Hong Kong Fund Structures in 2026: the OFC and the LPF, the SFC Grant Scheme and the 2026 Bill

Hong Kong offers two domestic fund vehicles: the open-ended fund company (OFC), a corporate structure with variable capital and segregated sub-funds, and the limited partnership fund (LPF), a contractual structure built for private equity and venture capital. As at July 2026 the Companies Registry recorded 765 OFCs and 1,842 LPFs. Both rely on the unified funds exemption in section 20AN of the Inland Revenue Ordinance (Cap. 112), but the conditions differ — and only an OFC can access the Government grant administered by the SFC.

Important. The decisive fork is not “OFC or LPF” but whether the investment strategy falls inside the asset classes listed in Schedule 16C. For an LPF, stepping outside that list means losing the exemption on the transactions concerned. For an OFC, section 20AN(2)(c) delivers a unique extension — the exemption reaches assets outside Schedule 16C as well — but it is conditioned on continued SFC registration and compliance with the Code on Open-ended Fund Companies. The second key point: the Bill gazetted on 12 June 2026 rewrites almost the whole tax perimeter — widening the definition of “fund”, widening the list of qualifying investments, removing the 5% incidental transactions threshold and introducing economic substance requirements. As at August 2026 it has not been passed.

The Legal Framework: Three Independent Layers

The subject sits across three layers — the OFC corporate layer, the LPF corporate layer and the tax layer common to both. They must not be conflated: registering a fund and establishing its tax status are decided by different authorities under different statutes.

Layer one — the OFC (regulator: the Securities and Futures Commission; register kept by the Companies Registry):

•          Part IVA of the Securities and Futures Ordinance (Cap. 571), inserted by the Securities and Futures (Amendment) Ordinance 2016 (Ord. No. 16 of 2016), gazetted on 10 June 2016. The OFC regime commenced on 30 July 2018. Key sections: 112C (registration), 112I (registered office), 112S (segregated liability of sub-funds), 112U and 112V (directors), 112Z (investment manager), 112ZA (custodian), 112ZB (auditor), 112ZJA–112ZJE (re-domiciliation).

•          Securities and Futures (Open-ended Fund Companies) Rules (Cap. 571AQ) — L.N. 97 of 2018.

•          Securities and Futures (Open-ended Fund Companies) (Fees) Regulation (Cap. 571AR) — L.N. 98 of 2018, made on 14 May 2018 under section 112ZQ.

•          Code on Open-ended Fund Companies — the edition in force is the September 2020 edition, effective 11 September 2020.

•          Securities and Futures (Open-ended Fund Companies) (Amendment) Rules 2025 (L.N. 18 of 2025) — enabling listed OFCs to participate in the uncertificated securities market regime; commencing 16 November 2026.

A source trap worth knowing about. The SFC’s files-current directory, at the obvious URL, still serves the superseded July 2018 edition of the Code, which contains the repealed investment-scope restriction on private OFCs (the 90% gross asset value test). The text in force is the file suffixed _EN_Sept_2020_new.pdf. Any publication repeating the rule that “at least 90% of a private OFC’s assets must be Type 9 asset types” is working from text repealed on 11 September 2020.

Layer two — the LPF (registrar: the Registrar of Companies; the SFC plays no part in registering the fund itself):

•          Limited Partnership Fund Ordinance (Cap. 637) — Ord. No. 14 of 2020, passed by the Legislative Council on 9 July 2020 and commenced on 31 August 2020 (the gazettal date could not be confirmed from a primary source). Key sections: 3 (meaning of “fund”), 7 (eligibility for registration), 8–9 (name), 15 (no legal personality), 16–17 (freedom of contract and solvency), 18 (registered office), 19–23 (general partner, investment manager, auditor, custody arrangements, authorized representative), 24–25 (annual return and notifications), 26–27 (limited partner and the safe harbour), 29–31 (records), 33–39 (AML/CTF responsible person), 82A–82F (re-domiciliation).

•          Limited Partnerships Ordinance (Cap. 37) — the older partnership regime, which continues in parallel; the LPF is an opt-in regime, not a replacement.

Layer three — tax (Inland Revenue Department):

•          Inland Revenue (Profits Tax Exemption for Funds) (Amendment) Ordinance 2019 — Ord. No. 5 of 2019, gazetted 1 March 2019, in operation 1 April 2019. It introduced sections 20AM–20AY and Schedule 16C. It replaced three earlier regimes: the offshore funds exemption (section 20AC), the offshore private equity funds exemption (section 20ACA) and the separate OFC exemption (section 20AH).

•          Inland Revenue (Amendment) (Tax Concessions for Carried Interest) Ordinance 2021 — Ord. No. 9 of 2021, gazetted 7 May 2021; Schedule 16D; applies to carried interest received or accrued on or after 1 April 2020.

•          Inland Revenue (Amendment) (Tax Concessions for Family-owned Investment Holding Vehicles) Ordinance 2023 — Ord. No. 8 of 2023, gazetted and in operation 19 May 2023; Schedule 16E; applies from 1 April 2022.

•          DIPN 61, “Profits Tax Exemption for Funds”, June 2020 — the Department’s practice note on the unified funds exemption. Note the date: it was issued three months before the current edition of the Code on Open-ended Fund Companies and has not been revised since.

•          Inland Revenue (Amendment) (Preferential Tax Regimes for Funds, Family-owned Investment Holding Vehicles and Carried Interest) Bill 2026 — gazetted 12 June 2026, first reading 24 June 2026. Not passed as at August 2026.

Author’s assessment: the Ordinance number for the family office regime is frequently misquoted. It is Ord. No. 8 of 2023, not No. 10 — per the Inland Revenue Department’s own table of amending Ordinances.

