Most “fund formation” pain is not legal theory. It’s execution.

The structure looks fine on a diagram, but then:

– bank onboarding stalls,

– counterparties ask basic questions no one prepared for,

– approvals are unclear,

– records are scattered,

– and the fund becomes unmanageable as soon as it gets busy.

This is what we mean by a “bankable” structure: a fund or private investment vehicle that can be explained, evidenced, and operated cleanly year after year.

If you’re exploring a Hong Kong structure, start with our Investment Funds practice page:

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The 3 pillars of bankability

Pillar 1: A control story that makes sense (who can do what)

Banks and counterparties want to know:

– who has authority to instruct movements of money,

– who approves investments and disposals,

– what internal approvals exist (and whether they’re documented),

– how conflicts are handled.

This is governance, not “legal decoration”.

If you’re structuring a holding stack, our Corporate & Commercial practice often supports this layer:

Pillar 2: Records that exist before you need them

When onboarding or a review happens, you don’t get time to build records retroactively.

In practice you need:

– an approvals log (what was approved, when, by whom),

– an investor onboarding pack (CDD, declarations, source-of-wealth/source-of-funds support),

– clean accounting cadence (monthly/quarterly),

– audit readiness.

If regulatory mapping is relevant, our Regulatory practice can help:

Pillar 3: Asset and cash safekeeping mechanics (especially for OFCs)

If you’re using an OFC, custody and safekeeping design is central to whether the structure works.

Start with:

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The “Bankable Structure Checklist” (forwardable to clients)

1) Governance Pack

– structure chart (entities + roles)

– signatory matrix (bank + internal approvals)

– delegated authority rules (what management can do without board approval)

– conflicts policy

– template minutes / written resolutions

2) AML & onboarding narrative pack

– source-of-wealth/source-of-funds narrative that matches the structure

– supporting documents organised and consistent

– investor classification approach (where relevant)

3) Operational cadence

– monthly bookkeeping rhythm

– quarterly governance review

– annual audit timeline

– compliance calendar (filings, renewals, registers)

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Why this is where TITUS × IMSG becomes a better partner model

Many firms can draft documents.

Fewer firms help clients keep the structure clean and credible over time.

TITUS supports legal formation and operating documentation for funds:

Our sister team – IMSG supports the operating layer that keeps structures “alive”:

– company secretarial and filings,

– accounting/tax coordination,

– internal controls and reporting rhythm,

– practical readiness for banking and counterparties.

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Which vehicle is easiest to keep bankable?

It depends on facts, but broadly:

– HoldCo + SPVs: simplest operationally if governance is designed properly.

– LPF: bankable when roles/records/authority are tight.

– OFC: bankable when custodian + investment manager sequencing is done early.

If you’re choosing, start here:

 Hong Kong Funds & Private Investment Vehicles guide

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Next step: quick call with our Principal

If you want to discuss a client fact pattern or your firm’s recurring needs, we can set up a quick Zoom call with Michael Titus (Principal, TITUS): https://titus.com.hk/our-people/michael-titus/

Send 2–3 time slots to us via:
Email: info@titus.com.hk, or
Whatsapp: +852 9702 3003

—

Disclaimer: This article is for general information only and does not constitute legal advice. Specific advice should be sought for your particular circumstances.

RELATED READING

– Pillar guide: Hong Kong Funds & Private Investment Vehicles guide

– LPF guide: LPF (Limited Partnership Fund) guide

– OFC guide: OFC (Open-Ended Fund Company) guide

– DIPN 61 (plain English): DIPN 61 explained (Unified Fund Exemption)

The post How to Build a “Bankable” Hong Kong Fund or Private Investment Vehicle (AML, Records, Controls) appeared first on Titus.

“0% carried interest” is one of the most misunderstood headlines in Hong Kong funds marketing.

The reality is more nuanced:

– there is a carried interest concession regime,

– it has effective dates and conditions,

– and it’s designed to reward genuine asset management activity with real substance and governance.

If you’re considering a Hong Kong fund platform, start here:

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What is “carried interest” (plain English)?

In private equity and similar strategies, carried interest is typically the performance-linked share of profits allocated to the manager/sponsor after certain return thresholds.

This is different from:

– management fees (recurring fees for running the strategy), and

– ordinary investment returns (returns to investors).

—

The headline: 0% profits tax (but only if you qualify)

Hong Kong introduced a carried interest concession regime via legislation enacted in 2021, and the HKMA has issued guidelines on certification of funds under the relevant schedule for the carried interest tax concession.

Practical takeaway:

“0%” is not automatic. It is condition-based.

—

Why this matters for structuring

A carried interest regime affects:

– how you draft the fund’s waterfall,

– how you document “qualifying persons” and services,

– whether the operating model and governance actually match the intended regime.

This is where tax, legal documentation and operations must align.

—

Common pitfalls

Pitfall 1: assuming “LPF = 0% carry”

Vehicle choice alone is not the full analysis. The operating and qualifying conditions matter.

Pitfall 2: substance is treated as an afterthought

If you’re building a Hong Kong platform, operational substance and governance hygiene are not optional.

Pitfall 3: documents don’t match reality

If your waterfall, employment arrangements, approvals and reporting don’t align, you create avoidable risk.

This is also why we stress bankable structures and clean controls:

 How to build a “bankable” Hong Kong fund (AML, records, controls)

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How TITUS + IMSG helps clients implement this properly

TITUS supports:

– structuring and documentation (including carry/waterfall mechanics),

– fund formation and operating agreements,

– regulatory mapping where required.

Our sister team – IMSG supports:

– operational setup and maintenance,

– governance cadence,

– accounting/tax coordination and record hygiene.

If you want to explore whether this is relevant to your strategy, start here:

—

Next step: quick call with our Principal

If you want to discuss a client fact pattern or your firm’s recurring needs, we can set up a quick Zoom call with Michael Titus (Principal, TITUS): https://titus.com.hk/our-people/michael-titus/

Send 2–3 time slots to us via:
Email: info@titus.com.hk, or
Whatsapp: +852 9702 3003

—

Disclaimer: This article is for general information only and does not constitute legal advice. Specific advice should be sought for your particular circumstances.

RELATED READING

– Pillar guide: Hong Kong Funds & Private Investment Vehicles guide

– DIPN 61 (plain English): DIPN 61 explained (Unified Fund Exemption)

– LPF guide: LPF (Limited Partnership Fund) guide

– Bankable structures playbook: How to build a “bankable” Hong Kong fund (AML, records, controls)

The post Hong Kong Carried Interest Tax Concession: When “0% Profits Tax” Applies (and What You Must Get Right) appeared first on Titus.

