Hong Kong hones in on Middle East, Indonesia to attract family offices as city steps up efforts, InvestHK says

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  • China is Hong Kong’s biggest family office market, but opportunities abound in Indonesia and the Middle East, InvestHK’s Jason Fong says
  • Hong Kong’s simple, direct and transparent tax regime is a big advantage for family offices

The Middle East and Indonesia are the next targets for Hong Kong to attract family offices, but more needs to be done to bolster the city’s status as a global family office hub, according to an executive at InvestHK, the agency in charge of attracting foreign investment.

China is undoubtedly Hong Kong’s biggest family office market, but the city has to adopt an international outlook, said Jason Fong, global head of family office at InvestHK.

There are many opportunities in Indonesia, he said, citing his recent trip to the Southeast Asian country.

“For these big Indonesian family businesses, as well as family offices, they’re familiar with Hong Kong, but surprisingly, they’re not too aware of how much knowledge and wisdom we have in the family office [space],” Fong said.

High-level visits to the Middle East last year by Chief Executive John Lee Ka-chiu, Financial Secretary Paul Chan Mo-po and Hong Kong Monetary Authority CEO Eddie Yue Wai-man were paying dividends, as more wealthy individuals were looking to set up family offices in the city, he said.

Hong Kong had more than 2,700 single-family offices at the end of last year, according to a study published by Deloitte in March.

The city is renowned for its “simple, direct and transparent” tax regime, said Fong, which introduced a slew of tax incentives for family offices in May last year.

Singapore, Hong Kong’s main rival as an Asian financial hub, has stricter rules for family offices to qualify for tax incentives, said Paul Ho, a financial services tax partner at EY.

This includes a 10 percent threshold of assets under management invested locally, whereas no such requirement in Hong Kong, he said.

Unlike the city state where single-family offices seeking tax concessions must seek approval from the Monetary Authority of Singapore first, Hong Kong has a self-assessment tax regime where the tax concessions automatically apply provided the family offices meet the minimum criteria.

Ho suggested that the government do more, such as setting up a hotline, for family offices to get in touch with the tax department to answer questions related to tax policies, noting that this will “further facilitate the process and provide more certainty”.

InvestHK’s Fong said they were exploring setting up of an art-storage facility at Hong Kong International Airport to serve as a catalyst to speed up and encourage art transactions in the city.

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Edmund Shing, PhD

Global Chief Investment Officer
BNP Paribas Wealth Management

Edmund has over 29 years of experience in financial markets in a wide variety of positions, ranging from proprietary trading to portfolio manager in a number of financial institutions in London and Paris.  He previously held the role of Global Head of Equity and Derivative Strategy at BNP Paribas in London from 2015 to 2020, and has been Chief Investment Officer at BNP Paribas Wealth Management since November 2020.

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Edmund has a PhD in Cognitive and Computing Science from the University of Birmingham in the United Kingdom, and has done advanced studies in Knowledge-Based Systems and in Experimental Psychology.  He is an EFFAS-certified financial analyst. He has also authored the book “The Idle Investor” published by Harriman House in 2015, proposing 3 simple investment strategies that take only a few minutes to execute per month.

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