Hong Kong Welcomes Private Equity Finance Association

By ExpatBriefing.com Editorial 10 December, 2013

At its inauguration ceremony on December 5, the Financial Secretary, John C Tsang, welcomed the establishment of the Hong Kong Private Equity Finance Association as another milestone in the development of Hong Kong's financial services industry.

He noted that private equity is a key component of Hong Kong's asset management sector, and that its growth and development in recent years has been encouraging. At the end of September this year, total capital under management in private equity funds in Hong Kong accounted for about one-fifth of Asia's total, amounting to some USD100bn. In the first nine months of 2013, Hong Kong raised some USD10bn of private equity funds, which is about 30 percent of total funds raised in Asia.

"Our region has a growing number of high-net worth individuals who are keen to explore investment options beyond Asia," Tsang said. "As a global financial center in the Asian time zone with free flows of information and capital, a robust regulatory regime and a simple tax system, Hong Kong is the natural nexus to bridge this two-way flow of capital."

As he noted that Hong Kong is facing strong competition from other financial centers in the region, he emphasized that the Government is not being complacent, and has been "proactive in sharpening the city's competitive financial edge."

To attract more private equity funds to domicile in Hong Kong, in his Budget in February this year, Tsang proposed legislative amendments to introduce open-ended investment companies, and to extend the profits tax exemption for offshore funds to include transactions in private companies, which are incorporated or registered outside Hong Kong and do not hold any Hong Kong properties nor carry out any business in Hong Kong.

He confirmed that the Government is taking forward these proposals, and noted that the Financial Services Development Council included the industry's recommendations on these two initiatives in reports issued in November. The Government would also welcome ideas and suggestions from the Private Equity Finance Association on ways to further facilitate the industry's competitiveness.

A comprehensive report in our Intelligence Report series giving a country-by-country analysis of offshore investment funds, stock exchanges and trusts, with an analysis of the US QI regime, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report9.asp

Tags: Finance | Tax | Investment | Business | Private Equity | Financial Services | Investment Funds | Offshore | Hong Kong | Services | Expats |


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