Around 300 global bankers arrived in Hong Kong in November, from big names including Goldman Sachs, Morgan Stanley, HSBC, Standard Chartered, Citigroup, UBS and JPMorgan Chase, for the second global financial leaders’ investment summit, a two-day conference organised by the Hong Kong Monetary Authority, the city’s de facto central bank. The purpose of the event was to allow bankers from across the globe “to feel the energy, the vibrancy and also see the opportunities here,” according to the HKMA’s chief executive, Eddie Yue.
He said: “There are still misguided perspectives overseas about what happens in Hong Kong. Some of our friends in the US and Europe ask if it is safe to walk in the streets. It is important to bring people together to see Hong Kong so they see the momentum is gradually coming back.”
Hong Kong, like mainland China, may still be facing a challenging business environment post-Covid, but there are still plenty of investment opportunities, analysts are saying. In particular, Hong Kong’s government is making huge efforts to attract ultra-high-net-worth individuals to the city, to set up operations to pursue investment, philanthropy and succession planning. Hong Kong is already home to the second-largest population of billionaires in the world, beaten only by New York. However, John Lee Ka-chiu, the city’s chief executive, has set a target of attracting 200 new family offices to Hong Kong by 2025. One advantage Hong Kong has over rivals is that it does not require family offices to move their overseas assets to the city. According to Paul Knox, managing director, senior wealth adviser at JPMorgan Private Bank Asia, “this makes it very easy for clients to relocate to Hong Kong, leaving their asset holding structure as it is at the moment without needing to readjust it. As such, the level of interest is very significant.”
Ada Ma Man-shan, partner of tax services at EY, speaking at a financial forum in the city in September, said: “We have a very friendly tax regime in Hong Kong, as single family offices in Hong Kong do not need to get a licence, while in Singapore they still need to get approval from the authorities.”
Singapore, Hong Kong’s main rival for attracting ultra-high-net-worth operators, insists family offices must invest at least 10 percent of their assets under management in listed entities or start-ups in Singapore itself. Hong Kong, however, does not require family offices to invest in local markets. In recent times, Hong Kong has seen billionaires from the US, UK, Australia, Canada and the Middle East who want to set up family offices in Hong Kong.
However, if family offices did want to invest in Hong Kong, there are plenty of opportunities. Last year the city set up the Office for Attracting Strategic Enterprises to attract high potential enterprises from around the globe. It is now expecting to get $3.8bn in foreign investment from 30 ‘strategic’ firms, which will create create some 10,000 jobs in the city in fields such as life sciences, biotech, fintech, data sciences and advanced manufacturing, according to Hong Kong’s Financial Secretary, Paul Chan Mo-po.
Hong Kong’s government is making HUgE efforts to attract ultra-high-net-worth individuals to the city
Speaking at the annual forum of the Hong Kong Green Finance Association in October, Chan said: “We have set sights on attracting strategic enterprises, those with cutting edge technologies, to settle here in Hong Kong so we can create a more vibrant ecosystem.”
The city – technically the Hong Kong Special Administrative Region – has a government department, Invest Hong Kong, designed to work with overseas entrepreneurs looking to set up an office. It offers support with business licences, visa applications, trademark registration, and intellectual property and trade regulations, as well as support with the basics of living and working in Hong Kong, such as setting up bank accounts, and arranging housing, healthcare and schooling. Foreign firms can participate in government-financed and subsidised research and development programmes, and the city has no prohibitions on foreign investment in any sector of the economy.
In 2021, the latest year for which figures are available, assets and wealth managed in Hong Kong totalled $4.6bn, almost two thirds of it coming from non-Hong Kong investors. Open-ended fund companies as well as onshore and offshore funds are offered a profits tax exemption to encourage them to come to the city. There are a number of organisations looking to match up potential investors with businesses looking for funds, such as the Angel Investment Network. Business angels overseas can search the Angel Investment Network Hong Kong website to find business opportunities in Hong Kong in a wide range of market sectors.