The Hong Kong Family Office in 2026: What the Concession Actually Requires

In November 2016 I wrote a piece asking whether automated advisers would displace the private banker. It was the question everyone in wealth management was asking that year, and it turned out to be the wrong one.

The structural change of the decade in Asian private wealth was not software. It was that families stopped buying wealth management and started building it — hiring the investment team themselves, holding the assets in their own vehicles, treating the bank as a counterparty rather than an adviser. By the end of 2025 there were over 3,380 single family offices operating in Hong Kong, a rise of roughly a quarter in two years.

Hong Kong now has a tax regime built for that arrangement. It is generous, more demanding than the marketing suggests, and it does not fit every family.

The concession

The Inland Revenue (Amendment) (Tax Concessions for Family-owned Investment Holding Vehicles) Ordinance 2023 came into operation on 19 May 2023 and applies from the year of assessment beginning on or after 1 April 2022. The concessionary profits tax rate on the assessable profits of a qualifying family-owned investment holding vehicle, earned from qualifying and incidental transactions, is 0%.

Nothing about the rate is complicated. Everything else is in the conditions.

What has to be true

The vehicle. The FIHV need not be a company. The statutory definition of "entity" covers a body of persons corporate or unincorporate, or a legal arrangement, and expressly includes a corporation, a partnership and a trust — including a discretionary trust. It may be established inside or outside Hong Kong. What it must be is normally managed or controlled in Hong Kong during the basis period, and not a business undertaking for general commercial or industrial purposes.

The family. One or more members of the family must hold at least 95% of the beneficial interest in the FIHV, directly or indirectly, at all times during the basis period. The definition of a single family is generous — spouse, lineal ancestors of both spouses, lineal descendants, siblings of any of those and their descendants, living or deceased, with no stated generational cap, and including adopted and step-children of a spouse or former spouse. A charitable entity may hold up to 25%, if family members hold at least 75% and unrelated persons no more than 5%.

The office. The FIHV must be managed in Hong Kong by an eligible single family office of the same family: a private company, normally managed or controlled here, at least 95% owned by family members, and satisfying a safe harbour under which at least 75% of its assessable profits derive from services to specified persons of the family.

The three hard numbers. The aggregate value of specified assets under Schedule 16C managed by the eligible single family office for the family's FIHVs must be at least HK$240 million. The office must incur at least HK$2 million of operating expenditure in Hong Kong on the relevant activities, and must have at least two full-time employees in Hong Kong who carry them out and hold the necessary qualifications.

Two limits people miss. Not more than 50 FIHVs managed by the same eligible single family office may benefit — the cap is per office, not per family. And the election into the regime must be in writing, applies to all subsequent years, and is irrevocable.

The licensing question

The question I am asked most often is whether a family office needs a licence from the Securities and Futures Commission. In general, a genuine single family office does not.

The SFC's position rests on two grounds. Where the office provides asset management services solely to related entities, it falls within the intra-group carve-out from Type 9 regulated activity. More broadly, the SFC has said a genuine single family office arrangement not being run as a business should not in the ordinary course be considered as carrying on a business for licensing purposes. A multi-family office exercising full discretionary authority over unrelated families' assets is in a different position and would likely need a licence.

Which regime, and why it matters

Hong Kong has two routes to a nil charge on investment profits, and they are frequently conflated.

The unified fund exemption, in sections 20AM to 20AY of the Inland Revenue Ordinance and in operation since 1 April 2019, is an exemption rather than a concessionary rate. It has no minimum asset threshold, no ownership test and no employee or expenditure requirement. What it requires is that the arrangement meets the statutory definition of a "fund" and that the qualifying transactions are carried out or arranged in Hong Kong by a specified person — an SFC-licensed corporation or a registered authorised institution — unless the fund is a qualified investment fund.

The FIHV concession requires no licensed manager; an unlicensed eligible single family office suffices. In exchange it imposes the HK$240 million, HK$2 million and two-employee conditions, the 95% ownership test and the irrevocable election. That is the real trade. The two can overlap, and the Department has confirmed that an FIHV meeting the fund definition and using a licensed corporation may already be exempt under the fund regime.

Against Singapore

Singapore's section 13O requires S$20 million of designated investments and two investment professionals; section 13U requires S$50 million and three, at least one of whom is not a family member. Both carry a tiered local business spending requirement rising from S$200,000 to S$1 million with assets under management, and a capital deployment requirement to invest the lower of S$10 million or 10% of assets into a defined list of Singapore-linked investments. Applications go to the Monetary Authority of Singapore for approval. More than 2,000 single family offices held Singapore tax incentives at the end of December 2025.

Hong Kong's threshold is higher in headline terms, but the structure differs in two ways that matter. There is no requirement to deploy capital into Hong Kong assets and no restriction on where investments are located. And there is no approval gate: the concession is self-assessed, with an advance ruling available for those who want certainty.

Neither jurisdiction is simply cheaper. Singapore asks for less money and more local commitment; Hong Kong asks for more and leaves the portfolio alone.

Residence, which is usually the real question

For many families the tax regime is secondary to the immigration position. The New Capital Investment Entrant Scheme, open since 1 March 2024, requires a minimum net investment of HK$30 million: HK$27 million in permissible assets and HK$3 million into a CIES Investment Portfolio overseen by the Hong Kong Investment Corporation.

Real estate counts, within limits loosened twice since launch: an aggregate cap of HK$15 million, of which residential is capped at HK$10 million and must be a single property priced at HK$30 million or above. Since March 2025 the investment may be made through a wholly-owned private company that is an FIHV or family-owned special purpose entity managed by an eligible single family office — which is what makes the two regimes fit together. The scheme had received 3,166 applications by the end of February 2026.

What is not yet law

One important qualification, and I would rather state it than have a client discover it.

The 2026-27 Budget promised to expand the regime, and the Inland Revenue (Amendment) (Preferential Tax Regimes for Funds, Family-owned Investment Holding Vehicles and Carried Interest) Bill 2026 was gazetted on 12 June 2026 with first reading on 24 June 2026. It proposes to widen the definition of "fund" to include certain single-investor arrangements, to add digital assets, precious metals, specified commodities, private credit and overseas immovable property to the qualifying investments list, to remove the 5% cap on incidental transactions, and to introduce an economic substance requirement and a tax reporting mechanism for funds using the unified exemption.

As at August 2026 that Bill is not law. Its intended effect is retrospective, to years of assessment beginning on or after 1 April 2025, but that depends on passage. The Department has allowed eligible taxpayers to file 2025/26 returns on the proposed basis subject to later revision — an accommodation, not a guarantee.

Two further things remain open. Multi-family offices are still outside the concession, and the Government has said only that it needs to examine the effectiveness and fiscal implications of extending it. And the proposed 20% cap on precious metals within a portfolio is itself under review.

If you are planning around the expanded regime, plan on the basis that it is a Bill.

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This article is general information about Hong Kong tax and regulatory law as at August 2026. It is not advice on any particular family's circumstances, and the choice between regimes turns on facts. To discuss a family office structure, write to us at [email protected].