Last updated: 13 March 2026
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
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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.
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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.
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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)
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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.
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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.
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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
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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
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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)