A note on source access. The official e-legislation portal elegislation.gov.hk is closed to automated access, so parts of the text below were additionally cross-checked against the Gazette copies hosted by the Inland Revenue Department and the Companies Registry, instruments hosted by the SFC, and Legislative Council papers hosted by the FSTB. Every load-bearing provision in this article — Schedule 2 and sections 27, 65 and 67 of Cap. 637, rules 20, 102 and 158 of Cap. 571AQ, Schedules 1 and 3 to Cap. 571AR, sections 20AS and 20AX and Schedules 16E and 61 to Cap. 112 — was read directly against the consolidated e-Legislation text in the version in force, with the point-in-time date recorded in the source list. e-Legislation versions marked with an asterisk are non-verified published versions: they carry the text in force but not the legal status of a verified copy under Cap. 614.

What an OFC Is, and How Sub-Funds Differ from Share Classes

An open-ended fund company is a variable capital corporation established under Part IVA of the Securities and Futures Ordinance (Cap. 571), whose shares are issued and redeemed at investor demand and whose assets may be divided among segregated sub-funds. An OFC is a legal entity; it is registered by the SFC and incorporated by the Companies Registry.

The structure solves two problems an ordinary Hong Kong company cannot. The first is variable capital: the Companies Ordinance (Cap. 622) constrains distributions and share buy-backs, whereas an open-ended fund needs to issue and redeem interests daily. The second is segregation: an umbrella structure must insulate one strategy’s liabilities from another strategy’s assets.

Segregated liability between sub-funds is statutory, not contractual. Section 112S of the Securities and Futures Ordinance provides for segregated liability; rule 158 of the OFC Rules (“Implied terms implied in contracts with open-ended fund company with sub-funds”) supplements it. The practical effect: as a matter of Hong Kong law, the liabilities of sub-fund A do not reach the assets of sub-fund B.

Rule 158 implies three terms into every contract, agreement, arrangement or transaction entered into by an umbrella OFC, and they operate at three different stages:

Rule 158 paragraph	Implied term	When it bites
(a)	The counter­party agrees not to seek, in any proceed­ings or by any other means, recourse to the assets of any sub-fund in discharge of a liability not incurred on behalf of that sub-fund	Before enforce­ment: a contrac­tual bar
(b)	If the counter­party nonetheless succeeds in obtaining recourse to such assets, it is liable to pay the company a sum equal to the value of the benefit obtained	After recourse: a restitu­tionary obliga­tion
(c)	If the counter­party succeeds in seizing, attaching or otherwise levying execution against a sub-fund’s assets for a liability not incurred on its behalf, it holds those assets, or the direct or indirect proceeds of their sale, on trust for the company and must keep them separate and identifiable as trust property	On enforce­ment: a construc­tive trust

Author’s assessment: paragraph (c) is the strongest of the three, because a trust ranks ahead of the counterparty’s unsecured creditors, whereas paragraph (b) creates only a claim.

A qualification the SFC itself requires to be disclosed to investors. Paragraph 4.2(d) of the Code on Open-ended Fund Companies requires an umbrella OFC’s offering document to warn that “while section 112S of the SFO provides for segregated liability between sub-funds, the concept of segregated liability is relatively new” and that it is uncertain how “foreign courts will react to section 112S”. In other words, segregation is reliable in Hong Kong and not guaranteed outside it — which matters for funds holding assets or facing counterparties in third countries.

No maximum number of sub-funds is prescribed. Author’s assessment: the claim that the maximum number of OFC sub-funds was increased in 2020 does not survive checking — neither Part IVA, nor the OFC Rules, nor the Fees Regulation, nor either edition of the Code, nor the SFC’s consultation materials contains such a cap, and the Fees Regulation charges per sub-fund with no ceiling. The claim can now be treated as disproved rather than merely unverified: the consolidated text of Cap. 571AQ has been read in full and contains no cap on the number of sub-funds.

An OFC has no company secretary and files no annual return with the Companies Registry. The Companies Registry FAQ confirms it: unlike a company incorporated under the Companies Ordinance, an OFC need not appoint a company secretary, does not report share capital information, does not register charges and does not deliver annual returns. An OFC’s administrative burden is lighter than an ordinary Hong Kong company’s — but its regulatory burden is heavier, because almost every change requires SFC approval.

Public and Private OFCs: Where the Line Runs

A public OFC is offered to the public in Hong Kong and requires SFC authorisation under section 104 of the Securities and Futures Ordinance; a private OFC is not authorised and is subject to the lighter requirements of Section II of the Code on Open-ended Fund Companies. The difference runs along three lines: investment scope, custodian and fees.

A private OFC’s investment scope has been unrestricted since 11 September 2020. Before that date, Chapter 11 of the July 2018 Code required at least 90% of the gross asset value of a private OFC to consist of asset types the management of which constitutes Type 9 regulated activity, leaving no more than 10% for anything else. The September 2020 edition abolished that restriction. A public OFC remains subject to the investment restrictions of the Code on Unit Trusts and Mutual Funds. Bear in mind that this Code is itself under review: SFC consultation paper 25CP10, “Proposed Amendments to the Code on Unit Trusts and Mutual Funds” (October 2025), proposes changes on value-at-risk for derivatives, liquidity risk management, anti-dilution tools and money market funds; comments closed on 21 January 2026 and the conclusions had not been published at the date of writing.

Author’s assessment: it was the abolition of the 90/10 test that made the OFC usable for private equity and real asset strategies — before September 2020 such a structure was practically impossible. Publications describing the OFC as a vehicle “limited to securities, derivatives and cash with a 10% cap on alternative assets” are six years out of date.