DIPN 61 is the Inland Revenue Department’s “Departmental Interpretation and Practice Note” explaining how it interprets and applies Hong Kong’s profits tax exemption for funds (often called the “unified fund exemption”).

If you are advising a fund manager or a private capital group operating in Hong Kong, this note matters—not because it guarantees an outcome, but because it signals how the IRD views key concepts and conditions.

If you want help applying this to a specific structure, start here:

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What DIPN 61 is (and what it isn’t)

DIPN 61 is:

– IRD guidance on interpretation and application of the funds profits tax exemption regime.

DIPN 61 is not:

– a blanket promise that “funds pay zero tax”,

– a substitute for analysing facts, activities, and structure design.

—

Why people search “DIPN 61” in the first place

Typically, the question behind the search is:

“Can my fund (or private investment platform) operate in Hong Kong without creating unexpected profits tax exposure?”

In practice, the answer depends on:

– whether you meet the definition of “fund” for the relevant provisions,

– the nature of transactions,

– who carries out or arranges transactions,

– how the structure is operated in real life.

—

Three common misconceptions

Misconception 1: “If it’s a fund, it’s automatically exempt”

Not necessarily. The regime is condition-based and fact-driven.

Misconception 2: “Domicile solves everything”

DIPN 61 makes clear the regime is intended to cover privately offered funds operating in Hong Kong, whether domiciled inside or outside Hong Kong—subject to conditions. Domicile is not the only variable.

Misconception 3: “We’ll deal with tax after launch”

This is where problems start. If documents, operations and governance don’t match, you create unnecessary risk.

That’s also why we push “bankable structure” thinking early:

 How to build a “bankable” Hong Kong fund (AML, records, controls)

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Practical takeaway: how to use DIPN 61 in real structuring work

We typically use DIPN 61 as part of a larger “design pack”:

– define whether the structure is truly operating as a fund,

– map how transactions are sourced, executed and documented,

– ensure agreements reflect actual operations,

– design governance and record-keeping so you can evidence reality.

If you’re still choosing between LPF vs OFC vs a holding/SPV stack, read:

 Hong Kong Funds & Private Investment Vehicles guide

—

Next step: quick call with our Principal

If you want to discuss a client fact pattern or your firm’s recurring needs, we can set up a quick Zoom call with Michael Titus (Principal, TITUS): https://titus.com.hk/our-people/michael-titus/

Send 2–3 time slots to us via:
Email: info@titus.com.hk, or
Whatsapp: +852 9702 3003

—

Disclaimer: This article is for general information only and does not constitute legal advice. Specific advice should be sought for your particular circumstances.

RELATED READING

– Investment Funds practice: Investment Funds practice page

– LPF guide: LPF (Limited Partnership Fund) guide

– OFC guide: OFC (Open-Ended Fund Company) guide

The post DIPN 61 Explained (Plain English): Hong Kong’s Profits Tax Exemption for Funds (“Unified Fund Exemption”) appeared first on Titus.

An OFC is often described as Hong Kong’s “corporate-style” fund vehicle. That’s true—but it’s also the reason OFCs require more upfront sequencing than many clients expect.

For private OFCs, two topics decide whether your structure works in real life:

1) investment manager setup, and

2) custody/safekeeping design.

If you’re still choosing between LPF vs OFC vs a holding/SPV stack, start here:

Hong Kong Funds & Private Investment Vehicles guide

—

What is an OFC (in plain English)?

An OFC is a fund vehicle in corporate form that can be set up as:

– a single OFC, or

– an umbrella OFC with sub-funds (ring-fenced compartments).

It’s often used when corporate governance optics, share-based ownership, or umbrella/sub-fund structuring are desirable.

—

The investment manager issue (plan early)

For OFCs, the investment manager setup is not an afterthought.

The SFC’s OFC Code notes that an OFC is required to have an investment manager and that the investment manager is required to be licensed/registered for Type 9 regulated activity. 

If you need help mapping this in practical terms, our Regulatory practice can help:

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Custodian requirements: what “safekeeping” really means

A custodian is mandatory and must be approved by the SFC is required for setting up the OFC pursuant to the SFC’s OFC Code. For private OFCs, the SFC’s OFC Code includes an appendix setting out “Requirements for safekeeping of private OFC scheme property”, and notes that custodians of private OFCs should comply with those requirements.

In practice, “custody” affects:

– which asset types you can hold cleanly,

– how cash movements are controlled,

– what audit trail exists,

– whether banking and counterparties view the structure as credible.

If your custodian choice does not match the asset strategy, OFC implementation becomes painful.

—

Practical compliance design (what you should build before launch)

We recommend designing these upfront:

1) Operating procedures

– subscriptions/redemptions (even private vehicles need clean mechanics)

– valuation cadence and method (especially for illiquid assets)

– dealing day rules (if any)

– conflicts policy and approvals

2) Governance pack

– board approvals matrix

– signatory matrix (bank instructions + internal controls)

– minutes/resolutions templates

– reporting cadence and escalation rules

3) Record-keeping and audit trail

If you can’t evidence decisions and money movement cleanly, you get friction:

– with banks,

– with auditors,

– with investors (even “friendly” ones),

– and in disputes.

This is exactly why “bankable structure” thinking matters:

 How to build a “bankable” Hong Kong fund (AML, records, controls)

—

OFC vs LPF: which is typically simpler?

– LPF is usually simpler for closed-end private funds with partnership economics:

– OFC can be compelling where corporate form, umbrella/sub-fund structure, or share mechanics are important—assuming you can sequence the investment manager and custodian properly.

—

Common pitfalls we see (and how to avoid them)

Pitfall 1: “We’ll decide the custodian later”

This usually backfires. Custody drives operations, documentation, audit trail and bank narrative. Most importantly, the SFC requires every OFC to appoint a custodian.

Pitfall 2: mismatched documents vs reality

Offering docs say one thing. The operating team does another. That gap is where problems start.

Pitfall 3: treating OFC like a normal company

An OFC is a fund vehicle; it requires fund-grade operational hygiene.

