Asia SGE | How to Set Up a Family Office in Hong Kong – and How We Can Help

Hong Kong has solidified its position as a premier global hub for family offices. With the government actively promoting the sector through tax concessions and strategic initiatives, now is an opportune time for ultra-high-net-worth families to consider establishing a presence in this dynamic Asian financial centre.

However, the process involves complex legal, regulatory, and financial decisions. This guide outlines the key steps, and explains how our professional setup service can streamline the journey for your family.

What is a Family Office?

A family office is a private wealth management firm that serves ultra-high-net-worth families. Its primary function is to manage and preserve the family's wealth across generations. There are two main types:

• Single-Family Office (SFO): Serves one wealthy family, offering personalised services including investment management, tax and legal advice, succession planning, and even concierge services.

• Multi-Family Office (MFO): Serves multiple families, allowing them to share costs and access a broader range of services.

  
  

Why Choose Hong Kong?

Hong Kong offers unique advantages for family offices:

• Strategic Location: A gateway between East and West with unparalleled access to mainland Chinese and Asian investment opportunities.

• World-Class Financial Infrastructure: Deep capital markets, a robust banking system, and a common law legal framework.

• Government Support: Initiatives like the "Hong Kong Family Office Nexus" and attractive tax concession regimes demonstrate the government's strong commitment to the sector.

• Talent Pool: Access to a large pool of experienced professionals in finance, legal, and accounting fields.

  
  

Step-by-Step Guide of Family Office Set Up Hong Kong

Step 1: Define the Family's Vision and Objectives

Before any legal steps, the family must align on the purpose of the family office. Key questions include:

• What are the family's wealth preservation and growth goals?

• How will the family govern itself and make decisions? (e.g., a family constitution or charter)

• What are the succession plans for the next generation?

This strategic planning phase is crucial for designing a structure that meets the family's specific needs.

Step 2: Choose the Appropriate Legal Structure

The legal structure will depend on the family's objectives, asset type, and level of control desired. Common structures include:

• Private Company: The most common structure, incorporated as a private limited company under the Companies Ordinance.

• Family Investment Holding Vehicles (FIHVs): Established to hold family assets and benefit from tax concessions.

• Use of Off-Shore Structures: Many families use a combination of onshore and offshore structures, such as a trust in the BVI or Cayman Islands holding shares in the Hong Kong family office.

  
  

Step 3: Understand and Navigate the Regulatory Landscape

This is a critical step. If the family office's activities constitute "regulated activities" under the Securities and Futures Ordinance (e.g., Type 9 – asset management), it may need a license from the Securities and Futures Commission (SFC).

However, a key advantage for Single-Family Offices (SFOs) is that they are generally not required to obtain an SFC license if they are managing the wealth of a single family and do not hold themselves out as offering services to the public.

Important Note: The legal analysis can be complex. If an SFO serves non-family members or if the definition of "family" is not perfectly aligned with SFO guidelines, a licensing obligation could be triggered. This is why expert guidance is essential.

Step 4: Leverage the Tax Concession Regime

The centrepiece of Hong Kong's appeal is its tax concession regime. To qualify for a 0% profits tax on qualifying transactions, the family office must meet these criteria:

• Minimum AUM: HK$240 million.

• Family Ownership: At least 95% owned by the same single family.

• Local Spend: Minimum HK$2 million in annual operating expenses in Hong Kong.

• Local Employment: At least two full-time qualified employees.

How Our Hong Kong Family Office Setup Service Can Help

Navigating the complexities above requires time, expertise, and local knowledge. That is where we come in. We offer a comprehensive Family Office Setup Service designed to handle every detail so your family can focus on what matters most: preserving and growing your legacy.

Our service includes:

• Initial Strategic Planning: We facilitate family discussions to clarify your vision, governance preferences, and succession goals, helping you draft a family charter that reflects your unique values.

• Legal Structure & Incorporation: We advise on the most suitable legal structure (private company, trust, offshore vehicles) and handle the entire company incorporation process in Hong Kong.

• Regulatory Compliance: Our legal experts conduct a thorough analysis of your activities to confirm your SFC licensing position, ensuring you remain fully compliant while maximising the available exemptions.

• Tax Concession Application: We guide you through the eligibility criteria for the profits tax exemption and assist with the necessary documentation to secure your 0% tax rate.

• Operational Setup: From helping you recruit the required two full-time qualified employees to establishing your investment policy and risk management protocols, we ensure your office is operationally ready.

• Ongoing Professional Network: We connect you with trusted local auditors, bankers, and wealth managers to form a complete ecosystem of support.

The Future Outlook

The Hong Kong government is actively working to enhance the city's appeal, with ambitious targets to attract hundreds more family offices in the coming years. By establishing your family office now, you position yourself at the heart of Asia's wealth management revolution.

Disclaimer: The content shared is for general informational purposes only and does not constitute legal, tax, financial, or investment advice. Asia Strategic Growth Enterprises Limited makes no guarantees about accuracy or completeness. Please verify information independently and seek professional advice for your specific situation. The views and opinions expressed are for informational purposes only and do not constitute professional advice or specific recommendations. Nothing herein should be construed as a solicitation, endorsement, or recommendation regarding any course of action.