The custodian requirements differ materially. For a public OFC, paragraph 7.1(a) of the Code requires the custodian to meet the same eligibility requirements as a trustee or custodian of an SFC-authorised fund under the Code on Unit Trusts and Mutual Funds. For a private OFC, paragraph 7.1(b) offers two routes: either those same requirements, or — since September 2020 — a licensed corporation or registered institution licensed or registered for Type 1 regulated activity, provided all five of the following hold:

•          the licence is not subject to a condition prohibiting it from holding client assets;

•          it maintains paid-up share capital of not less than HK$10 million and liquid capital of not less than HK$3 million;

•          the private OFC is, and remains at all times, a client of that corporation;

•          it has at least one responsible officer or executive officer accountable for the overall management and supervision of the custodial function;

•          it is independent of the investment manager.

A custodian is always mandatory for an OFC. Section 112ZA of the Securities and Futures Ordinance requires all scheme property to be entrusted to the custodian for safe keeping. Multiple custodians are permitted, including a different custodian for each sub-fund, and a custodian may delegate to sub-custodians.

A public OFC pays no separate registration fee — it pays product authorisation fees instead. That scale sits in the Securities and Futures (Fees) Rules (Cap. 571AF) and is set out in the next section.

OFC Requirements: Board, Type 9 Manager, Custodian, Auditor

An OFC must have at least two directors who are natural persons, an investment manager licensed or registered for Type 9 regulated activity, a custodian, an independent auditor and a registered office in Hong Kong.

The board: a minimum of two, natural persons only, at least one independent. Section 112U of the Securities and Futures Ordinance: “An open-ended fund company must have at least 2 directors.” Section 112V: “A body corporate must not be appointed a director of an open-ended fund company.” Paragraph 5.2 of the Code: “The board of directors of an OFC must have at least one independent director” — and the independent director may not be a director or employee of the custodian.

There is no residency requirement for directors — but a non-resident director needs a process agent in Hong Kong. Rule 102 of the OFC Rules requires a process agent for a director whose usual residential address is outside Hong Kong; paragraph 4.3 of the Code requires the SFC to be informed of process agents on registration and within 14 days of any change. Notification is on Form OFCD1(SFC).

Every director appointment requires SFC approval, with a HK$300 fee.

The investment manager must hold a Type 9 licence or registration — a statutory requirement, not a code requirement. Section 112Z: the investment manager “must be an intermediary licensed or registered for Type 9 regulated activity”. A bank registered with the SFC for Type 9 as a registered institution also qualifies.

Paragraph 6.2A of the Code applies the whole conduct framework to the manager — the Fund Manager Code of Conduct, the Code of Conduct, the Management and Supervision Guidelines and the AML/CFT Guidelines — “as if conducting Type 9 regulated activity” in respect of all the OFC’s investment management functions. Paragraph 6.2C requires a licensed-corporation manager to keep OFC records at premises approved by the SFC for not less than seven years.

An auditor is mandatory and must be independent. The basis is section 112ZB of the Securities and Futures Ordinance and Chapter 9 of the Code.

The registered office must be in Hong Kong — section 112I; rule 20 of the OFC Rules requires notification of a change of address within 15 days on Form OFCR1, and rule 20(2) makes a failure to do so an offence by the company. The same applies to a re-domiciled OFC. The practical side of corporate presence is covered in Hong Kong Company Registration 2026.

What It Costs to Register an OFC: the Full Fee Picture

Registering a private OFC costs HK$5,000 in SFC fees for a single fund, or HK$10,000 plus HK$1,250 per sub-fund for an umbrella, plus HK$3,034 of Companies Registry incorporation fees. A public OFC pays no separate registration fee but goes through product authorisation on a different scale.

SFC fees on application for registration — Schedule 1 Part 1 to Cap. 571AR:

Item	Fee
Registration of a proposed company with one or more sub-funds (umbrella)	HK$10,000 plus HK$1,250 for each sub-fund
Registration of any other proposed company (single)	HK$5,000

SFC fees for post-registration approvals — Schedule 1 Part 2, confirmed against the primary text of L.N. 98 of 2018 and independently against the SFC’s 2026 FAQ: “a fee of HK$300 is payable for an application for (i) an approval of appointment of director, custodian or investment manager, (ii) an approval of a change of name, or (iii) a cancellation of registration”. Both tables have been checked against the consolidated text of Cap. 571AR in the version in force: the point in time for Schedules 1 and 3 is 1 November 2021, so Ord. No. 33 of 2021 remains the last amending instrument. The “modification or waiver” item in Schedule 1 Part 2 is tied to section 112ZO(2) of the Ordinance.

Item	Fee
Approval of a change of the OFC’s name	HK$300
Approval of appointment of a director	HK$300
Approval of appointment of a custodian	HK$300
Approval of appointment of an invest­ment manager	HK$300
Approval to establish a sub-fund	HK$1,250 per sub-fund
Approval to terminate a sub-fund	HK$300 per sub-fund
Approval to change a sub-fund name	HK$300 per sub-fund
Applica­tion to cancel the OFC’s regis­tration	HK$300
Applica­tion for modification or waiver	HK$6,000

Re-domiciliation has its own fee items, added in 2021. The Securities and Futures (Amendment) Ordinance 2021 (Ord. No. 33 of 2021), gazetted on 7 October 2021, amended Cap. 571AR by inserting:

•          a new Part 1A of Schedule 1 — an application under section 112ZJB(1) to register a non-Hong Kong fund corporation: HK$10,000 plus HK$1,250 for each sub-fund where the intended OFC has or could have sub-funds, and HK$5,000 in any other case;

•          new items 2A and 2B of Schedule 3 — lodging a re-domiciliation form with a copy of the instrument of incorporation under section 112ZJC: HK$479; issuing a certificate of re-domiciliation: HK$2,555.

So on a re-domiciliation the SFC fee is payable separately, on the same scale as a first registration.

