Family Offices in Hong Kong: Setup, Legal Structure and Tax Regime

Hong Kong has become one of the world’s leading bases for family offices. An independent market study commissioned by Invest Hong Kong and conducted by Deloitte estimated 3,384 single family offices operating in the city at the end of 2025, up from 2,703 two years earlier, a rise of more than 25%. Behind that growth sits a deliberate policy programme: a dedicated tax concession that can bring the profits tax rate on qualifying investment returns to 0%, an investment migration route for principals and their families, and a government team tasked with attracting family offices to the territory.

This guide sets out how a family office is structured in Hong Kong, how the tax concession for family-owned investment holding vehicles works, when a Securities and Futures Commission licence is required, and the practical steps involved in setting up. It is written for families and their advisers weighing Hong Kong against other hubs, and for those already committed and moving to implementation.

The Hong Kong government set out its approach in the Policy Statement on Developing Family Office Businesses in Hong Kong, published by the Financial Services and the Treasury Bureau in March 2023. The statement contained eight policy measures, including a dedicated profits tax concession, the revamped investment migration scheme, and a dedicated FamilyOfficeHK team within Invest Hong Kong to promote the city to overseas families.

The results have been quantified for the first time through the market study noted above. Single family offices in Hong Kong are estimated to contribute approximately HK$12.6 billion each year to the local economy through operating expenditure alone. The government has set a target of assisting more than 220 family offices to establish or expand in Hong Kong between 2026 and 2028.

For an international family, the appeal rests on familiar foundations: a common law legal system, a freely convertible currency, no capital gains tax, no withholding tax on dividends, an extensive network of double taxation agreements, and proximity to Mainland China. Slotine advises families that treat Hong Kong not only as a wealth-holding base but as a gateway for cross-border structuring across Greater China and Europe.

A single family office (SFO) serves one family. A multi family office (MFO) provides services to several unrelated families, which allows them to share the cost of investment, governance and administrative infrastructure. The distinction matters in Hong Kong because it drives the licensing analysis under the Securities and Futures Ordinance.

The licensing position is set out in more detail below. The tax concession, by contrast, is available only through an eligible single family office, so a family that wants the 0% rate will structure around an SFO.

The Inland Revenue Ordinance defines the entity that can hold family investments (the family-owned investment holding vehicle) broadly. It can be a corporation, a partnership or a trust, including a discretionary trust. That flexibility means the choice of structure is driven by governance, succession and disclosure preferences rather than by the tax concession alone.

The Inland Revenue (Amendment) (Tax Concessions for Family-owned Investment Holding Vehicles) Ordinance 2023 came into operation on 19 May 2023, with retrospective effect for years of assessment beginning on or after 1 April 2022. It provides a profits tax concession for eligible family-owned investment holding vehicles (FIHVs) managed by eligible single family offices, and for family-owned special purpose entities (FSPEs) held under an FIHV.

The standard profits tax position for comparison is a rate of 16.5% for corporations, or 8.25% on the first HK$2 million of assessable profits under the two-tiered regime. The family office concession therefore removes profits tax entirely on the qualifying investment returns that pass through the vehicle.

To qualify, the FIHV must meet all of the following at the relevant times during the year of assessment:

• Structure. It must be an entity (a corporation, partnership or trust, including a discretionary trust) that is not a business undertaking carried on for general commercial or industrial purposes.
• Ownership. At least 95% of the beneficial interest, in aggregate, must be held by members of a single family. A charitable entity may hold up to 25%, provided family members still hold at least 75% and any unrelated persons hold no more than 5%.
• Normal management or control. The FIHV must be normally managed or controlled in Hong Kong.
• Managed by an eligible SFO. It must be managed by an eligible single family office and meet the minimum asset threshold.
• Substantial activities. It must carry out its core income-generating activities in Hong Kong and meet the employee and expenditure thresholds set out below.

The single family office that manages the FIHV must itself qualify. It must be a private company that is normally managed or controlled in Hong Kong, at least 95% beneficially owned by members of the family, and it must charge for its services in a way that is taxable. It must also satisfy a safe harbour rule under which at least 75% of its assessable profits come from services provided to specified persons of the family. A single family office may manage up to 50 FIHVs under the concession.

The specified assets managed by the eligible single family office for the family’s FIHV or FIHVs must have an aggregate net asset value of at least HK$240 million at the end of the relevant basis period. A look-back to either of the two preceding years is available where the value dips below the threshold in a given year.

