When investors evaluate Hong Kong as a business destination, they often focus on the present day – its legal system, its global connectivity and infrastructure and its role as a gateway to mainland China. But what is often overlooked is the financial market infrastructure that allows capital to move, settle and clear with speed, reliability and legal certainty and that underlies its future potential. As China steadily pushes forward its ambitions to internationalise its currency, the renminbi, this foundation places Hong Kong at the centre of a growing shift in the monetary order
If you’d like more information about Hong Kong, please contact one of our Corporate Financelawyers.
"Leading Practice"
"Exceptionally Talented"
"The Choice for Sophisticated Clients"
"Leading Lawyer"
"Leading Practice"
"Global Leader"
Table of Contents
Hong Kong Cements Its Status As A Premier Financial Hub
For more than 150 years, Hong Kong has served as the world's gateway to China. What began as the trade of physical goods has evolved into a sophisticated two-way flow of capital, intellectual property and talent, yet throughout this period the city’s role as an indispensable intermediary remained...
Insurance Linked Securities: Hong Kong’s Insurance (Amendment) Ordinance 2020
The Insurance Amendment Ordinance 2020 enables Hong Kong insurers to issue insurance linked securities through special purpose business captives
Hong Kong Grant Scheme for Insurance Linked Securities
A new grant scheme aims to position Hong Kong as a global hub for the issuance of insurance linked securities by subsidising issuance costs
Insurance Linked Securities - Extension of Hong Kong Grant Scheme
In its Hong Kong 2023-24 Budget, the Financial Secretary announced an extension of its insurance-linked securities (“ILS”) grant scheme for a further 2 years.
SPOTLIGHT ON
FAMILY OFFICES
Table of Contents
Banking
Already one of the world's most internationally connected banking centres, Hong Kong hosts more than 70 of the world's 100 largest banks present in the city, and 15 of the 29 globally systemically important banks headquartered here for the region. This means that a transaction originating in Frankfurt, São Paulo, or Johannesburg can reach Hong Kong through a single, reliable chain of counterparties operating under a well-established regulatory framework.
Through SWIFT, Hong Kong financial institutions exchange messages with counterparties globally, enabling cross-border payments, trade finance, and securities settlement to flow through standardised, secure channels. Through access to CHIPS, the U.S. high-value dollar clearing network operated out of New York, Hong Kong-based banks can settle U.S. dollar transactions with the full confidence of the world's most liquid clearing system.
SWIFT and CHIPS aside, Hong Kong operates its own multi-currency Real-Time Gross Settlement (RTGS) system under the oversight of the Hong Kong Monetary Authority (HKMA). Hong Kong runs RTGS systems in Hong Kong dollars, U.S. dollars, euros and renminbi. The Hong Kong dollar system alone processes an average daily value of HK$1,441 billion (US$184 billion).
Moreover, helping underpin the city’s connectivity with mainland China is Hong Kong’s status as the world's largest offshore renminbi clearing hub, handling 2-3 trillion renminbi (US$290-440 billion) in daily payments turnover, and 15 trillion renminbi in annual trade settlement. These flows are supported by the Cross-Border Interbank Payment System (CIPS), a China central bank backed payment and clearing system linking accredited financial institutions in Hong Kong and mainland China.
“For any institution that needs to move renminbi across borders, for trade, investment, or treasury purposes, Hong Kong is the natural home for that activity,” says Managing Partner Timothy Loh.
According to SWIFT data, RMB accounted for 6% of international trade transactions in May 2026, ranking third among currencies globally, and Hong Kong sits at the centre of that flow. That weighting should only grow given efforts by many countries and commodity traders to diversify away from the U.S. dollar payment system. Among ideas is a renewable yuan where green energy components manufactured in China are priced and settled in renminbi. Another trend is the expansion of oil trading using renminbi contracts.
Hong Kong Dollar Capital Markets
Infrastructure today bridges the US dollar and renminbi gap, allowing securities trading between Hong Kong and mainland China. The Stock Connect platform, involving Hong Kong, Shanghai and Shenzhen’s stock exchange operators, created a closed loop trading platform that enables international traders to trade Chinese equities and China-based investors to trade Hong Kong-listed stocks. The model manages to work despite each market having slightly different trading and settlement rules.
“Stock Connect speaks to Hong Kong’s can-do attitude to solving a seemingly intractable problem,” says Timothy Loh. “A lot of people thought it wouldn’t work. Instead, it has been a huge success to the benefit of both Chinese and international investors.”
The same can be said of Bond Connect, which links cross-border debt securities markets.
RMB Capital Markets
As the renminbi gains traction is a currency for international trade, HKMA’s Central Moneymarkets Unit (CMU), Hong Kong's central securities depository for debt instruments, provides the infrastructure for renminbi denominated debt capital markets instruments that can be used to park and deploy renminbi holdings. The CMUprovides delivery-versus-payment settlement for bonds denominated in various currencies and links directly to Euroclear and Clearstream, giving international investors seamless access to Hong Kong’s bond market.
“Financial infrastructure is ultimately about trust,” says Gavin Cumming, Partner and Head of London at Timothy Loh. “When capital moves through a system that settles in real time, operates under statutory oversight, links to both Western and Chinese payment architectures, and provides legal finality on every transaction, the message to investors is clear: your assets are safe here, and your transactions will complete.”
