Hong Kong's Private Wealth Management Association (PWMA) is pushing for changes in the domestic tax regime as it proposes four tax policy initiatives to attract family offices.
In a white paper, the 45-member association recommends that the existing list of Offshore Fund Exemptions should be expanded and non-resident High Net Worth Individuals (HNWIs) should remain exempt from Hong Kong tax.
In addition, the taxation treatment of Hong Kong trusts should be modified in order to encourage their use as an investment holding option for HNWIs and family offices.
Hong Kong is aiming to attract more family offices, which have been identified as a key growth engine for the industry, and its recommended changes follow in the footsteps of rival financial hub Singapore.
Hong Kong's Private Wealth Management Association (PWMA) is taking a leaf out of Singapore's book to recommend changes in the domestic tax regime.
Hong Kong is also looking at mainland China and its HNWIs concentration. The white paper "recommends implementing a new Wealth Management Orientated Cross-border Scheme making the Greater Bay Area a single wealth zone and a three-stage approach to develop it over time.
"The first stage will allow for onshore solicitation and marketing for PWM institutions based in Hong Kong (and vice versa); following this a second stage will see freer cross-border fund transfer whilst maintaining sufficient controls, and finally in stage three the scheme could be further widened/deepened to other areas in mainland China."
Altogether, the white paper lists a total of 13 recommendations, which also cover areas such as talent development and technology to facilitate client on-boarding.
"Hong Kong's private wealth management industry continues to grow, but the market is also undergoing rapid changes. It is important for us in the industry to work together to ensure Hong Kong maintains its competitiveness," said Amy Lo, Chairman, Executive Committee of PWMA.
Peter Stein, PWMA's managing director, added: "Through this white paper, we hope to define a vision for the future of our industry and we look forward to working with key stakeholders to bring these recommendations to fruition."