—

How TITUS + IMSG supports private OFCs

TITUS supports fund formation and operating documentation, including:

– investment management/advisory arrangements

– administration arrangements

– custody arrangements

– fund-related corporate transactions

(See our Investment Funds practice page: https://titus.com.hk/investment-funds/)

Our sister team – IMSG supports ongoing operational running:

– company secretarial + filings

– accounting/tax coordination

– reporting cadence and record hygiene

– practical “bankability” support

—

Next step: quick call with our Principal

If you want to discuss a client fact pattern or your firm’s recurring needs, we can set up a quick Zoom call with Michael Titus (Principal, TITUS): https://titus.com.hk/our-people/michael-titus/

Send 2–3 time slots to us via:
Email: info@titus.com.hk, or
Whatsapp: +852 9702 3003

—

Disclaimer: This article is for general information only and does not constitute legal advice. Specific advice should be sought for your particular circumstances.

RELATED READING

– Pillar guide: Hong Kong Funds & Private Investment Vehicles guide

– LPF guide: LPF (Limited Partnership Fund) guide

– DIPN 61 (plain English): DIPN 61 explained (Unified Fund Exemption)

– Bankable structures playbook: How to build a “bankable” Hong Kong fund (AML, records, controls)

The post The Open-Ended Fund Company (OFC) in Hong Kong: Custodian Requirements & Ongoing Compliance (Private OFCs) appeared first on Titus.

If you’re advising a family, founder, or private capital group with Asia exposure, “just set up an entity” is rarely the hard part. The hard part is building a structure that is:

• legally coherent,
• operationally clean, and
• explainable to banks and counterparties.

This guide is a practical overview of the most common Hong Kong options—how to choose between them, and where deals typically go wrong. If you want to speak to our team about a specific fact pattern, start with our Investment Funds practice page here: Investment Funds practice page

The quick map: LPF vs OFC vs HoldCo + SPVs

Option 1: Holding company + SPVs (the “private investment platform” for most families)

Best when you want a straightforward private investment vehicle to hold assets (portfolio investments, operating companies, property SPVs, co-invest positions) without running a fund-style subscription/redemption model.

Typical characteristics:

– one HK holding company (or a small stack),

– SPVs per asset or strategy,

– governance rules (approvals, signatories, reporting cadence) designed upfront.

Option 2: LPF (Limited Partnership Fund) — private fund-style wrapper

Best when the vehicle behaves like a private fund:

– pooled capital,

– multiple investors (even a small “club”),

– private equity / venture / credit-style economics,

– partnership governance and distribution mechanics.

Read our full LPF guide:

Option 3: OFC (Open-ended Fund Company) — corporate fund wrapper

Best when you want a corporate form fund structure, often with:

– share issuance/redemption mechanics,

– umbrella/sub-fund thinking,

– a compliance design that is closer to institutional fund governance.

Read our full OFC guide:

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“Why Hong Kong?” — reasons advisers can use without sounding like a brochure

Hong Kong remains a practical Asia hub for private capital structures because it combines:

– a mature legal and professional ecosystem,

– common-law familiarity (helpful for international advisers),

– proximity to Asia capital and banking infrastructure, and

– a growing set of fund-related regimes and guidance.

From a legal-services perspective, the biggest “why” is still execution: if the structure needs to operate with Asia banking, Asia counterparties, and multi-jurisdictional family governance, Hong Kong is often a workable centre of gravity.

(If you’re comparing Hong Kong structures or you’re setting up a fund platform, our team can help you scope the right path here: https://titus.com.hk/investment-funds/)

—

The five questions that decide the structure (90% of the time)

1) Is it really a “fund” — or just a private holding platform?

If investors pool money and a manager runs the strategy, you’re in fund logic. If it’s a family/founder investment platform, a HoldCo/SPV stack may be cleaner.

2) Do you need subscriptions/redemptions (open-ended behaviour)?

If yes, OFC becomes more relevant. If no (closed-end), LPF or HoldCo/SPVs are often more natural.

3) How many investors are there (and how sophisticated)?

A family-only vehicle often prioritises operational simplicity. A club/co-invest vehicle often benefits from LPF mechanics and clearer partner rights.

4) What does the bank need to see?

If your structure can’t be explained and evidenced, onboarding stalls. That’s why “bankability” is not a footnote.

(We cover this in detail here: /bankable-hong-kong-fund-structures-aml-controls/)

5) Are you aiming for any Hong Kong fund tax regimes?

If your vehicle is truly operating as a “fund” and meets the relevant conditions, Hong Kong’s profits tax exemption guidance becomes relevant. Start with our plain-English note:

 /dipn-61-hong-kong-profits-tax-exemption-for-funds/

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Typical timelines (realistic planning)

Every case differs, but these are the planning ranges we see most often:

– HoldCo + SPVs: usually fastest legally; banking and operational setup often drives the real timeline.

– LPF: manageable once key roles are lined up and the LPA terms are clear.

– OFC: more sequencing-heavy; custodian and investment manager decisions should be made early.

—

Common pitfalls (and how to avoid them)

Pitfall 1: building a “paper structure” that doesn’t match real life

If actual control is different from what documents say, problems appear in banking, audits, disputes, and exits.

Pitfall 2: choosing the vehicle before defining governance

The structure should follow the governance plan (who approves what, who can sign, what reporting is required).

Pitfall 3: ignoring the operational layer

Entity maintenance, accounting/tax coordination, record-keeping, and approval logs are what keep the structure alive.

Our Corporate & Commercial practice often supports the “holding and governance” side of these projects:

Our Regulatory practice supports compliance and risk mapping when the facts require it:

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How TITUS typically supports these structures (the “HK desk” model)

TITUS supports legal design and implementation:

– vehicle selection (LPF vs OFC vs SPVs),

– formation documentation and agreements,

– fund formation and operating documentation,

– regulatory mapping where needed,

– transactions, restructurings, and dispute planning.

Our sister company – IMSG supports the running of the structure:

– company secretarial and filings,

– accounting/tax coordination,

– ongoing operational cadence (records, approvals, reporting),

– practical “bankability” support.

If you’re exploring Hong Kong for a client, start here:

—

Next step: quick call with our Principal

If you want to discuss a client fact pattern or your firm’s recurring needs, we can set up a quick Zoom call with Michael Titus (Principal, TITUS):

Send 2–3 time slots to us via:
Email: info@titus.com.hk, or
Whatsapp: +852 9702 3003

—

Disclaimer: This article is for general information only and does not constitute legal advice. Specific advice should be sought for your particular circumstances.