Companies Registry fees — Schedule 3 to Cap. 571AR (principal items):

Item	Fee
Lodging the incorpo­ration form and a copy of the instrument of incorpo­ration	HK$479 (non-refundable)
Incorporating an OFC — certificate	HK$2,555
Lodging a re-domici­liation form and a copy of the instrument of incorpo­ration (item 2A)	HK$479
Issuing a certificate of re-domici­liation (item 2B)	HK$2,555
Lodging notice of change of name	HK$160
Issuing a certificate of change of name	HK$1,245
Certi­fying a copy of a document or informa­tion	HK$130
Regis­tering a notice of appointment of a receiver or manager	HK$40
Inspec­ting a liquida­tor’s statement	HK$26
Copy of a liquida­tor’s statement	HK$13 per page

Registry total: HK$3,034 to incorporate an OFC, and the same HK$3,034 to re-domicile; a change of name costs HK$1,405. Business registration fees are payable separately. The Companies Registry confirms the re-domiciliation figures directly: “The fee for lodging a re-domiciliation form is HK$479 and the fee for issuing a certificate of re-domiciliation is HK$2,555.”

Public OFC: product authorisation under the Securities and Futures (Fees) Rules (Cap. 571AF).

Fee	Single fund	Umbrella fund	Each sub-fund
Applica­tion fee	HK$20,000	HK$40,000	HK$5,000
Authorisation fee	HK$10,000	HK$20,000	HK$2,500
Annual fee	HK$6,000	HK$7,500	HK$4,500

Author’s assessment: a private OFC pays no SFC annual fee at all. The Cap. 571AR schedule contains no recurring annual charge, and the SFC FAQ states that the annual fee “is applicable to a public OFC as an SFC-authorized fund”. A private OFC bears only the transaction-based HK$300 and HK$1,250 items plus business registration fees. Under section 11 of the Fees Rules the SFC may waive any or all of the authorisation fees.

What an LPF Is and Who Must Be in It

A limited partnership fund is a fund structured as a limited partnership and registered under the Limited Partnership Fund Ordinance (Cap. 637); an LPF has no legal personality and is registered by the Registrar of Companies with no SFC involvement. Section 15: an LPF “is a fund set up in the form of a limited partnership under this Ordinance” and “does not have a legal personality”.

The LPF is an opt-in regime, not a replacement. The Companies Registry FAQ: “the LPF regime is an opt-in registration scheme which does not preclude other funds from operating in Hong Kong in the form of a limited partnership in parallel to a registered LPF.” Partnerships under the Limited Partnerships Ordinance (Cap. 37) continue to exist.

Five parties are mandatory. The Companies Registry pamphlet: “An LPF must have at least one limited partner, a general partner, an investment manager, a responsible person and an independent auditor.”

The general partner carries unlimited liability and ultimate control. Section 19: the general partner “has unlimited liability for all the debts and obligations of the fund” and has “ultimate responsibility for the management and control of the fund”. Section 22 requires it to ensure proper custody arrangements for the fund’s assets as specified in the limited partnership agreement. Note the point carefully: an LPF has no mandatory custodian — it has a general partner’s duty to ensure proper custody. That is a fundamental departure from the OFC.

Section 7(c) admits seven forms of general partner: a natural person aged 18 or over; a private company limited by shares under the Companies Ordinance; a registered non-Hong Kong company; a limited partnership registered under Cap. 37; another LPF; a non-Hong Kong limited partnership with legal personality; and a non-Hong Kong limited partnership without legal personality.

Where the general partner is itself another LPF, or a non-Hong Kong limited partnership without legal personality, an authorized representative is required (section 23) — a Hong Kong resident aged 18 or over, a company, or a registered non-Hong Kong company. The general partner and the authorized representative are jointly and severally liable for all the debts and obligations of the fund.

An investment manager is mandatory, but the Ordinance itself requires no SFC licence. Section 20: the general partner “must appoint a person (who may be the general partner or another person) as an investment manager to carry out the day-to-day investment management functions of the fund”. Author’s assessment: that does not mean no licence is needed. If the manager in fact carries on asset management as a regulated activity in Hong Kong, a Type 9 licence is required under the Securities and Futures Ordinance regardless of Cap. 637. The fund statute and the securities statute operate in parallel, and the second is not displaced by the first.

The AML/CTF responsible person is a mandatory and narrowly defined role. Section 33 requires the general partner to appoint a person to carry out the measures set out in Schedule 2 to the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615). The eligible class is closed: an authorized institution, a licensed corporation, an accounting professional or a legal professional. The general partner may fill the role itself only if it falls within one of those categories. Section 35 sets four levels of sanction, not two, and the indictment limbs are far heavier. The base offence — knowingly causing or permitting a contravention by the fund — carries a level 6 fine and six months on summary conviction, and HK$1,000,000 and two years on indictment. The same offence committed with intent to defraud carries HK$500,000 and one year on summary conviction, and HK$1,000,000 and seven years on indictment.

An auditor is mandatory, annual and independent. Section 21 admits only a “practice unit as defined by section 2(1) of the Professional Accountants Ordinance”, independent of the general partner and the investment manager.

The registered office must be in Hong Kong; a “care of” address and a post office box are not accepted. Sections 7(g) and 18.

The fund’s name is tightly prescribed. Section 8(2): the English name “must contain the words ‘Limited Partnership Fund’ as the last 3 words of the name or ‘LPF’ as the last word of the name”. Section 8(3): a Chinese name must end with the six characters “有限合夥基金”.

The LPF Limited Partner: the Safe Harbour and the Price of Losing It

A limited partner in an LPF is not liable for the fund’s debts beyond the agreed contribution, owes no fiduciary duty and has no day-to-day management rights — but loses that protection on taking part in the management of the fund. Section 26.

The consequence is stated bluntly. Section 26(5): “If a limited partner in a limited partnership fund takes part in the management of the fund, the limited partner and the general partner in the fund (and, if applicable, the fund’s authorized representative) are jointly and severally liable for all the debts and obligations of the fund incurred while the limited partner so takes part in the management.” Liability becomes joint, several and unlimited — but only for the period of such participation.

