to be licensed for the regulated activity of “dealing in securities”, although a licensed fund manager may be exempted when offering its funds pursuant to its conduct of licensed asset management business.
It is increasingly common for managers and intermediaries to be licensed with the condition to only provide their services to “Professional Investors” – this covers institutional investors on the one hand, and on the other hand high net worth individuals or corporations that meet the relevant wealth or assets thresholds. Generally speaking, there are no registration requirements specifically for funds to be offered only on a private placement basis, unlike funds to be offered to the public in Hong Kong which 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.
Under the Securities & Futures Ordinance (SFO), Hong Kong has a private placement framework that permits limited offers in Hong Kong and allows unlimited offers to be made to “Professional Investors” as defined under the SFO. Broadly, there are three main categories of Professional Investors: Institutional Professional Investors, such as financial institutions and specific bodies as prescribed in the legislation, and Individual Professional Investors or Corporate Professional Investors that meet the relevant minimum net worth or net assets requirements (being individuals with a portfolio of at least HKD8 million, or a corporation or partnership with a portfolio of at least HKD8 million or net assets of HKD40 million).
Trust companies and trust business
Hong Kong's main trust legislation was updated in 2013, and the revised Trustee Ordinance introduced provisions to bring it more in line with the developments in other common law jurisdictions to make Hong Kong a more attractive domicile for setting up trusts.
Besides abolishing the rule against perpetuity, the validity of reserved power trusts has been clarified in statute - that a trust would not invalidated merely due to the settlor reserving any or all of the powers of investment or asset management functions under the trust, and that a trust who acts in accordance with the exercise of the power or function as reserved by the settlor is not in breach of the trust. The Trustee Ordinance also stipulates that foreign forced heirship provisions shall not affect the validity of inter vivos transfer of any movable property to a Hong Kong law trust and Hong Kong trustee, where the settlor had the capacity for the transfer under the law applicable in Hong Kong, the law of their domicile or nationality or the proper law of the transfer.
Trusts and duty of care
Under the revised Trustee Ordinance, trustees of Hong Kong law trusts are now subject to a statutory duty of care - to exercise such care and skill as is reasonable in the circumstances, having regard in particular, to any special knowledge or experience that the trustee has or claims to have, and if the trustee is acting in the course of a business or profession, to any special knowledge or experience that it is reasonable to expect of a person acting in the course of that kind of business or profession. At the same time, the legislation provides that the standard may be modified or excluded by express provision in the trust’s governing instrument. Subject to the appropriate duty of care, trustees have the power to delegate and appoint agents, and also that trustees may insure against risks and receive remuneration, including reasonable remuneration for services provided by professional trustees (even if the entitlement to remuneration is not provided under the trust instrument).
Regulation of trust companies or trust business
More trust companies are being established in Hong Kong to conduct trust services business, meaning to act as corporate trustee of multiple trusts and charge remuneration for doing so, subject to being approved as a licensed trust and corporate services provider (TCSP) as required since 2018 under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, and pursuant to which there are strict requirements on customer due diligence and record-keeping. There is no minimum capital requirement for TCSP licence, but separately, to become a registered trust company under the Trustee Ordinance and to become eligible to act as a trustee for certain trust arrangements (for example as trustee or custodian of mandatory provident fund schemes or SFC-authorised retail funds as prescribed under applicable law or regulations) or as corporate executor of a will, there is a minimum capital requirement of HKD3 million to be issued and fully paid up in cash, and HKD1.5 million must be deposited with the Government's Director of Accounting Services or a bank guarantee must be issued to the Government for the same amount. The objects of a registered trust company are limited to some or all of the statutorily prescribed objects set out in the Trustee Ordinance. The HKMA has launched a consultation to review and further enhance the regulation and supervision of trust business, particularly the conduct of trust business by banks for wealth management purposes. The consultation paper, published on 10 July 2020, contains proposals for a regulatory code on the conduct of trust business and provision of trust services, with the intention to enhance protection of client assets held on trust and better align with international standards and practices, to promote treating customers fairly and customer-centric culture in trust business. The proposed Code of Practice for Trust Business (“Code for Trust Business”) shall apply to all banks or authorised institutions under the Banking Ordinance that conduct trust business in Hong Kong, while other trustees that conduct trust business in Hong Kong are encouraged to adopt to the extent applicable.
