Hong Kong family office tax concession: what it offers

Which vehicles can claim the Hong Kong family office tax concession?

The concession applies to a family-owned investment holding vehicle, called an FIHV, which can be a company, a partnership or a trust, including a discretionary trust. It taxes qualifying profits at 0% for years of assessment starting on or after 1 April 2022. The amending law came into operation on 19 May 2023 (Inland Revenue Department, 2026).

The vehicle holds investments for one or more members of a single family and carries out its core income generating activities in Hong Kong. A business that trades for general commercial or industrial purposes sits outside the concession. The sections below follow the order in which most advisers test a case: family, ownership, office, assets, substance and final checks. Each one ends with a record that you can add to the file.

Who counts as family under the Hong Kong concession?

The law starts from one person and builds the family around that person. It includes a spouse, the lineal ancestors of the person or the spouse, lineal descendants, siblings of those people, the descendants of those siblings and the spouses of descendants and siblings. Adopted children and step-children of a spouse count as descendants.

A former spouse stays in the family for the year of assessment in which the marriage ends and for the next year. Draw a family tree before you design the structure, and mark each person who will hold an interest. The tree becomes the first document in the file you share with advisers, and it shows at a glance which relatives sit inside the concession.

How much of a Hong Kong family office vehicle must the family own?

Family members hold, in aggregate, at least 95% of the beneficial interest in the vehicle at all times during the basis period. The interest can be direct or indirect. Track ownership through every layer of companies and trusts, and update the record whenever a transfer, a gift or an inheritance occurs. A single gap in the 95% test during the basis period affects the result for that year.

A charitable entity that is tax exempt can hold up to 25% of the interest, provided family members hold at least 75% and unrelated persons hold at most 5% combined. This rule lets a family include a foundation in the structure while the vehicle keeps its family character. Agree the charity share in writing, so every family branch knows the limit.

What must the eligible single family office do for the vehicle?

An eligible single family office is a private company, managed or controlled in Hong Kong, at least 95% owned by family members, that provides services to the family vehicles for a fee. At least 75% of its assessable profits come from services to specified persons, which include related vehicles and family members.

The office carries out the investment activities: research and advice on investments, acquiring, holding, managing and disposing of property, and setting up or running family special purpose entities. One eligible office can serve up to 50 vehicles that benefit from the concession, which suits families with several branches, each holding its own vehicle under one roof and one team.

Which assets count toward the HK$240 million floor for a family office?

The eligible office manages specified assets with an aggregate net asset value of at least HK$240 million for the family’s vehicles. The list includes securities, private company shares and debentures, funds, futures, foreign exchange contracts, bank deposits, certificates of deposit, exchange-traded commodities, foreign currencies and over-the-counter derivatives.

A year with a lower value can still meet the floor if the aggregate reached HK$240 million at the end of either of the 2 preceding basis periods. Assets held by a family special purpose entity count toward the total. Keep a valuation schedule so the office can show the figure at each year end, with the source of each price and the date of each valuation.

What local substance does a Hong Kong family office vehicle need?

The vehicle needs at least 2 full-time qualified employees in Hong Kong who carry out the relevant activities, and at least HK$2 million of operating expenditure incurred in Hong Kong. The Department weighs the facts as a whole instead of applying a mechanical formula.

Outsourcing to the eligible office is allowed when it serves a real purpose. Transactions in specified assets qualify, and incidental transactions qualify while their receipts stay within 5% of total trading receipts. Qualifying transactions run in Hong Kong by or through the eligible office, or arrive there by its arrangement. Document where each decision was taken and by whom, since that record supports the local substance.

How can a family check a Hong Kong concession claim before filing?

The vehicle elects the concession in writing, the election applies to all later years and it cannot be revoked. Losses from exempt transactions cannot offset other assessable profits. A main purpose rule withdraws the concession when an arrangement aims at a tax benefit, so each step needs a business reason.

A vehicle can apply to the Commissioner for an advance ruling, with the family tree, a group chart, details of staff and assets and a draft profit and loss account. Keep ownership records ready at all times. This page is general information, not legal, tax or investment advice, as of October 2026. A 30-minute pre-diagnostic with EQOS Asia can place your case within the wider family office in Singapore series (EQOS Asia private page, 2026).

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About the author

Stéphane Jambu

President, EQOS Forecast Asia

Stéphane Jambu leads EQOS Forecast Asia and works as a consultant in e-commerce, search visibility, and AI. LinkedIn profile