Hong Kong is reportedly planning to waive taxes on investment gains made from cryptocurrencies as well as other alternative assets for hedge funds, private equity funds and various family offices as the city-state aims to improve its attractiveness as a wealth management center.
In a consultation paper issued this past week, and reviewed/cited by Reuters, the Financial Services and the Treasury Bureau has suggested further expanding the capital gains tax exemptions in order to cover international properties, carbon credits, private credit, digital assets, along with various other assets. This is reportedly applicable to privately-offered funds and qualified single family offices’ investment vehicles.
The proposal noted that taxation is one of the key considerations for the wealth asset management sector “to decide where to base their operations.” It also mentioned that the government was focused on to developing an environment that’s quite supportive of the wealth management sector (the FT had initially reported the proposal).
Hong Kong has reportedly been increasing its focus to promote the city as a major global digital asset hub, with the goal to securing additional sources of capital. This comes amid various economic challenges and other issues between China and the Western world.
The proposal has been unveiled as Bitcoin (BTC), the flagship cryptocurrency surged to all-time highs and now the leading digital currency is setting its sights on the psychologically critical $100,000 mark. This is accompanied by expecations that U.S. President-elect Donald Trump‘s administration will establish a progressive/clear set of regulatory guidelines for cryptocurrencies.
Notably, Hong Kong is one of Asia’s most prominent hedge fund hubs and ranked second overall when it comes to total capital under management in private equity funds, available data reveals.
Currently, there are reportedly over 2,700 single‑family offices doing business in Hong Kong (more than half of which claim to have assets of over $50 million, according to HK government figures, referencing current market data).
The proposal further proposed extending the tax exemption in order to cover pension funds as well as endowment funds.