The safe harbour sits in section 27 and Schedule 2. Section 27(1)(a): a limited partner “is not to be regarded as taking part in the management of the fund only because the partner conducts an activity set out in Schedule 2”. Paragraph (b) of the same subsection separately provides that taking part in a decision involving an actual or potential conflict of interest does not of itself amount to taking part in management.

Schedule 2 is headed “Activities not Regarded as Management of Limited Partnership Fund” and runs to eighteen items. Its marginal reference is to sections 27 and 99 (section 99 being the power to amend the Schedule). The list stands in its 31 August 2020 form and has not been amended since.

No.	Activity that does not amount to taking part in manage­ment (Schedule 2 to Cap. 637)
1	Acting as an agent, member, contractor, officer or employee of the fund; serving on a board or committee of the fund; exercising powers or performing obliga­tions in those capacities
2	The same in relation to the general partner: acting as its agent, director, shareholder, member, contractor, officer or employee; serving on its board or committee
3	Authorizing a person to act as an agent, member, contractor, officer or employee of the fund
4	Authorizing a person to act in the same capacities in relation to the general partner
5	Appointing a person to a board or committee of the fund or of the general partner — or revoking such an appointment
6	Entering into or acting under a contract with the general partner or another limited partner, where it does not require or involve taking part in the day-to-day manage­ment of the fund
7	Serving on the board of directors or a committee of (a) any corpo­ration in which the fund has an interest, or (b) any corpo­ration providing manage­ment, consul­tation, custody or other services to the fund or having a business relationship with it
8	Appointing a person to such a board or committee — or revoking the appointment
9	Discussing with, or advising, the general partner, another limited partner or the invest­ment manager about the business, prospects, affairs or trans­actions of the fund
10	Approving or authorizing those same persons to do anything in connection with the business, prospects, affairs or trans­actions of the fund
11	Calling, requesting, attending or participating in a meeting of the partners in the fund
12	Exercising any right or power under the limited partner­ship agree­ment other than a power to carry out manage­ment functions — including the right to vote on, or signify approval or disapproval of, a proposed transaction of the fund
13	Consulting, investigating, reviewing, approving or advising on the accounts, the valuation or the assets of the fund, or the affairs of the fund
14	Acting as a guarantor for the fund or for the general partner
15	Approving or disapproving an amendment to the limited partner­ship agree­ment, or taking part in a decision about varying or waiving a term of it or of associated documents
16	Commencing, continuing or defending legal proceed­ings on behalf of the fund, or instructing a person to do so, where the general partner has refused to do so without good reason
17	Having all or part of the limited partner’s name included in the name of the fund
18	Taking part in a decision about eleven matters: (a) whether a person should become or cease to be a general or limited partner; (b) whether to apply for deregis­tration or dissolution of the fund; (c) whether to extend the fund’s term; (d) changes in the persons responsible for day-to-day manage­ment; (e) the incurrence or renewal of indebtedness; (f) a change in the invest­ment scope; (g) entering into contracts with other parties in relation to the fund’s business; (h) enforcing an entitlement under the limited partner­ship agree­ment where this does not involve taking part in day-to-day manage­ment; (i) the exercise of the fund’s rights in respect of an invest­ment; (j) a limited partner’s participation in a particular invest­ment; (k) the creation, extension, variation or discharge of any other obliga­tion owed by the fund

The most important thing about this list is stated in the statute itself, and it inverts how the list should be used. Section 27(2): “The enumeration of activities in Schedule 2 does not limit the circumstances in which a limited partner in a limited partnership fund is not to be regarded as taking part in the management of the fund.” Schedule 2 is therefore not a closed list of what is permitted; it is a list of what is unconditionally safe. An activity outside it is not automatically management — but it carries no statutory guarantee and falls to be judged on the general words of section 26(5).

One further point that is easy to miss in funds with an authorized representative. Section 27(3): where an LPF has an authorized representative, a reference to the general partner in Schedule 2 is a reference to the general partner and the authorized representative. For re-domiciled funds and funds with an offshore general partner this widens the safe harbour rather than narrowing it.

Practical reading: items 12 and 18 cover nearly everything an institutional investor typically wants — a veto over transactions, extension of the fund’s term, changes to the management team, changes to the investment scope. The danger zone begins where a limited partner takes on day-to-day management: both item 6 and item 18(h) are qualified in exactly those words. The cost of getting it wrong is the move from limited liability to joint, several and unlimited liability for the whole period of participation.

Freedom of contract in an LPF is wider than in any corporate vehicle. Section 16(2)(g) expressly covers “the financial arrangements among the partners in the fund, such as capital contributions to the fund, withdrawal of capital contributions from the fund, distribution of proceeds, and clawback obligations of the partners”. The single hard constraint is section 17: withdrawals of capital and distributions of profits and assets are permitted only if the fund remains solvent afterwards. The Ordinance contains no statutory clawback — that is left to the agreement. This is a deliberate departure from Cap. 37, where a limited partner who withdrew capital remained liable for the fund’s debts up to the amount withdrawn.

How to Register an LPF and What It Costs

An application to register an LPF must be made by a Hong Kong law firm or a solicitor on behalf of the proposed general partner — it cannot be filed directly. The Companies Registry FAQ: “An application for registration of a fund as an LPF must be made to the Registrar of Companies by a Hong Kong law firm or a solicitor on behalf of the proposed general partner in the fund.” Section 11 of Cap. 637 requires the application to contain the information set out in Schedule 1 and to be submitted through such a firm or solicitor.

The certificate is normally issued within four working days of receipt of the application — together with the business registration certificate. The Companies Registry: “The Certificates will normally be issued within 4 working days after receipt of the application.”