It can be anticipated that the Code of Trust Business should serve to further promote Hong Kong as a well-regulated centre for private trusts and wealth management for the benefit of private clients. Comments on the draft Code for Trust Business are invited to be submitted by 9 November 2020.
Onshoring of trust and investment activities
The growth of trust companies in Hong Kong is seen as part of a trend of the “onshoring” of trust and investment activities. Traditionally, whether in the conduct of family-owned businesses or trust structures using offshore companies for the holding of investments or real properties, or for investment management, it has been common to use entities in jurisdictions with no tax or nominal tax, such as the British Virgin Islands or the Cayman Islands. Under the “Resumption of Application of Substantial Activities Factor to No or only Nominal Tax jurisdictions” issued by the Organisation for Economic Co-operation and Development (OECD), since 2019 the introduction of economic substance requirements in such traditional no or nominal tax jurisdictions has resulted in a review of most of the entities established in such jurisdictions, either to consider and comply with the relevant new requirements for real or adequate substance, or to adopt substance, operations or residency in an alternative, onshore, jurisdiction, depending on the location of the individuals who are directors or decision-makers, place of administration or relevant employees, office premises or set-up in any business or income-generating activities undertaken in the relevant jurisdictions.
Such "relocation" of activities or entities to an "onshore" jurisdiction continues and, as Hong Kong has a friendly tax regime and is not on the European Union’s blacklist of non-co-operative jurisdictions, it presents a viable option. It should be noted that Hong Kong operates a territorial basis of taxation, where any entity operating in Hong Kong may, in principle, be subject to tax in Hong Kong on any Hong Kong sourced income from carrying on a trade or business in Hong Kong, and the potential tax implications that may arise should be considered.
It is also worth noting that, generally, the Inland Revenue Department (IRD) may issue a "Certificate of Resident Status" (ie, a tax residency certificate) to a company that is incorporated in a no or nominal tax jurisdiction if it can be proven to the IRD’s satisfaction that the company in question is normally controlled and managed in Hong Kong. As such, the above-mentioned relevant entities incorporated in a no or nominal tax jurisdiction may become eligible for Hong Kong’s network of agreements for the avoidance of double taxation (DTAs), subject to establishing its tax residency in Hong Kong. With that, similar to Hong Kong incorporated companies, entities incorporated in a no or nominal tax jurisdiction can potentially also enjoy tax treaty benefits (eg, reduced withholding tax rates with respect to the receipt of overseas dividends, interest and royalties, as well as protection against capital gains tax in the relevant investee country), provided that the relevant conditions are satisfied.
Tax transparency and the Common Reporting Standard
Hong Kong has kept up with the latest global standards on tax transparency. It is not necessary for a country to conclude a DTA with Hong Kong before it is able to submit an exchange of information request, and Hong Kong follows the OECD Model for stand-alone tax information exchange agreements (TIEAs). In terms of scope of the exchange of information, there is no difference in substance between a TIEA and the exchange of information article in DTAs. So far Hong Kong has concluded TIEAs with seven jurisdictions, and DTAs with 43 jurisdictions.
Hong Kong has entered into a Model 2 intergovernmental agreement (IGA) in connection with the Foreign Account Tax Compliance Act (FATCA), under which financial institutions in Hong Kong are obliged to report information on their US clients and relevant transactions directly to the US Internal Revenue Service. Furthermore, in 2016 Hong Kong adopted the new international standard for the automatic exchange of financial account information in tax matters – ie, the Common Reporting Standard (CRS) promulgated by the Organisation for Economic Co-operation and Development (OECD) – and in 2017 enabled its participation in the Multilateral Convention on Mutual Administrative Assistance in Tax Matters and also amended the IRO to implement the CRS.
With tax transparency and frameworks for exchange of information well established, it is important for proper planning and advice to be sought on the tax implications of citizenships and multiple residencies, and cross-jurisdictional ownerships of businesses and assets.
