{"id":5045,"date":"2025-10-13T04:40:46","date_gmt":"2025-10-13T04:40:46","guid":{"rendered":"https:\/\/titus.com.hk\/?p=5045"},"modified":"2026-03-13T02:12:34","modified_gmt":"2026-03-13T02:12:34","slug":"why-hong-kong-the-citys-role-in-global-fund-management","status":"publish","type":"post","link":"https:\/\/titus.com.hk\/zh\/why-hong-kong-the-citys-role-in-global-fund-management\/","title":{"rendered":"Why Hong Kong? The City\u2019s Role in Global Fund Management"},"content":{"rendered":"\n<p><strong>TL;DR:<\/strong> Hong Kong pairs deep <strong>China connectivity<\/strong> with <strong>global market access<\/strong>, modern fund vehicles (<strong>OFC<\/strong>, <strong>LPF<\/strong>), <strong>pro-fund tax rules<\/strong>, and a <strong>progressive stance on tokenisation and virtual-asset funds<\/strong>\u2014all inside a robust, common-law regulatory ecosystem.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Proof in the numbers<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>HK$35.1 trillion (US$4.53T)<\/strong> in total <strong>assets under management<\/strong> as of <strong>31 Dec 2024<\/strong>, <strong>+13% YoY<\/strong>; <strong>net inflows<\/strong> surged <strong>81%<\/strong> in 2024.<br><\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Why managers pick Hong Kong<\/strong><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>1) Purpose-built fund vehicles (OFC &amp; LPF)<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>OFC<\/strong>: corporate, variable capital; SFC registration with <a href=\"https:\/\/growacross.com\/hong-kong\/company-formation\/\" target=\"_blank\" rel=\"noreferrer noopener\">one-stop incorporation<\/a>; manager must be <strong>Type 9<\/strong>; custodian required. Great for liquid strategies and public funds.<br><\/li>\n\n\n\n<li><strong>LPF<\/strong>: private-fund partnership on HK law; widely used for <strong>PE\/VC\/credit\/real assets<\/strong>; manager must be licensed <strong>if<\/strong> it conducts regulated management in HK. Re-domiciliation in from offshore is available.<br><\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>2) Tax regime designed for funds<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Unified Fund Exemption (2019)<\/strong>\u2014profits tax exemption for <strong>privately offered funds<\/strong> operating in\/through HK (conditions apply).<br><\/li>\n\n\n\n<li><strong>Carried Interest at 0% profits tax<\/strong> for eligible carry (effective from <strong>1 Apr 2020<\/strong>), plus salaries-tax concessions for staff.<br><\/li>\n\n\n\n<li><strong>No VAT\/sales tax, no capital gains tax, and no withholding on dividends\/interest<\/strong>, per official government policy.<br><\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>3) China connectivity + cross-border channels<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Mainland\u2013Hong Kong Mutual Recognition of Funds (MRF)<\/strong> lets eligible HK and Mainland funds distribute across the boundary via streamlined vetting; <strong>quota lifted to 80%<\/strong> of AUM from <strong>1 Jan 2025<\/strong>, spurring strong flows.<br><\/li>\n\n\n\n<li><strong>ETF &amp; market linkages<\/strong> continue to expand\u2014supportive SFC circulars are widening product scope and research distribution to investors (e.g., ETF Connect research flexibility).<br><\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>4) Progressive\u2014but risk-based\u2014digital asset stance<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Retail-accessible spot VA ETFs<\/strong> launched <strong>30 Apr 2024<\/strong>, after SFC\u2019s December 2023 circular\u2014first in Asia to list both spot Bitcoin &amp; Ether ETFs.<\/li>\n\n\n\n<li><strong>Tokenisation framework<\/strong>: SFC guidance (Nov 2023; materials in 2024) enables tokenised products.<br><\/li>\n\n\n\n<li><strong>VATP licensing<\/strong> under <strong>AMLO<\/strong> effective <strong>1 Jun 2023<\/strong>; transitional arrangements completed.<br><\/li>\n\n\n\n<li><strong>Stablecoins Ordinance (Cap. 656)<\/strong> in force <strong>1 Aug 2025<\/strong>, establishing a licensing regime for fiat-referenced stablecoin activities supervised by the HKMA.<br><\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>5) Scale, talent, and infrastructure<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Strong pipeline of managers, banks and service providers; HKMA and InvestHK underscore the city\u2019s skilled workforce and 2024 rebound in AWM.<br><\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>When does Hong Kong make the most sense?<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Public funds &amp; ETFs<\/strong> needing Asia distribution and China connectivity<br><\/li>\n\n\n\n<li><strong>Hedge\/alt managers<\/strong> who want an onshore corporate fund (OFC) with a credible regulator<br><\/li>\n\n\n\n<li><strong>PE\/VC\/credit\/real assets<\/strong> sponsors seeking an LP-style HK vehicle (LPF)<br><\/li>\n\n\n\n<li><strong>Global managers<\/strong> re-domiciling from Cayman\/Singapore to leverage HK\u2019s <strong>MRF<\/strong>, <strong>tax<\/strong>, and <strong>on-the-ground talent<\/strong><br><\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>A few practicalities (what to expect)<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Licensing:<\/strong> If management is done in HK, expect <strong>SFC Type 9<\/strong> for asset management.<br><\/li>\n\n\n\n<li><strong>Custody &amp; governance:<\/strong> OFCs must appoint a custodian meeting SFC standards; LPFs must appoint an auditor; AML\/CTF \u201cresponsible person\u201d is mandatory for LPFs.<br><\/li>\n\n\n\n<li><strong>Timeline:<\/strong> OFC offers a <strong>one-stop<\/strong> SFC\/CR\/IRD establishment path; LPF registration is via the Companies Registry (by HK solicitor).<br><\/li>\n<\/ul>\n\n\n\n<p><strong>CTA:<\/strong> Thinking about <strong>OFC vs LPF<\/strong>, or re-domiciling an existing fund into Hong Kong? <strong>WhatsApp +852 9720 3003<\/strong> or <strong>info@titus.com.hk<\/strong>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Related reading<\/h3>\n\n\n\n<p>\u2022 <a href=\"https:\/\/titus.com.hk\/what-is-an-investment-fund-structures-explained-for-beginners-hong-kong-edition\/\">What Is an Investment Fund? Structures Explained (Hong Kong Edition)<\/a><br>\u2022 <a href=\"https:\/\/titus.com.hk\/the-open-ended-fund-company-ofc-in-hong-kong-what-you-need-to-know\/\">The Open-Ended Fund Company (OFC) in Hong Kong<\/a><br>\u2022 <a href=\"https:\/\/titus.com.hk\/contact-us\/\">Contact Titus<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>TL;DR: Hong Kong pairs deep China connectivity with glo [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":5043,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"off","_et_pb_old_content":"","_et_gb_content_width":"","_vp_format_video_url":"","_vp_image_focal_point":[],"footnotes":""},"categories":[1],"tags":[],"class_list":["post-5045","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Why Hong Kong? 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