RELATED READING

– LPF guide: https://titus.com.hk/the-limited-partnership-fund-lpf-in-hong-kong-a-complete-guide/

– OFC guide: https://titus.com.hk/the-open-ended-fund-company-ofc-in-hong-kong-what-you-need-to-know/

– DIPN 61 (plain English): https://titus.com.hk/dipn-61-hong-kong-profits-tax-exemption-for-funds/

– Carried interest (0% profits tax): https://titus.com.hk/hong-kong-carried-interest-tax-concession-0-profits-tax/

– Bankable structures playbook: https://titus.com.hk/bankable-hong-kong-fund-structures-aml-controls/

The post Hong Kong Funds & Private Investment Vehicles: A Practical Guide for Families, Founders and Private Capital (2026) appeared first on Titus.

At TITUS, we often see SMEs and startups focus heavily on partnership agreements and intellectual property, while overlooking a critical vulnerability: mental incapacity. If a key decision-maker loses the ability to manage their affairs due to illness or accident, business operations and family finances can grind to a devastating halt.

This is where an Enduring Power of Attorney (EPA) becomes your most vital safety net.

What is an Enduring Power of Attorney (EPA)?

Under the Enduring Powers of Attorney Ordinance (Cap. 501), an EPA is a legal document that allows you (the “Donor”) to appoint one or more persons (the “Attorneys”) to take care of your financial matters.

The “Enduring” Difference: Unlike a General Power of Attorney—which becomes invalid after 12 months generally or at the moment you lose mental capacity—an EPA is specifically designed to endure that incapacity. It ensures that your trusted representatives can continue to manage your property and finances exactly when you need them most.

Important Note: In Hong Kong, an EPA only covers financial and property matters. It does not cover healthcare or lifestyle decisions.

Who Needs an EPA?

While often associated with the elderly and dementia planning, an EPA is a strategic tool for:

• SME & Startup Founders: If you are the sole signatory for business accounts or the primary decision-maker, an EPA ensures your business stays afloat—paying staff, suppliers, and rent—if you are temporarily or permanently incapacitated.
• Property Owners: For those with real estate investments, an EPA allows your Attorney to manage leases, mortgage payments, or sales.
• Family Breadwinners: Ensure your spouse and children have immediate access to funds for daily living and medical expenses without waiting months for court intervention.

How Does It Work? The Process in Hong Kong

Creating a valid EPA is a formal process that requires strict adherence to statutory requirements.

1. Prescribed Form: You must use the specific legal forms as set out in Cap. 501A.
2. Medical & Legal Certification: To ensure you have the capacity to sign, the document must be witnessed by:
   • A registered medical practitioner in Hong Kong.
   • A practising solicitor in Hong Kong.
   • Note: Both must be present, though the law allows for a 28-day gap between the doctor’s and solicitor’s signatures in certain circumstances.
3. Registration: The EPA must be registered with the Registrar of the High Court. While it can be registered early, it must be registered once the Donor becomes (or is becoming) mentally incapacitated before the Attorney can exercise full powers.

Why “Doing It Yourself” is Risky

The Hong Kong courts are incredibly strict regarding EPAs. A single technical error in the witnessing process or the wording of the “Authority” section can render the entire document void. Without a valid EPA, your family might have to go through rounds of clarification or even apply for Committeeship under the Mental Health Ordinance—a process that is notoriously expensive, public, and can take over a year to finalize.

Frequently Asked Questions (FAQ)

1. Can I appoint my spouse and my business partner as Attorneys? Yes. You can appoint them to act “Jointly” (must mutually agree on everything) or “Jointly and Severally” (can act independently). 

2. Can an EPA be used to make medical decisions for me? No. In Hong Kong, an EPA is strictly for financial and property affairs.

3. Does an EPA take away my control while I am still healthy? Not necessarily. You can specify in the document that it only becomes effective upon a specific date or when a doctor certifies your incapacity.

4. Is an EPA the same as a Will? No. A Will only takes effect after death. An EPA is for the protection of your interests while you are alive but unable to speak for yourself. An EPA will be revoked on the death of the donor.

5. How much does it cost to set up an EPA? While there are legal and medical fees involved, they are a fraction of the cost of the court proceedings required if you don’t have one.

Secure Your Future with TITUS

At TITUS, we specialize in the intersection of business and private client law. We don’t just “fill out forms”; we provide a comprehensive risk management strategy for SME owners and families.

Protect your business. Protect your family. Contact us today (or send us a message here)for a confidential consultation on setting up your Enduring Power of Attorney.

Disclaimer: This blog post provides general information only and does not constitute legal advice. For specific legal issues or concerns, please consult with a qualified legal professional.

The post Securing Your Legacy: A Guide to Enduring Powers of Attorney (EPA) in Hong Kong appeared first on Titus.

It’s the classic sales nightmare: Your top account manager resigns. You wish them well, throw a farewell lunch, and they walk out the door.

Three weeks later, you realize your sales pipeline has gone quiet. You check in with a long-term client, only to hear: “Oh, we actually moved our account to [Ex-Employee]’s new agency. They gave us a great call last week.”

You’ve been poached.

Many Hong Kong business owners assume their “Non-Compete” clause covers this. But as we discussed in our previous post, non-competes are hard to enforce. The real weapon for protecting your revenue is the Non-Solicitation Clause.

At TITUS, we know that for professional service firms, your client list is the business. Here is how to lock it down legally.

The “Double Lock”: Data vs. Relationships

To stop an employee from walking away with your business, you need to understand that you are protecting two different things: the Data (the contact list) and the Relationship (the influence).

You need a separate legal “lock” for each.

Lock 1: Confidentiality (The Data)

• The Risk: The employee downloads your CRM database to a USB drive or emails the client spreadsheet to their personal email before leaving.
• The Law: This is often a breach of confidentiality or even theft. However, Hong Kong courts are strict: You must prove the information is actually confidential.
• The Trap: If your client list is public (e.g., listed on your website as “Our Partners”), it is not confidential. If the employee just remembers the names in their head, that is also hard to stop.
• The Fix: Your employment contract must specifically define what constitutes Confidential Information.

Lock 2: Non-Solicitation (The Relationship)

• The Risk: The employee doesn’t steal the database, but they know the clients personally. They call them up and say, “I’m at a new firm now, I can offer you a better rate.”
• The Law: A Non-Solicitation clause forbids the ex-employee from actively approaching your clients to generate business.
• The Enforceability: Unlike non-competes (which ban working), courts are more willing to enforce non-solicits because they don’t stop the employee from earning a living—they just stop them from stealing your living.