Given Hong Kong’s low tax rates (15% personal income tax rate), and its vibrant business and financial markets, Hong Kong is still an attractive option for private clients who may wish to consider setting up residence here, which may be for running or expanding family business, or operating a family office for managing and investing family wealth. Broadly speaking, unless otherwise eligible or having a right of abode, an individual who has been residing in Hong Kong for a continuous period of not less than seven years may apply to become a permanent resident.
The Capital Investment Entrant Scheme (CEIS) was put in place to facilitate entry for residence in Hong Kong by persons making capital investment in Hong Kong of at least HKD10 million (the last investment threshold prior to the suspension of the scheme), and without a requirement for running a business in Hong Kong, however the CIES has been suspended by the Hong Kong Government from 15 January 2015 until further notice.
Meanwhile high-net-worth individuals may consider applying for investment as entrepreneurs, subject to meeting the requirements. The criteria to be considered by Hong Kong immigration include whether the applicant is in a position to make a substantial contribution Hong Kong's economy, with consideration factors including, but not limited to, business plan, business turnover, financial resources, investment sum, number of jobs created locally and the introduction of new technology or skills. The Immigration Department will consider whether the capital investment amount is able to support the operation of the business. An applicant who wishes to establish or join in a start-up business may also submit an application.
The Immigration Department may consider the application favourably, especially if the start-up business concerned is supported by a government-backed programme with a rigorous vetting and selection process, and the applicant is the proprietor or partner of the start-up company or a key researcher of the relevant project. Examples of government-backed programmes include:
Other programmes for residence visas in Hong Kong are the Admission Scheme for Mainland Talents and Professionals (available for Chinese residents of Mainland China who possess special skills, knowledge or experience of value to and not readily available in Hong Kong), and the Technology Talent Admission Scheme (during the three-year pilot scheme), other than general employment visa applications under the Hong Kong General Employment Policy.
In order to enhance Hong Kong’s economic competitiveness, Hong Kong has introduced the Quality Migrant Admission Scheme, targeting highly skilled or talented persons who wish to settle and work in Hong Kong, being those covered by the first Talent List of Hong Kong and who meet relevant requirements. There is also an admission scheme for the Second Generation (ASSG) of Chinese Hong Kong Permanent Residents, aimed to attract applicants who are the second generation of emigrated Chinese Hong Kong permanent residents from overseas to return to work in Hong Kong. Unlike the former employment visas, applicants of these two schemes do not need to secure an offer of local employment upon application, before they reside and work in Hong Kong.
Growth of sustainable finance and impact investments
Hong Kong offers opportunities for further growth as a centre for venture capital and private equity conducive to incubating, investing and growing start-ups in the region, is one of the largest markets for capital raising and initial public offering, and there are tremendous talents in the city as a centre for managing and investing “first generation wealth”, including to further build and expand on the family’s business empire and legacy.
There is growing emphasis on values and purpose, with research suggesting that a significant percentage of high net worth individuals today regard social impact as important, especially those under 40, and are active in considering social responsibility in their investments or impact investing. The “new generation” is also increasingly conscious in seeking out positive social or environmental impact in their business endeavours, or establishing social enterprises and/or non-profit entities targeting one or more goals of the UNSDGs.
Without a charities legislation or charities commission, the only official recognition of organisations with charitable purposes in Hong Kong is the tax exempt status granted by the IRD under Section 88 of the Inland Revenue Ordinance. In September 2019, the IRD issued an extensively updated version of its Tax Guide For Charitable Institutions and Trusts of a Public Character, which provides helpful guidance on the expected regulatory and compliance requirements of the IRD on charities from the tax perspectives. Among other updates it is noteworthy that the IRD stated for the first time that charitable organisations may engage in investment activities to further their charitable objects, although it remains to be seen how this can be applied in practice.
Hong Kong is a progressive centre that does not rest on its laurels, but continues to review and keep pace with international developments and standards. In June 2020 the SFC and the HKMA has launched the new Green and Sustainable Finance Cross-Agency Steering Group ("Steering Group") which signals an exciting milestone for more coordinated approach and actions towards ESG policy-making in Hong Kong. The Financial Services Development Council (FSDC) has also issued its paper the following month, on developing Hong Kong into Asia’s ESG Investment Hub.
Despite challenges and uncertainties, there are reasons abound for confidence that Hong Kong continues to compete and present significant opportunities and tools as a centre for private wealth management.