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What is Family Office?

Family offices are private wealth management advisory firms that serve ultra high net worth investors and operates business for one or more families. A family office that supports more than one family is stated as a multi family office.

Unlike of old style wealth management shops, family offices offers a complete outsourced solution to individual or family in managing their financial and investment matters.

Family offices can provide a wide range of services including investment advice, tax and estate planning, risk management, succession planning and support, as well as lifestyle management and assistance with philanthropic endeavors and other special interests.

Family Office is more than just wealth management

Why set up family office?

  • Family wealth protection
  • Clarifying governance over how the family stewards its wealth
  • Improving family cohesion and generational transition
  • Managing the personal affairs of family members
  • Managing investment risk

Family office is gaining popularity among ultra high net worth individuals.

In 2019, a survey conducted by Union Bank of Switzerland and Campden Wealth suggested that:

  • Over two thirds (68%) were only founded in 2000 or later.
  • Just over 10% were founded before 1970s.

Key Contact

Surendra Singh Chandrawat

Surendra Singh Chandrawat

Managing Partner

Why Hong Kong?

As a well recognized premier international financial center and wealth management center, Hong Kong offers many unique advantages for family offices to operate and grow.

Hong Kong is Asia’s largest cross border private wealth management center; second largest globally after Switzerland.

1.      World class professional services and globally experienced workforce
  • 42,000+ practitioners in the asset and wealth management business
  • 45,000+ certified public accountants in Hong Kong
  • 13,000+ practicing solicitors and barristers (including registered foreign lawyers from 33 jurisdictions)
  • Over 90 registered foreign law firms

From banking, fund management and accounting assistance, to legal advice, tax consultancy and more, family offices in Hong Kong can enjoy a full range of services to support their growth and investment.

2.      World’s freest economy with no capital control

Freest economy: World’s No.1 since 1996 (Fraser Institute, Canada), World’s No. 1 (1996-2019) (US based Heritage Foundation)

Economic openness: World’s No.1 (Legatum Institute: Global Index of Economic Openness 2019)

Business friendly taxes: World’s No.2 business friendly tax system (PricewaterhouseCoopers LLP and the World Bank Group: Paying Taxes 2020)

Competitiveness: Among the world’s top 5 (International Institute for Management Development: World Competitiveness Yearbook 2020); Worlds’ No.3, East Asia & Pacific’s No.2 for global competitiveness (World Economic Forum Global Competitiveness Report 2019)

Easiest place to do business: Worlds’ No.3 (World Bank: Doing Business 2020)

3.      One Country, Two Systems

Hong Kong retains its independent position in immigration, monetary, fiscal and taxation systems, under the principle of “One Country, Two Systems”.

Owing to a free port, Hong Kong has a separate and independent customs territory, which has no restriction on foreign ownership or on the movement of goods, capital, talent and information.

The city is one of the world’s most competitive economies that plays a pivotal role in the internationalization of the Renminbi and opening up of the Mainland’s financial markets. It is the world’s largest offshore Renminbi hub.

From expanding reform in the Mainland to developing consumption and services oriented economy, Hong Kong is promoting all its investors by providing opportunities related to the Belt and Road Initiative and the Guangdong-Hong Kong-Macao Greater Bay area, along with upholding a unique economic and legal system different from China.

4. Simple and low tax system

As of July 2021, Hong Kong holds 44 comprehensive double taxation agreements, with another 14 under negotiation. This provides tax certainty to family offices by preventing double taxation. Double taxation agreements also enable family offices to enjoy favorable withholding tax rate for cross boundary trade and investment.

Hong Kong’s tax rate is low, and the system is simple to understand. There is:

  • no sales tax or value added tax,
  • no investment withholding tax,
  • no capital gains tax,
  • no estate tax, and
  • no tax on dividends or interest from savings.

Strong government and industry support to family office operations

Over 40 private banks including top 15 global private wealth managers are in Hong Kong;

Various associations in place to support industry development;

  • Private Wealth Management Association
  • Hong Kong Venture Capital and Private Equity Association

Government support on various initiatives;

  • InvestHK, supporting the setting up of family offices.
  • Pilot Apprenticeship Programme for Private Wealth Management
  • Asian Financial Forum
  • Annual Hong Kong-Swiss Financial Seminars

Securities and Futures Commission as primary securities regulator

  • In general, a single family office is not required to be licensed if it is an operating unit or a wholly owned subsidiary of the entity holding the relevant assets of the family and it is responsible for managing the relevant assets.
  • A strong regulatory framework for protection of investors, including family offices. Intermediaries providing dealing or advisory services to family offices are required to observe conduct requirements and other regulatory requirements.

The Family Office Association Hong Kong

The Association is helping cooperation between the family office industry and government to foster the development of Hong Kong’s family office industry. The following statement was made by the Association:

“There has been robust growth in the family office industry in Hong Kong in recent years, fueled by increasing wealth and a rising population of ultra wealthy families in the city. According to the World Ultra Wealth Report 2019, Hong Kong has by far the highest density of ultra wealthy individuals at 1,364 for every million adults, higher than the international financial hubs such as Switzerland, Luxembourg, Singapore and the United States. The growing need for family office support around the management of financial affairs presents promising growth opportunities for family office operators in Hong Kong.”

Recent updates to relevant legislation

The Inland Revenue (Profits Tax Exemption for Funds) (Amendment) Ordinance 2019 (Unified Fund Exemption)

The Unified Fund Exemption regime provides a profits tax exemption on qualifying gains on the sale of securities for privately offered funds operating in Hong Kong irrespective of domicile, structure, size or purpose.

The Limited Partnership Fund Ordinance 2020

The Limited Partnership Fund Ordinance provides a new limited partnership fund regime to attract more private capital (including from family offices) and to facilitate and accelerate the development of the asset management industry in Hong Kong. To know more about Hong Kong Limited Partnership Fund click here.

How we can help?

Using market data and analytics with well thought strategies, Chandrawat & Partners has been serving ultra high net worth individuals, corporates, and asset owners in the Asia Pacific region.

Our professionals deliver global resources, product expertise, and personalized service, needed to address the complex challenges of managing significant wealth. We collaborate across different disciplines with wealth advisors, financial planners, portfolio managers, bankers, etc. to help solve complex problems.

We deliver our clients with cutting edge knowledge relevant to their strategic needs in portfolio management, knowledge management, and research. Our expertise provides asset and wealth managers to create value in a dynamic market. We provide exclusive insights into the assets, flows, and economics of the market segment, considering the behaviors of consumers and investors.

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Family offices are private wealth management advisory firms that serve ultra high net worth investors and operates business for one or more families. A family office that supports more than one family is stated as a multi family office.

Author: Chandrawat & Partners

Date: August 2022

Topic: Hong Kong, a leading hub for family offices

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About Us

Chandrawat & Partners is a leading full service firm in Hong Kong. We provide a wide range of high quality consulting services to domestic and international clients. With a strong network of professional advisors worldwide, we have a wealth of first hand experience and expertise in providing effective solutions to the complex issues.

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