For a global family office, choosing a base of operations is a multi-generational decision. Hong Kong has long been a premier contender, offering a unique bridge between East and West. But in today’s landscape of geopolitical shifts and evolving tax transparency, is its allure still compelling? The answer lies not in simple pros and cons, but in a strategic assessment of trade-offs that align with your family’s specific assets, risk tolerance, and long-term vision.

The Enduring Advantages: Hong Kong’s Strategic Value Proposition

Hong Kong’s core fiscal advantages remain powerful. The territory does not tax capital gains, dividends (with no withholding), interest in most cases, or inheritance. This creates a highly efficient environment for managing and growing investment portfolios. The corporate profits tax operates on a two-tiered system: the first HK$2 million of assessable profits is taxed at 8.25%, with the remainder at 16.5% (for unincorporated businesses, rates are 7.5% and 15% respectively).

Beyond the tax code, Hong Kong’s true value lies in its ecosystem. Its common law legal system, deep capital markets, and bilingual professional services provide a high-trust, high-efficiency platform. For families with significant exposure to Mainland China and broader Asia, Hong Kong’s connectivity is unmatched, facilitating faster deal execution and deeper market access.

The Family Investment Holding Vehicle (FIHV) Regime

A key development for family offices is Hong Kong’s dedicated FIHV regime. To qualify for a 0% tax rate on eligible income (like dividends and interest), the vehicle must have at least HK$240 million in assets under management and employ enough qualified professionals in Hong Kong to conduct its core income-generating activities. This is a clear signal: Hong Kong welcomes substantive family offices, not shell companies.

Navigating the New Compliance Landscape

The era of purely passive holding structures is over. Hong Kong has implemented global standards that require real economic presence.

Furthermore, Hong Kong has enacted the Global Minimum Tax under OECD Pillar Two, effective 1 January 2025. This imposes a 15% minimum effective tax rate on large multinational enterprise (MNE) groups with consolidated revenue of €750 million or more. Family offices that are part of such groups must prepare for this additional compliance layer, which includes the Hong Kong Minimum Top-up Tax (HKMTT).

The Geopolitical and Operational Calculus

Any assessment must acknowledge the geopolitical context. Since 2020, factors like the National Security Law have altered the risk perception for some international families and professionals, impacting talent retention and recruitment in the financial sector. This creates both a challenge and, for some, an opportunity.

The “Singapore vs. Hong Kong” debate is often oversimplified. The smarter approach for many global families is a bifurcated or multi-hub model. Hong Kong can serve as the execution hub for Asia-Pacific investments, leveraging its tax treaties and market access, while another jurisdiction might handle long-term governance, legacy planning, or assets in other regions.

Stamp Duty Simplification: A Boost for Asset Holding

A significant and recent positive development is the abolition of all additional stamp duties on property transactions as of 28 February 2024. The Special Stamp Duty (SSD), Buyer’s Stamp Duty (BSD), and New Residential Stamp Duty (NRSD) have been removed. Property transfers are now only subject to the standard Ad Valorem Stamp Duty, which scales from 1.5% to a maximum of 4.25% for the most expensive properties. This reduces complexity and cost for family offices considering Hong Kong real estate as part of their asset allocation.

Hong Kong demands a clear-eyed strategy. It rewards families who actively engage with its dynamic ecosystem and comply with its evolving international standards. The question is not whether Hong Kong is “good” or “bad,” but whether its unique combination of fiscal efficiency, Asian market access, and now stringent substance requirements aligns with your family’s specific assets, operational preferences, and risk appetite. For those with a substantive, Asia-centric investment focus, it remains a powerful and potentially irreplaceable base.