The “Passive Poaching” Loophole (And How to Close It)

Here is the most common excuse ex-employees use in court:

“I didn’t breach the contract! I didn’t call the client. The client saw my LinkedIn update and called ME. I just answered the phone.”

In Hong Kong law, Solicitation usually requires the employee to make the first move. If the client calls them, a standard non-solicitation clause might not stop them from taking the business.

The Solution: The “Non-Dealing” Clause To plug this hole, you need a Non-Dealing Clause. This goes one step further: it says the ex-employee cannot process any business from your clients, regardless of who called whom. Even if the client begs them, they must say, “I cannot work with you for 6 months due to my contract.”

The “Personal Touch” Rule

Just like non-competes, you cannot be greedy. You cannot ban an ex-employee from contacting every single client your company has ever had.

To be enforceable in Hong Kong, the clause must be a reasonable and adequate protection to the employer. It should usually be limited to clients the employee personally dealt with during their employment.

• Valid: Banning a Sales Manager from poaching the 50 clients they managed.
• Invalid: Banning a Junior Admin from contacting a client they never met.

TITUS Checklist: Is Your Client Protection Real?

Open your current employment contract template. Does it pass this 3-point check?

1. Does it separate “Solicitation” from “Dealing”? (If it only says “Non-Solicit,” you are vulnerable to the “they called me” excuse.)
2. Is the timeframe reasonable? (6 to 12 months is standard. Anything over 12 months is high risk for rejection by courts.)
3. Is “Confidential Information” defined clearly? (Does it explicitly mention client databases, pricing lists, and contact details?)

Protect your assets. Your intellectual property isn’t just your logo; it’s the handshake you have with your clients. Don’t let it walk out the door.

Disclaimer: This article is for general informational purposes only and does not constitute legal advice. Drafting enforceable restrictive covenants requires precise legal wording tailored to your specific business risks. Always consult a solicitor.

The post They Can Leave, But They Can’t Take the Rolodex: Protecting Your Client List in Hong Kong appeared first on Titus.

What exactly is a “fund” in Hong Kong?

Under the SFO, a fund is typically a collective investment scheme—arrangements where investors pool money/property, don’t have day-to-day control, and expect profits managed by someone else. This modern definition captures familiar ideas like mutual funds, unit trusts and private funds.

Core features (plain-English):

• Pooling: investors’ money is combined to invest at scale
  
• Professional management: usually by an SFC-licensed Type 9 (asset management) manager if management is conducted in HK
  
• Diversification & rules: the fund’s offering docs/LPA or instrument of incorporation set what the manager can do, how fees work, and investors’ rights
  
• Open-ended vs closed-ended: open-ended funds allow redemptions; closed-ended funds (e.g., PE/VC) don’t, and return capital after exits
  
• Key gatekeepers: manager, custodian/trustee, auditor, administrator (varies by structure)
  

In HK, carrying on asset management as a business generally requires an SFC Type 9 licence (with some nuances depending on activity and structure).

Common Fund Structures 

1) Unit Trust 

• What it is: Fund formed by trust deed; trustee holds assets for investors (unit-holders).
  
• Best for: Traditional retail mutual funds, passives, and some institutional mandates.
  
  

(No separate citation needed here beyond CIS definition.)

2) Open-Ended Fund Company (OFC) 

• What it is: A company with variable capital purpose-built for funds under the SFO; allows share redemptions out of capital (not possible for ordinary companies). Must appoint a Type 9 manager and a custodian.
  
• Regulation & “one-stop” setup: SFC registers or authorises the OFC and coordinates incorporation with the Companies Registry and business registration—in a single process.
  
• Use cases: Hedge/long-only strategies, liquid alts, multi-asset—anything that benefits from corporate form + open-ended liquidity.
  

3) Limited Partnership Fund (LPF) 

• What it is: A contractual limited partnership for private funds (PE/VC, credit, real assets). Requires a general partner, investment manager, responsible person (AML/CTF) and auditor; the manager must be licensed if it carries on regulated asset management in HK.
  
• Why GPs like it: Global “LP” look-and-feel (Delaware/Cayman-style economics and flexibility) with Hong Kong law and access to local concessions.
  

4) Re-domiciliation—move existing offshore funds into HK

• Hong Kong lets overseas corporate funds re-domicile as OFCs, and overseas partnerships re-register as LPFs, preserving legal continuity. Mechanisms took effect in 2021.
  

Who does what? (At a glance)

• Fund Manager (SFC Type 9 where applicable): discretionary portfolio management; subject to SFC codes (e.g., FMCC) when licensed.
  
• Custodian/Trustee: safekeeping and oversight—mandatory for OFCs (specific custodian standards apply).
  
• Administrator: NAV, transfer agency, reporting (contractual, not always mandated).
  
• Auditor: annual audit (required for LPFs).
  

How are Hong Kong funds taxed?

Unified Fund Exemption (UFE): Since 1 April 2019, privately offered funds—onshore or offshore—can enjoy profits tax exemption on qualifying transactions (subject to conditions). This is the bedrock tax rule for private funds operating in/through HK.

Carried Interest Concession: Eligible carried interest accruing on/after 1 April 2020 can be taxed at 0% profits tax for qualifying persons; there are also salaries tax concessions for employees receiving eligible carry (with employer reporting obligations).

System-wide advantages: HK’s territorial source principle + no VAT/sales tax, no capital gains tax, and no withholding on dividends/interest are central reasons managers use HK.

Picking the right structure

• Retail / daily liquidity / ETFs: typically Unit Trust or public OFC.
  
• Liquid hedge/alt strategies: Private OFC can be attractive (corporate form + variable capital).
  
• PE/VC/credit/real assets: LPF mirrors global PE economics and governance.
  
• Existing offshore fund looking to anchor in HK: consider re-domiciliation to OFC/LPF.
  

FAQs (quick hits)

Do I need a licence?
If you’re carrying on asset management in HK, yes—SFC Type 9 is generally required (nuances apply for delegation/incidental activities).

Can a foreign fund migrate to Hong Kong?
Yes—corporate funds to OFC, partnership funds to LPF, keeping continuity (subject to statutory steps).

