EY supports InvestHK in issuing the “Setting up a family office in Hong Kong” guidebook — Empowering global family offices to thrive in Hong Kong

EY ¹ supports Invest Hong Kong (InvestHK), a department of the Government of the Hong Kong Special Administrative Region (“HKSAR government”) to prepare the Setting up a family office in Hong Kong guidebook (the “Guidebook”) ² and offers professional consulting services. This Guidebook has been curated to provide insight into the opportunities available for family offices in Hong Kong and its supportive ecosystem.

The Guidebook provides useful information on setting up a family office in Hong Kong, including common structures, tax regime and concessions, compliance and reporting requirements, employment and immigration matters, as well as other business considerations for family office governance, philanthropy, impact investment and opportunities from virtual assets. It also features 10 industry experts, including leaders of family offices and financial professionals with diverse backgrounds to share their market insights and experiences in business operations in Hong Kong.

Christopher Hui, GBS, JP, Secretary for Financial Services and the Treasury of the HKSAR government, mentioned in the Guidebook that location counts and Hong Kong has all it takes for family offices. As a key growth driver of the asset and wealth management industry, the family office arena is a key policy priority for the HKSAR government. The government welcomes global family offices to establish a presence in and operate from Hong Kong. He hopes that families intending to set up their family offices in Hong Kong will find the Guidebook useful and wishes them every success in establishing and operating their family offices in Hong Kong.

Family office services

Possible considerations when setting up a family office include legal, tax infrastructure and local compliance requirements, which could be addressed through seeking support from professional consultancies. Engaging family office professionals to prepare a business plan is recommended by the Guidebook at the setting-up stage for the family to determine their expectations, priorities and scope, and decide what services they need. Even the largest family offices will need to assess whether and what to outsource. Deciding between in-house and outsourcing depends on the circumstances of the family and their family office. The goal is to attain the most effective services while avoiding and mitigating operational risks.

Jason Fong, Global Head, Family Office, InvestHK, HKSAR government, stated in the Guidebook that as a one-stop family office platform, InvestHK’s dedicated FamilyOfficeHK team recognizes the importance of preserving and growing wealth across generations, which is why InvestHK offers a range of services tailored to the unique needs of each family all the way from launch to expansion and beyond. This approach is holistic and collaborative, ensuring clients receive the support and guidance they need to make informed decisions about their wealth and legacy.

The Hong Kong advantage

As a premier international financial hub and recognized wealth management center, Hong Kong offers an ideal environment with numerous unique advantages that can assist family offices to operate and grow. As the gateway to Mainland China, Hong Kong offers outstanding potential for building a lasting family legacy for business families from both the East and the West. The key advantages and strengths of Hong Kong include its position as an international financial center, optimal environment for family office operations and ability to seize unique opportunities in Greater China. 

Jasmine Lee, EY Hong Kong and Macau Managing Partner, says: “Hong Kong has long stood out as an international financial center. It is also the world’s second-largest cross-border center for wealth management on the scale of wealth under management. Offering unparalleled opportunities as the dominant gateway in and out of the Chinese mainland, Hong Kong is the best place for international families to tap into opportunities linked to the tech-centric Guangdong-Hong Kong-Macao Greater Bay Area and capture China’s growth. It has been a pleasure to join hands once again with InvestHK to attract enterprises, investments and talent to enhance Hong Kong’s competitiveness.” 

Karina Wong, EY Greater China Business Tax Services Leader, Private Tax Co-leader and Family Enterprise Leader, says: “The HKSAR government provides policy support to underscore its commitment to developing the family office sector. The eight measures set out in the Policy Statement on Developing Family Office Businesses in Hong Kong have been put into action or examination. The HKSAR government announced the launch of its philanthropy initiative to set up a repository platform for charity projects. The initiative aims to assist family offices in planning their wealth legacy, transition and promoting social good, and advancing the goal of Hong Kong becoming a global center for philanthropy. All these actions reflect the HKSAR government’s commitment to establish an ecosystem for family offices and to attract them to establish or expand operations in Hong Kong.”

Other business considerations

Family governance, philanthropy, impact investments and virtual asset investments are the other business considerations in setting-up family offices. Based on work with multigenerational families and family offices, the best structure for long-term success is a system of parallel governance focused on owner governance and business or investment governance. Philanthropic management is one of the key services provided by a family office, with the main forms of philanthropy that a family office manages evolving from traditional cheque-writing donations to social-impact investing. The latter involves investments in companies, organizations or funds with the intention of generating a social or environmental impact alongside a financial return. Environmental, social and governance (ESG) investments are focus areas of family offices in Hong Kong and business families are dedicated to making an impact through their investments. Virtual assets are alternative investments made by family offices. The HKSAR government will be open to the possibility of having Exchange Traded Funds (ETF) on virtual assets, the Guidebook states. 

Chris Chan, EY³ Greater China Strategy and Transactions Partner, says: “The HKSAR government supports these business considerations through its policymaking. The HKSAR government would also explore setting up storage, display and appreciation facilities for art at the international airport to enable global family offices with capital allocations in art to benefit from the city’s thriving art environment.”

Insight and experience sharing from thought leaders 

Industry experts share in the Guidebook the advantages of Hong Kong’s business environment, their market insights and experiences in business operations. 

Stuart Gibson, Co-Founder and Co-CEO, ESR, shared that Hong Kong with its significant international connectivity, especially to the fast-developing economies of Mainland China and the Asia-Pacific, is a highly appealing location for those looking to build and diversify investment portfolio. Hong Kong is the prime location for setting up a family office and contributes to the transformation of new economy. 

Kenneth Ho, Founder and Managing Partner, Carret Private Capital Limited, is a financial services dynamo who never seems to be short of a visionary initiative for private wealth management. He said that the multi-family office has to have access to the best service providers in the region, most of which are based in Hong Kong.

Vincent Lo, Chairman, Shui On Group, said that Hong Kong will remain the abode for his family holding. He explained that Mainland China has its own systems and ways of doing business, and Hong Kong will continue to be the “super-connector” and an efficient and effective conduit linking Mainland China with the world. 

Song, Hoi See, Founder and CEO, Plaza Premium Group, is renowned for spotting and leveraging opportunities. He pointed out that in addition to being a strategic location and a hub for regional and global business, Hong Kong offers excellent business infrastructure, transparency and efficient processes. Hong Kong is the land of opportunities.

A family’s legacy extends far beyond mere wealth. The establishment of an effective family office plays a vigorous role in preserving family’s tradition and values. Other than financial asset management, a family office also serves as a platform for fostering and upholding the legacy through robust family governance practices. In this regard, Professor Roger King, Adjunct Professor, Hong Kong University of Science and Technology, cited the three Ps or preservations: the first “P” is preservation of family wealth; the second is preservation of family harmony; and the third is preservation of the family value system, the family legacy.

The family of Chloe Suen, Vice Chairman and CEO, ASL Group, and chair of the Simon Suen Foundation, set up the Simon Suen Foundation in 2012, which has a threefold mission: to promote, preserve and advance Chinese arts and heritage. She explained that through the power of arts and culture, the foundation and family hope to inspire others, improve lives and contribute to the development of the society. For more, Hong Kong’s unique position in terms of infrastructure and cultural diversity has enabled her family to establish a global company while based here.

¹ EY member firms in Hong Kong

² Full guidebook (mainly covers the information as of November 2023): https://www.familyofficehk.gov.hk/media/ly1lxcwy/e_setting-up-family-office-booklet.pdf

³ Ernst & Young Transactions Limited

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