Specified assets are those listed in Schedule 16C to the Inland Revenue Ordinance, which include securities, shares in private companies, futures and foreign exchange contracts, deposits, certificates of deposit, exchange-traded commodities, foreign currencies and over-the-counter derivative products.

In line with international tax standards, the FIHV must have adequate substance in Hong Kong. At a minimum it must have:

• at least two full-time employees in Hong Kong who are qualified to carry out the relevant activities, and
• at least HK$2 million of operating expenditure incurred in Hong Kong on those activities.

The activities can be outsourced to the eligible single family office, provided the outsourcing is genuine and monitored, and the two-employee and HK$2 million thresholds are commensurate with the activity actually carried out.

The 0% rate applies to qualifying transactions (transactions in the Schedule 16C specified assets) and to incidental transactions. Incidental transactions are subject to a 5% threshold: the FIHV’s trading receipts from incidental transactions must not exceed 5% of its total trading receipts from qualifying and incidental transactions in the basis period. The qualifying transactions must be carried out or arranged in Hong Kong by or through the eligible single family office.

It is common for an FIHV to hold and administer its assets through family-owned special purpose entities. The concession extends to the FSPE to the extent of the FIHV’s beneficial interest in it. The concession is claimed by an election that must be made in writing, applies to all subsequent years without the need for an annual election, and is irrevocable once made.

The sequence below is the path Slotine typically walks a family through. Timeframes vary with complexity and depend on the specific mandate.

1. Decide the structure. Choose the holding vehicle and whether a trust sits above it, and confirm how the single family office will be owned and staffed.
2. Incorporate. Incorporate the company or companies with the Companies Registry and obtain business registration from the Inland Revenue Department.
3. Plan the tax position and election. Confirm FIHV and FSPE eligibility, the HK$240 million threshold and the substance plan, and prepare the written election.
4. Assess SFC licensing. Determine whether the single family office falls within the intra-group carve-out or needs a Type 9 licence.
5. Build substance and immigration. Put in place at least two qualified full-time employees and the required operating expenditure, and consider the New Capital Investment Entrant Scheme for the principals.
6. File and maintain. Complete the first profits tax return, keep the beneficial ownership records the regime requires, and maintain ongoing compliance.

A Hong Kong family office carries a manageable but real compliance load. The main recurring obligations are:

The New Capital Investment Entrant Scheme (New CIES) opened for applications on 1 March 2024 and is one of the eight measures under the 2023 policy statement. It offers a residence route for high-net-worth individuals and their dependants who invest at least HK$30 million. This is split into HK$27 million across permissible investment assets and HK$3 million placed into a dedicated investment portfolio (CIES IP) managed by the Hong Kong Investment Corporation Limited.

From 1 March 2025 the scheme was enhanced to align with the family office regime: permissible investments held by an FIHV or an FSPE managed by an applicant’s eligible single family office can count towards the applicant’s investment. This links the immigration route directly to the tax structure, so a family can co-ordinate residence and wealth-holding in a single plan.

Many families choose Hong Kong precisely because their interests span more than one jurisdiction. Hong Kong’s double taxation agreement network, its common law courts and its position alongside Mainland China make it a natural hub for families with assets and members in Greater China and Europe. Slotine advises on the interaction between the Hong Kong structure and the family’s position elsewhere, coordinating with counsel in other jurisdictions where needed.

Where a family holds foreign-source investment income through the FIHV, the interaction with Hong Kong’s foreign-sourced income exemption regime and with double taxation agreements (which may require a Hong Kong Certificate of Resident Status) can be material to the overall effective tax rate.

• Assuming the single family office is automatically outside SFC licensing. The intra-group carve-out depends on the office serving only related entities; the analysis turns on structure and activity, not on the label “single family office”.
• Underestimating the substance requirement. Two qualified full-time employees in Hong Kong and HK$2 million of operating expenditure are minimums, not targets, and must be commensurate with the activity actually carried out.
• Overlooking the irrevocable election. The concession is claimed by a written election that binds all future years and cannot be reversed, so it should be made with the full structure in view.
• Breaching the 5% incidental threshold. Trading receipts from incidental transactions above 5% of qualifying and incidental receipts fall outside the concession.
• Ignoring the private company anti-avoidance tests. Investments in private companies holding Hong Kong immovable property can lose the concession under the immovable property, holding period and control tests.