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

In 2016, the question everyone in wealth management was asking was whether automated advisers would displace the private banker. It turned out to be the wrong question. 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.

That model is older than the industry it is replacing. The Medici did not engage a wealth manager; they were one: a family that ran its own capital, its own ledgers and its own patronage from Florence, and whose bank thrived exactly as long as the family kept real control of the branches and failed when it stopped minding them. Every serious family office regime since is an attempt to legislate for that lesson: the privileges go to families genuinely running the operation, not lending their name to one.

By the end of 2025 there were over 3,380 single family offices operating in Hong Kong (up roughly a quarter in two years) and Hong Kong now has a tax regime built for them. 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, applying from the year of assessment beginning on or after 1 April 2022. The concessionary profits tax rate on a qualifying family-owned investment holding vehicle's profits 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 "entity" covers bodies corporate and unincorporate and legal arrangements (expressly including a corporation, a partnership and a trust, discretionary trusts among them) and 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. Family members must hold at least 95% of the beneficial interest, 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 generational cap, adopted and step-children included. A charitable entity may hold up to 25%, provided family members hold at least 75% and unrelated persons no more than 5% — the Medici would have recognised the patronage clause.

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% family-owned, drawing at least 75% of its assessable profits from services to specified persons of the family.

The three hard numbers. At least HK$240 million of specified assets under Schedule 16C managed by the office for the family's FIHVs. At least HK$2 million of operating expenditure incurred in Hong Kong on the relevant activities. At least two full-time, qualified employees in Hong Kong carrying them out.

Two limits people miss. The 50-FIHV cap runs per office, not per family. And the election into the regime is written, applies to all subsequent years, and is irrevocable.

The licensing question

The question families put to us most often is whether the office needs a licence from the Securities and Futures Commission. In general, a genuine single family office does not. Where it serves only related entities, it sits inside the intra-group carve-out from Type 9 regulated activity; more broadly, the SFC has said that a genuine single family office arrangement not 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 discretion over unrelated families' assets is in a different position, and would likely need the licence.

Which regime, and why it matters

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

The unified fund exemption (sections 20AM–20AY, in operation since 1 April 2019) is an exemption, not a concessionary rate. No minimum assets, no ownership test, no employee or spending floor. What it requires is that the arrangement meets the statutory definition of a "fund", and that qualifying transactions are carried out or arranged in Hong Kong by a specified person (an SFC-licensed corporation or registered institution) unless the fund is a qualified investment fund.

The FIHV concession requires no licensed manager; an unlicensed family office suffices. In exchange: HK$240 million, HK$2 million, two employees, the 95% test, the irrevocable election. That is the real trade. The regimes 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 — worth checking before electing into anything irrevocable.

Against Singapore

Singapore's section 13O asks for S$20 million of designated investments and two investment professionals; 13U asks for S$50 million and three, one of them from outside the family. Both carry tiered local business spending (S$200,000 rising to S$1 million with assets) and a capital deployment requirement (the lower of S$10 million or 10% of assets into Singapore-linked investments) with applications approved by the Monetary Authority of Singapore. Over 2,000 single family offices held Singapore incentives at the end of December 2025, against Hong Kong's 3,380 operating.

Hong Kong's headline threshold is higher, but the structure differs where it matters: no requirement to deploy capital into Hong Kong assets, no restriction on where investments sit, and 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 money 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 net investment of HK$30 million: HK$27 million in permissible assets, 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, residential capped at HK$10 million and only via 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. 3,166 applications had been received by the end of February 2026.

What is not yet law

One qualification we would rather state than have a family discover. 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, first reading 24 June. It proposes widening "fund" to cover certain single-investor arrangements; adding digital assets, precious metals, specified commodities, private credit and overseas immovable property to the qualifying list; removing the 5% cap on incidental transactions; and introducing an economic substance requirement and 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 from 1 April 2025 — but that depends on passage, and the Department's accommodation allowing 2025/26 returns to be filed on the proposed basis is an accommodation, not a guarantee. Multi-family offices remain outside the concession, with the Government saying only that extension needs study; the proposed 20% cap on precious metals is itself under review. If you are planning around the expanded regime, plan on the basis that it is a Bill.

The Florentine test

The concession is not a discount for having money; it is a discount for running it properly from here — real people, real premises, real books, really in Hong Kong. The Medici bank did not fail for lack of assets under management. It failed when the family stopped doing the work. Hong Kong will price the work at zero. The work is still the condition.

Frequently asked questions

What does Hong Kong's family office tax concession require?

A 0% profits tax rate on qualifying profits, on five main conditions: at least HK$240 million of specified assets managed by an eligible single family office for the family's investment holding vehicles; at least HK$2 million of annual operating expenditure in Hong Kong; at least two full-time qualified employees in Hong Kong; family members holding at least 95% of the beneficial interest; and the vehicle normally managed or controlled in Hong Kong. The election into the regime is written, applies to all subsequent years, and is irrevocable.

Does a single family office in Hong Kong need an SFC licence?

In general, no. A genuine single family office serving only related entities sits inside the intra-group carve-out from Type 9 regulated activity, and the SFC has said an arrangement not 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 discretion over unrelated families' assets is in a different position and would likely need the licence.

How does Hong Kong's family office regime compare with Singapore's?

Hong Kong asks for more money and leaves the portfolio alone; Singapore asks for less money and more local commitment. Hong Kong: HK$240 million in assets, HK$2 million local spend, two employees, no capital deployment requirement, no approval gate (self-assessed). Singapore's 13O: S$20 million and two investment professionals; 13U: S$50 million and three — both with tiered local business spending and a requirement to deploy the lower of S$10 million or 10% of assets into Singapore-linked investments, approved by MAS. At end-2025, Hong Kong had over 3,380 single family offices operating against Singapore's 2,000+ holding incentives.

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This article is general information about Hong Kong tax and regulatory law as at August 2026, not advice on any particular family's circumstances — the choice between regimes turns on facts. Jefferson Trust Limited holds TCSP licence TC005824; enquiries: [email protected].