Since 27 December 2023 a one-stop business registration applies to LPFs: Form IRBR4 is submitted with the registration application, and the Business Registration Certificate is issued alongside the Certificate of Registration. Since 1 November 2021 the eight-digit business registration number serves as the unique identifier of an LPF.

The certificate of registration is conclusive evidence of the fund’s status — section 13. A refusal is appealable to the Court within 42 days — section 14.

The full Companies Registry fee schedule for LPF forms:

Form	Purpose	Fee
LPF1	Applica­tion for regis­tration of an LPF	HK$3,034 (HK$2,555 regis­tration + HK$479 non-refundable lodgement)
LPF2	Registration of a Cap. 37 fund as an LPF (migration)	HK$3,034
LPF3	Notifi­cation of change of name	HK$1,405
LPF4A	Change of address, location of records and invest­ment scope	HK$26
LPF4B	Change in particulars of the general partner, authorized represen­tative, invest­ment manager and respon­sible person	HK$26
LPF4C	Change of general partner, authorized represen­tative, invest­ment manager and respon­sible person	HK$26
LPF5	Annual return of the LPF	HK$105
LPF7	Applica­tion for deregis­tration	HK$420
LPF8	Notifi­cation of dissolution	HK$26
LPF10	Registration of a non-Hong Kong fund as an LPF (re-domici­liation)	HK$3,034

The business registration fee and levy are payable in addition. Register searches: basic information free, HK$13 per document inspected, HK$90 for a certified copy.

Annual obligations are formal and time-bound. The annual return on Form LPF5 is due within 42 days after each anniversary of registration (section 24). Notifications of change are due within 15 days (section 25) — covering a change of general partner, investment manager, responsible person, office address or investment scope. Section 29 requires audited financial statements, the register of partners, AML/CTF customer due diligence documents, transaction records and controller information to be kept in Hong Kong. The wider annual compliance picture is set out in Mandatory Annual Compliance for Hong Kong Companies 2026, and the beneficial ownership requirements in The Significant Controllers Register in Hong Kong.

Deregistration on application requires four conditions simultaneously: all partners agree; there are no outstanding liabilities; the general partner is not involved in pending litigation about the fund’s affairs; and the fund’s assets include no immovable property situated in Hong Kong. The Registrar publishes notice of the proposed deregistration in the Gazette and, absent objection within three months, may deregister the fund.

Compulsory striking off of an LPF is a two-stage process, and the grounds sit in section 65, not section 67. Section 65(1) empowers the Registrar to send an inquiry letter to the general partner where there is reasonable cause to believe that one of the six circumstances listed in subsection (2) applies:

No.	Ground under section 65(2)
(a)	The fund does not meet the eligi­bility require­ments in section 7
(b)	The fund does not have an invest­ment manager
(c)	The fund does not have a responsible person
(d)	Where section 23 applies — the fund does not have an authorized represen­tative
(e)	After the second anniver­sary of the date on which the certifi­cate of regis­tration was issued: (i) the fund is not in operation or is not carrying on business as a fund; or (ii) all the partners in the fund are corpo­rations in the same group of companies
(f)	Where the fund is registered under section 82C (re-domi­ciliation) — section 82E is not complied with

The precise trigger in ground (e) is “after the second anniversary of the date on which the certificate of registration was issued”, not “24 months of inactivity”. Paragraphs (d), (e) and (f) in their current form were inserted by Ord. No. 34 of 2021 (section 9).

The striking off itself is done under section 67 and cannot happen sooner than three months later. Section 67(1): at the end of three months after publication of a notice under section 65(4) or section 66(2)(b), the Registrar may publish a notice striking the fund’s name off.

The consequence of striking off is rarely explained, and it is the part that matters: the fund is not wound up — it loses the LPF regime and carries on as an ordinary partnership. Section 67(2): the name is struck off, the fund “ceases to be a limited partnership fund”, and if it was still in existence “the fund continues in existence in the form of a partnership” to which the Ordinance “ceases to apply”. Section 67(3): unless the continuing partnership is a non-Hong Kong limited partnership, it is to be regarded as a partnership that is not a limited partnership, and the former general and limited partners are regarded as its partners. In practice: the investors’ limited liability disappears and they become ordinary partners. That, not the removal from the register, is the real cost of letting a dormant LPF drift.

Re-domiciling a Foreign Fund to Hong Kong: OFC and LPF

A foreign corporate fund may re-register in Hong Kong as an OFC and a foreign partnership as an LPF; both mechanisms have been available since 1 November 2021 and neither creates a new legal entity. The legal basis is the Securities and Futures (Amendment) Ordinance 2021 (Ord. No. 33 of 2021) for OFCs, inserting Division 8A (sections 112ZJA–112ZJE) into Part IVA, and the Limited Partnership Fund and Business Registration Legislation (Amendment) Ordinance 2021 (Ord. No. 34 of 2021) for LPFs, inserting Part 7A (sections 82A–82F) into Cap. 637.

Note also that a general company re-domiciliation regime has operated in Hong Kong since 2025, introduced by the Companies (Amendment) (No. 2) Ordinance 2025 and commencing on 23 May 2025. It is designed for ordinary companies rather than funds and does not replace the OFC and LPF mechanisms described below — but it is worth keeping in view when choosing a route for a group holding structure.

Do not confuse the two similarly named 2021 Ordinances. The Securities and Futures (Amendment) Ordinance 2021 is the OFC re-domiciliation Ordinance. The Securities and Futures and Companies Legislation (Amendment) Ordinance 2021 is the uncertificated securities market (USM) Ordinance, whose provisions commence on 16 November 2026.

The OFC mechanism. A non-Hong Kong fund corporation applies to the SFC, which registers it if satisfied that the registration requirements “will, on the re-domiciliation date, be met” and that registration is in “the interest of the investing public”. The substantive test is that the corporation must meet the same key requirements as a newly established OFC.