Does Hong Kong tax my investors’ capital gains?
HK does not levy capital gains tax; funds rely on UFE for profits tax exemption (conditions apply). Always get structuring advice.

CTA: Want help choosing between LPF and OFC (or re-domiciling)? WhatsApp us at +852 9720 3003 or email info@titus.com.hk.

Related reading

• The Open-Ended Fund Company (OFC) in Hong Kong
• The Limited Partnership Fund (LPF) in Hong Kong: A Complete Guide
• Contact Titus

The post What Is an Investment Fund? Structures Explained for Beginners (Hong Kong Edition) appeared first on Titus.

A vesting agreement (also called a vesting contract or vested equity agreement) sets out how founders, employees and advisors may earn ownership of a company over time. It aligns incentives, reduces the risk of “free-riders,” and is essential for startups, businesses seeking external fundraising and retention of key staff. In Hong Kong, share awards and options linked to employment typically fall under Salaries Tax, and enforceability of post-termination restrictions depends on reasonableness—so your paperwork and policy design really matter.

What is a Vesting Agreement?

If you have ever asked, “What are vesting agreements and how do they work?”—the answer is that a vesting agreement is a contract that links equity (such as shares, options, RSUs or tokens) to time or performance milestones. Normally, the equity is unvested until certain conditions are met. Before it vests in the holder, it can be forfeited or repurchased if the individual leaves the company or fails to meet agreed milestones.

Well-designed vesting contracts:

·   Align incentives between the company and talent

·   Deter early departures (no “free rides”)

·   Signal governance quality to investors

For founders, this often takes the form of reverse vesting: founders hold shares up-front, but the company can repurchase unvested shares at cost if a founder departs before fully vesting.

Common Vesting Structures

1) Time-Based Vesting (with a Cliff)

·   Standard: Four years with a 12-month cliff (no ownership rights during the first 12 months), then monthly or quarterly vesting.

·   Why: Gives the company time to assess whether the holder of the vesting agreement is a good fit and discourages short-term churn.

2) Milestone- or Performance-Based Vesting

·   Use when: Timing is uncertain or the role is KPI-driven (e.g., product launch, revenue targets).

·   Tip: Define milestones precisely and specify who certifies completion.

3) Reverse Vesting for Founders

·   Mechanics: The founder holds shares, but they are subject to repurchase until vesting completes. This protects both the team and future investors.

4) Acceleration (Single vs Double Trigger)

·   Single-trigger: Vesting accelerates on a single event (often an acquisition).

·   Double-trigger: Vesting accelerates only if two events occur—typically a change of control and a qualifying termination (e.g., without cause) within a set period post-deal. Double-trigger acceleration is more market-standard and acquirer-friendly.

What Actually Goes Into a Vesting Agreement?

1. Who + What: Parties, roles, and the equity instruments (shares, options, RSUs).

2. Grant / Purchase Details: Number of shares or options, exercise price (if any), escrow/administration.

3. Vesting Schedule: Duration, cliff, cadence (monthly/quarterly), and any performance criteria.

4. Company Repurchase / Forfeiture Rights: Especially important for reverse vesting on founder share).

5. Acceleration Provisions: Single or double-trigger rules, acquisition definitions, and caps.

6. Leaver Terms: Define “good leaver” vs “bad leaver,” notice, cause/constructive dismissal definitions.

7. Termination & Post-Termination Treatment: Clarify what happens to vested/unvested portions and option exercise windows.

8. Restrictions & Policies: Confidentiality, IP assignment; avoid over-broad non-competes (see HK note below).

9. Governing Law & Dispute Resolution: Typically, Hong Kong law for local teams and coordination if talent is cross-border.

10.  Board/Shareholder Approvals + Cap Table Updates: Keep everything consistent with your ESOP/option plan rules.

Hong Kong–Specific Notes You Shouldn’t Skip

1) Tax Treatment (Salaries Tax)

·   Share options linked to employment are generally taxed on exercise/assignment/release (i.e., not at grant).

·   Share awards/RSUs are generally taxed when the restriction is lifted (i.e., at vesting) if they arise from employment.

·   Always factor in withholding/reporting and cross-border mobility (e.g., split-year, source of employment). See the IRD and gov.hk guidance for current practice.

Further technical reading: IRD DIPN 42 (revised) discusses the interaction of accounting/tax treatment of financial instruments and includes commentary relevant to employee equity. Professional advice is strongly recommended.

2) Enforceability of Post-Termination Restrictions

In Hong Kong, post-termination restraints (non-compete, non-solicit and non-poach) are usually unenforceable and void unless reasonable and necessary to protect a legitimate business interest. Avoid blanket restrictions; tailor duration, scope, and geography, as courts will scrutinise any overreach.

Founder vs Employee: How the Paperwork Differs

·   Founders: Reverse vesting on issued shares plus repurchase mechanics, sometimes with double-trigger acceleration to balance founder protection with acquirer comfort.

·   Employees: Options (or RSUs) under an ESOP/Share Option Plan, with time-based vesting, standard exercise windows, and clear treatment on termination.

Practical Tips to Get Vesting Right (First Time)

1. Start with policy, not just a template. Document your equity philosophy: who gets what, when, and why.

2. Standardise schedules (e.g., 4-year / 1-year cliff) unless you have a strong reason to deviate.

3. Define “cause,” “good reason,” “good/bad leaver,” and change of control precisely.

4. Choose your acceleration carefully. Double-trigger is usually investor- and buyer-friendly; single-trigger can spook acquirers.

5. Synchronise documents: offer letters, option grant notices, shareholders’ agreements, IP assignment, and confidentiality agreements.

6. Mind Hong Kong tax timing: options at exercise; awards at vesting/restriction lift. Budget for payroll/tax compliance.

7. Keep a clean cap table with board approvals and leaver calculations.

8. Anticipate mobility—if employees relocate, vesting and tax exposure can change.

Common Mistakes We See (and How to Avoid Them)

·   No reverse vesting for founders: Risk of a departed co-founder keeping a large stake with no ongoing contribution.

·   Vague leaver/acceleration clauses: Leads to disputes at the worst possible time—M&A, down rounds, or exits.

·   Over-broad non-competes: Often unenforceable in Hong Kong; tailor them surgically.

·   Tax timing surprises: Failing to plan for the taxable event (exercise vs vesting) and reporting obligations.

FAQs

Is a vesting agreement legally required?

Not always, but investors expect founders to have vesting in place and employees to be covered by a formal plan.

