The Inland Revenue (Amendment) (Preferential Tax Regimes for Funds, Family-owned Investment Holding Vehicles and Carried Interest) Bill 2026 was gazetted on 12 Jun 2026 to enhance tax regimes and attract funds to Hong Kong.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
SPOTLIGHT ON
FAMILY OFFICES
Legislative Announcement and Objective
On 12 Jun 2026, the Government gazetted the Inland Revenue (Amendment) (Preferential Tax Regimes for Funds, Family-owned Investment Holding Vehicles and Carried Interest) Bill 2026. This legislation seeks to enhance preferential tax regimes for privately offered funds, Family-owned Investment Holding Vehicles ("FIHVs") managed by eligible single family offices, and carried interest, aiming to attract more funds and family offices to establish a presence in Hong Kong. Issued at HKT 12:00.
Statutory Amendments and Compliance Requirements
Key amendments to the Inland Revenue Ordinance include expanding the definition of 'fund' and qualifying investments, removing the 5 per cent threshold for incidental transactions, and relaxing tax exemption treatments for special purpose entities ("SPEs") and family-owned SPEs. Additionally, enhancement measures for the carried interest tax regime will be implemented. Under the unified tax regime for funds, the Bill introduces a tax reporting mechanism and economic substance requirements mirroring those applicable to FIHVs.
Government Position and Economic Implications
A Financial Services and the Treasury Bureau spokesperson stated that Hong Kong is currently the world's largest cross-boundary wealth management centre. This status is supported by the National 15th Five-Year Plan, which endorses Hong Kong's role as an international asset and wealth management ("WAM") centre. The Government remains committed to reinforcing its leading position through a competitive tax environment, with the Bill's amendments designed to attract funds and family offices, thereby creating new opportunities for the WAM industry. These measures are expected to attract private credit investment activities while complementing developments in digital assets and the trading of precious metals and commodities.
Legislative Timeline
The Bill is scheduled for introduction into the Legislative Council for first reading on June 24.
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