The legal effect is stated expressly, and it is what makes the process tax-neutral. Section 112ZJD: on the re-domiciliation date the corporation “becomes” a re-domiciled OFC; the process “does not… create a new legal entity” and “does not… affect the identity or continuity of the non-Hong Kong fund corporation”. All property becomes the property of the re-domiciled OFC, but this “does not amount to a transfer of assets… or change in beneficial ownership”. The corollary recorded in the SFC’s September 2020 consultation conclusions is that no stamp duty arises on re-domiciliation. The mechanics of stamp duty on share transfers themselves are covered in Stamp Duty on Share Transfers in Hong Kong 2026.

An OFC re-domiciliation has a second cost component that is often overlooked: the SFC fee. Under Part 1A of Schedule 1 to Cap. 571AR, added in 2021, an application to register a non-Hong Kong fund corporation costs HK$10,000 plus HK$1,250 for each sub-fund, or HK$5,000 where there are no sub-funds. The Companies Registry side is HK$479 plus HK$2,555, or HK$3,034 in total.

The LPF mechanism. The application is on Form LPF10 with a fee of HK$3,034. Section 82E imposes a hard condition: “If a non-Hong Kong fund is registered as a limited partnership fund, the fund must be deregistered in its place of establishment within 60 days after the registration date.” The Registrar may extend the sixty-day period on such conditions as it thinks fit; on non-compliance, the Registrar may strike the fund off the register.

Author’s assessment: the sixty-day window is the most underestimated element of an LPF re-domiciliation.Deregistration in an offshore jurisdiction usually requires tax and audit confirmations, and compressing that into two months after the Hong Kong registration — rather than before it — has to be done under the threat of being struck off.

The Unified Funds Exemption: Sections 20AM, 20AN and 20AO

Since 1 April 2019 a fund’s profits from qualifying transactions have been exempt from profits tax under section 20AN of the Inland Revenue Ordinance, whether or not the fund’s central management and control is exercised in Hong Kong. That follows directly from the long title of Ord. No. 5 of 2019, which grants the exemption “whether or not the central management and control of the funds is exercised in Hong Kong”.

Three earlier regimes were repealed. DIPN 61 records that the 2019 Ordinance replaced the offshore funds exemption (section 20AC), the offshore private equity funds exemption (section 20ACA) and the separate OFC exemption (section 20AH). The reason was the EU Code of Conduct Group’s finding that the earlier regimes were harmful because they ring-fenced the domestic market.

What counts as a “fund” — section 20AM. The definition rests on three cumulative features (subsection (2)):

•          (a) the property is managed as a whole by, or on behalf of, the person operating the arrangement, and/or the participants’ contributions and the profits or income from which payment is made to them are pooled;

•          (b) the participants “do not have day-to-day control over the management of the property (whether or not they have the right to be consulted on, or to give directions in respect of, the management)”;

•          (c) the purpose or effect of the arrangement is to enable the participants to participate in, or receive, profits, income or other returns from the acquisition, holding, management or disposal of the property.

Subsection (4) separately treats a sovereign wealth fund as a fund — an arrangement “established and funded by a state or government… for the purposes of (a) carrying out financial activities; and (b) holding and managing a pool of assets, for the benefit of the state or government”.

Author’s assessment: there is no separate “collective investment scheme” limb in section 20AM, contrary to a common account. DIPN 61 says something different: the definition of “fund” “replicates, with necessary modifications” the definition of collective investment scheme in Schedule 1 to the Securities and Futures Ordinance. That is a resemblance of drafting, not a cross-reference. Section 20AM(5) in fact excludes nine categories of arrangement from the definition — among them mutual funds, unit trusts and similar schemes, intra-group arrangements, employee schemes, franchise arrangements, solicitors’ client money, compensation funds, credit unions and chit-fund arrangements. A separate subsection (6) provides that “a business undertaking for general commercial or industrial purposes is not a fund”, and subsection (7) explains that such undertakings include buying and selling goods, production, property development, finance, insurance, infrastructure and direct investment in that capacity.

The exemption itself — section 20AN(2). Exempt are profits earned from:

•          (a) transactions in assets of a class specified in Schedule 16C (“qualifying transactions”);

•          (b) transactions incidental to those, subject to subsection (4) (“incidental transactions”);

•          (c) where the fund is an open-ended fund company — transactions in assets of a class that is not specified in Schedule 16C.

Paragraph (c) is the one surviving advantage the OFC holds over every other vehicle, the LPF included. But it is cut back materially by section 20AS, and paragraph (c) cannot be read without it — see the dedicated section below.

The condition — section 20AN(3), with two alternative routes. Either the qualifying transactions are “carried out in Hong Kong by or through a specified person; or arranged in Hong Kong by a specified person”, or the fund is a “qualified investment fund”.

“Specified person” is defined in subsection (6) as “a corporation licensed under Part V of the Securities and Futures Ordinance (Cap. 571) to carry on, or an authorized financial institution registered under that Part for carrying on, a business in any regulated activity”.

“Qualified investment fund” — the alternative for those not using a licensed manager — requires three conditions simultaneously: after the final closing of the sale of interests the number of investors exceeds four, the investors’ capital commitments exceed 90% of aggregate capital commitments, and the fund’s operating agreement provides that no more than 30% of net proceeds go to the originator and its associates after deducting the portion attributable to their own contributions.

The 5% incidental transactions threshold is a cliff, not a slice. Section 20AN(4): the exemption does not apply to profits from incidental transactions where the ratio of trading receipts from those transactions to the sum of receipts from qualifying and incidental transactions exceeds 5%. On DIPN 61, breaching it disqualifies all incidental-transaction profits, not merely the excess. This is the threshold the 2026 Bill proposes to remove.