What is the difference between a vesting agreement and a shareholders’ agreement?

A vesting agreement governs how and when equity becomes owned, while a shareholders’ agreement deals with broader company and shareholder rights.

What is double-trigger acceleration?

A clause that accelerates vesting only when two events occur (e.g., change of control and qualifying termination). It is commonly used and acquirer-friendly.

How are share options and share awards taxed in Hong Kong?

Generally, options tied to employment are taxed on exercise/assignment/release; share awards are taxed when restrictions lift (vesting). Always check the latest IRD guidance.

Related Reading from TITUS

·   Convertible Notes—Overview, Advantages, and Terms (Hong Kong) – our practical guide for founders and investors. https://titus.com.hk/what-is-a-convertible-note-overview-advantages-and-terms/

·   What Is an ESOP (Employee Share Ownership Plan)? – Navigating Employee Share Ownership Plans in Hong Kong. https://titus.com.hk/what-is-an-esop-employee-stock-ownership-plan/

How TITUS Can Help

We design and implement founder reverse vesting, ESOPs/share option plans, vested equity agreements, and M&A-ready acceleration that stand up to investor and acquirer scrutiny—with Hong Kong tax and enforceability baked in.

Thinking about a vesting agreement or ESOP?

Email us at info@titus.com.hk or message us on LinkedIn to set up a quick consult.

Important Note

This article provides general information and does not constitute legal advice. You should seek advice tailored to your specific circumstances.

The post What are vesting agreements and how do they work? appeared first on Titus.

In today’s dynamic business landscape, attracting and retaining top talent is a critical challenge for companies worldwide, and Hong Kong is no exception. Business owners, company directors, startup managements, and founders are constantly seeking innovative strategies to incentivise their teams and foster a sense of shared success. One such powerful tool gaining increasing recognition is the Employee Stock Ownership Plan (ESOP).

This comprehensive ESOP guide aims to demystify the concept of an ESOP, explore its benefits, and provide crucial insights into its application to various stakeholders within Hong Kong. Whether you are considering a new incentive scheme or looking to understand the intricacies of an ESOP scheme, this article will provide valuable information to help you navigate this complex yet rewarding approach to employee engagement and ownership.

What Exactly is an Employee Stock Ownership Plan (ESOP)?

An Employee Stock Ownership Plan (ESOP) is a type of qualified retirement plan that provides employees with an ownership interest in the company through shares of its stock. Unlike traditional retirement plans, an ESOP primarily invests in the stock of the sponsoring employer. This unique structure aligns the interests of employees with those of the company, as employees become direct stakeholders in the business’s success.

At its core, an ESOP is designed to be an employee benefit plan, similar in some ways to a profit-sharing plan. The company establishes a trust, which then acquires company stock. This stock is held in the trust for the benefit of the employees, and shares are allocated to individual employee accounts over time. The value of these accounts fluctuates with the company’s stock performance, offering employees a direct stake in the company’s growth and profitability.

ESOPs are often utilised to achieve various corporate objectives, including but not limited to providing a market for the shares of a departing owner, raising new capital, or as a tool for corporate finance. However, their fundamental purpose remains to foster employee ownership and engagement, ultimately aiming to enhance productivity and create a more cohesive and motivated workforce. An ESOP transforms employees into owners, giving them a vested interest in the company, which enables the long-term success of the enterprise.

How Does an ESOP Work? The Mechanics of Employee Ownership

The implementation of an Employee Stock Ownership Plan involves several key steps and mechanisms that ensure its proper functioning and compliance with relevant regulations. Understanding these mechanics is crucial for any business owner or founder considering an ESOP scheme.

• Establishing the ESOP Trust: The first step involves the creation of a trust, which is a legal entity designed to hold the company’s stock for the benefit of its employees. This trust acts as the legal owner of the shares.
• Funding the ESOP: The company contributes shares of its own stock or cash to the ESOP trust. If cash is contributed, the trust then uses this cash to purchase company stock, either from the company directly or from existing shareholders. These contributions are generally tax-deductible for the company, providing a significant financial incentive.
• Allocating Shares to Employee Accounts: Once the stock is in the trust, it is allocated to individual employee accounts. This allocation is typically based on a predetermined formula, which might consider factors such as an employee’s salary, years of service, or a combination of both. It is important to note that employees do not directly own the shares in their accounts until they are vested.

• Vesting Schedule: Employees gain full ownership of the allocated shares over time through a vesting schedule. This schedule dictates the rate at which an employee’s ownership in the ESOP becomes non-forfeitable. Common vesting schedules might be cliff vesting (e.g., 100% vested after 3 years) or graded vesting (e.g., 20% vested per year over 5 years). Employees typically cannot sell or transfer their shares until they leave the company or retire.
• Repurchase Obligation (for Private Companies): For privately held companies, there is a crucial aspect known as the repurchase obligation. When an employee leaves the company, retires, or becomes disabled, the ESOP trust or the company itself is obligated to repurchase the shares from the employee at their fair market value. This ensures liquidity for employees who cannot sell their shares on an open market.
• Distribution to Employees: Upon an employee’s departure or retirement, their vested shares are distributed to them. This distribution can be in the form of company stock or cash, depending on the ESOP plan document. Employees can then sell these shares back to the company or the ESOP, or hold them if the company is publicly traded.

This process ensures that employees gradually build an ownership stake in the company, aligning their long-term financial interests with the company’s sustained success. The structure also provides significant tax advantages for the company, as further elaborated below, making it an attractive option for business owners seeking innovative ways to reward and retain their workforce.

The Benefits of Implementing an ESOP: A Win-Win for Companies and Employees

Implementing an Employee Stock Ownership Plan offers a multitude of advantages for both the company and its workforce, making it a compelling strategy for businesses in Hong Kong and beyond. These benefits extend beyond mere financial incentives, fostering a culture of shared responsibility and collective success.

For Employees:

• Direct Ownership Stake: ESOPs provide employees with a tangible ownership interest in the company they work for. This direct stake cultivates a sense of belonging, pride, and shared purpose, transforming employees from mere workers into true partners in the enterprise.
• Potential for Wealth Creation: As the company’s value grows, so does the value of the employees’ stock holdings. This offers a significant opportunity for wealth creation, providing a long-term financial benefit that can supplement or even form a substantial part of their retirement savings.
• Alignment of Interests: With their financial well-being tied to the company’s performance, employees are naturally incentivised to contribute to its success. This alignment of interests often leads to increased motivation, productivity, and a greater commitment to achieving organisational goals.
• Enhanced Retirement Security: An ESOP can serve as a powerful retirement vehicle, offering a potentially substantial nest egg for employees upon their departure or retirement. This can be particularly attractive in a competitive talent market like Hong Kong, where comprehensive benefits packages are highly valued.

For Companies:

• Increased Employee Motivation, Productivity, and Performance: Employee-owned companies often report higher levels of employee engagement and productivity. For instance, when employees feel a direct connection between their efforts and the company’s success or financial performance, they are more likely to go the extra mile. Higher levels of employee performance also led to higher company profitability and contribute to a more resilient corporate culture.
• Attraction and Retention of Top Talent: In Hong Kong’s dynamic business environment, attracting and retaining skilled professionals is paramount. An ESOP can be a powerful differentiator, making a company more attractive to prospective employees and encouraging existing talent to stay long-term.
• Succession Planning and Ownership Transition: For business owners looking to retire or transition out of their company, an ESOP can provide a smooth and tax-efficient mechanism for selling their shares. This allows for a gradual and orderly transfer of ownership, ensuring the continuity of the business.
• Tax Advantages: While specific tax implications vary by jurisdiction, ESOPs often offer significant tax benefits to the sponsoring company. These can include tax deductions for contributions to the ESOP trust, making it a fiscally attractive option.

ESOPs in Hong Kong: Navigating the Local Landscape

While the fundamental principles of an ESOP remain consistent globally, their implementation and implications can vary significantly depending on the local legal and regulatory environment. For businesses operating in Hong Kong, understanding the specific nuances of establishing and managing an ESOP scheme is crucial.

Legal Framework and Flexibility:

One key advantage for companies considering an ESOP in Hong Kong is the relative flexibility of its legal framework. Unlike some jurisdictions with highly prescriptive ESOP regulations, Hong Kong law generally imposes no specific restrictions on the terms of an ESOP for a private company [1]. This means that companies have considerable latitude in designing their ESOPs to best suit their specific objectives and circumstances. Similar to companies incorporated in the Cayman Islands, Hong Kong companies can structure their ESOPs with a high degree of customisation, provided they adhere to their articles of association and general company law principles.

However, it is important to distinguish between a broad ESOP and an Employee Share Option Plan (ESOP), which is a common form of employee incentive in Hong Kong. An Employee Share Option Plan typically grants employees the right, but not the obligation, to purchase company shares at a predetermined price within a specified period. These plans are widely used to incentivise executives and employees by aligning their interests with shareholder value creation.

Tax Implications in Hong Kong:

Taxation is a critical consideration for any ESOP, and Hong Kong has its own set of rules that must be carefully navigated. The tax implications of an ESOP in Hong Kong can arise at various stages:

• Grant of Options: The grant of share options itself is not subject to Hong Kong salaries tax. However, this can change if the options are granted at a discount or if there are other specific arrangements.
• Exercise of Options: When an employee exercises their share options, the difference between the market value of the shares at the time of exercise and the exercise price (the price at which the employee can buy the shares) is generally considered a taxable perquisite and is subject to salaries tax.
• Sale of Shares: The tax treatment of the sale of shares acquired through an ESOP depends on whether the gains are considered capital in nature or revenue in nature. Hong Kong does not have a capital gains tax, so if the gains are considered capital, they are not taxable. However, if the gains are deemed to be revenue in nature (e.g., if the employee is considered to be trading in securities), they may be subject to profits tax.

Given the complexities of Hong Kong’s tax laws, companies should seek professional tax advice when structuring and implementing an ESOP. This will ensure that the plan is tax-efficient for both the company and its employees, and that it complies with all relevant regulations.

Setting Up an ESOP in Hong Kong: Key Steps

For business owners and founders in Hong Kong considering an ESOP scheme, the process typically involves the following key steps:

• Define Objectives: Clarify the goals of the ESOP. Is it primarily for talent retention, succession planning, or to foster a culture of ownership? The objectives will shape the design of the plan.
• Plan Design: Work with legal and tax advisors to design the ESOP, including the type of plan (e.g., share option plan, share award scheme), eligibility criteria, vesting schedule, and other key terms.
• Valuation: For private companies, it is essential to obtain an independent valuation of the company’s shares to determine the fair market value. This is crucial for both tax purposes and for ensuring fairness to employees.
• Legal Documentation: Draft the necessary legal documents, including the ESOP plan rules, trust deed (if applicable), and individual grant agreements for employees.
• Communication and Implementation: Clearly communicate the details of the ESOP to employees, ensuring they understand its benefits and how it works. Implement the plan and establish procedures for its ongoing administration.

Given the legal and financial complexities involved, it is highly recommended that companies engage experienced legal and financial professionals to guide them through the process of setting up an ESOP in Hong Kong. This will help to ensure that the plan is structured effectively, complies with all legal and regulatory requirements, and achieves its intended objectives.

Conclusion: Empowering Your Business with an ESOP

In Hong Kong’s fast-paced business environment, an Employee Stock Ownership Plan (ESOP) can be a transformative tool for companies looking to gain a competitive edge. By offering employees a direct stake in the company, an ESOP scheme can foster a culture of ownership, drive productivity, and align the interests of your team with the long-term success of your business. From attracting and retaining top talent to facilitating a smooth ownership transition, the benefits of a well-structured ESOP are numerous and compelling.

However, as we have seen, navigating the legal and tax complexities of an ESOP in Hong Kong requires careful planning and expert guidance. The flexibility of Hong Kong’s legal framework offers a unique ESOP to your specific needs, but it also underscores the importance of getting the details right. From plan design and valuation to tax compliance and ongoing administration, every step must be carefully considered to ensure the plan is both effective and compliant.

At TITUS, our team of experienced Hong Kong solicitors understands the intricacies of corporate law and employee incentive schemes. We can provide you with the expert legal advice you need to design and implement an ESOP that is right for your business. Whether you are a startup founder looking to incentivise your early employees or an established business owner planning for succession, we can help you navigate the complexities of an ESOP and unlock its full potential.Contact us today for a consultation to learn more about how an ESOP can benefit your business.

Related reading

• What are vesting agreements and how do they work?
• What is a Convertible Note? Overview, Advantages, and Terms
• Contact Titus

The post What Is an ESOP (Employee Stock Ownership Plan)? appeared first on Titus.