The eleven asset classes of Schedule 16C:

No.	Class of assets
1	Securi­ties
2	Shares, stocks, deben­tures, loan stocks, funds, bonds or notes of, or issued by, a private company
3	Futures contracts
4	Foreign exchange contracts under which the parties agree to exchange different curren­cies on a particular date
5	Deposits other than those made by way of a money-lending business
6	Deposits as defined by section 2(1) of the Banking Ordinance (Cap. 155) made with a bank
7	Certifi­cates of deposit as defined by Part 1 of Schedule 1 to the Securi­ties and Futures Ordinance
8	Exchange-traded commodi­ties
9	Foreign curren­cies
10	OTC deriva­tive products as defined by Part 1 of Schedule 1 to the Securi­ties and Futures Ordinance
11	An investee company’s shares co-invested by a partner fund and ITVFC under the ITVF Scheme

Section 20AO is not a deeming provision but a second, proportionate exemption for special purpose entities. An SPE owned by an exempt fund is exempt on profits from transactions in the securities of investee private companies and interposed SPEs. But subsection (3) caps the relief: “The extent of exemption under subsection (2) is the percentage equal to the percentage of the fund’s ownership of the special purpose entity in the year of assessment.” Author’s assessment: it is precisely this proportionality that the 2026 Bill proposes to remove — and for co-investment structures that is among the most significant changes in the whole package.

OFC vs LPF on Tax: Where the Real Difference Lies

The tax difference between an OFC and an LPF comes down to one paragraph: an OFC is exempt on assets outside Schedule 16C and an LPF is not; the price of that extension is that the OFC’s tax status depends permanently on its SFC registration.

An LPF has no tax provision of its own at all. A fund registered under Cap. 637 relies on the ordinary section 20AN exemption: it must meet the section 20AM definition of “fund”, stay within Schedule 16C plus incidental transactions inside the 5% threshold, and satisfy either the specified person condition or the qualified investment fund condition. DIPN 61 contains no LPF-specific guidance — an LPF is treated simply as a limited partnership falling within section 20AM.

An OFC retains three specific provisions, and one of them cuts back materially the very advantage for which OFCs are chosen.

Section 20AN(2)(c) gives the exemption on assets outside Schedule 16C. No other vehicle has such a provision.

But section 20AS takes much of it straight back, and its text must be read in full:

“20AS. When does exemption under section 20AN not apply to open-ended fund companies — Despite section 20AN, if, during the basis period for a year of assessment, an open-ended fund company — (a) carries on a direct trading or direct business undertaking in Hong Kong in assets of a class that is not specified in Schedule 16C (non-Schedule 16C class); or (b) holds assets of a non-Schedule 16C class that are utilized to generate income, the company is not exempt from the payment of tax chargeable under this Part in respect of its assessable profits for the basis period earned from the trading, business undertaking or utilization.”

Author’s assessment: this is the most underestimated provision in the regime, and it is routinely missed.The paragraph (c) extension is real but narrow: it does not cover an OFC carrying on a direct trading or direct business undertaking in Hong Kong in non-Schedule 16C assets, and it does not cover such assets held to generate income. Practical conclusion: paragraph (c) cannot support a strategy in which non-standard assets are held for income — that is precisely the case section 20AS excludes.

Note what section 20AS does not say. Its text mentions neither SFC registration, nor cancellation of registration, nor the OFC Rules, nor the OFC Code. The link between tax status and regulatory status is made not by the section but by paragraph 71 of DIPN 61, the Department’s practice note: “If an OFC breaches the OFC Rules and/or OFC Code (including the 10% de minimis rule) in a way that results in cancellation of registration by the SFC, the OFC will not qualify for profits tax exemption under section 20AN.” Paragraph 70 of the same note sets out the 10% de minimis rule: private OFCs may invest mainly in asset types whose management constitutes Type 9 regulated activity, and in other asset classes not exceeding 10% of gross asset value.

There is a tension here that should be named openly, and one date explains it. DIPN 61 was issued in June 2020 — three months before the Code edition of 11 September 2020 that abolished the 90/10 test for private OFCs — and it has never been revised since. The note therefore still describes the 10% de minimis rule and its tax consequences, although the regulatory restriction from which it grew was lifted six years ago. Author’s assessment: this is a gap between the regulatory and tax layers, not an error in either document. Practical conclusion: the “cancellation of SFC registration removes the exemption” proposition rests on an unrevised practice note rather than on the text of section 20AS, and should be stated that way.

Sections 20AT and 20AV complete the picture: sub-funds of an OFC are looked at separately, and OFC losses are dealt with under separate rules.

Net position: an OFC’s tax outcome is wider than an LPF’s, but the extension is bounded by the two carve-backs in section 20AS, and the Department’s practice additionally ties the exemption to continued SFC registration. An LPF has neither carve-back nor tie — but its perimeter is confined to Schedule 16C.

The Anti-Round-Tripping Rules: Sections 20AX and 20AY

Where a Hong Kong resident holds a beneficial interest of 30% or more in an exempt fund, the fund’s exempt profits are treated, to that extent, as the resident’s own assessable profits. This is the price of removing the non-residence requirement in 2019.

Section 20AX(1): where, in a year of assessment commencing on or after 1 April 2019, a resident person holds a beneficial interest in a fund to the extent set out in subsection (2) and the fund is exempt under section 20AN, the fund’s assessable profits for the period that would otherwise have been chargeable “are to be regarded as the assessable profits arising in, or derived from, Hong Kong of the resident person… from a trade, profession or business carried on by the resident person in Hong Kong”.

Section 20AX contains two independent deeming gateways, and they should be read as two separate rules rather than one rule with an exception.

The first gateway — subsection (1) read with subsection (2) — turns on the size of the holding. Subsection (2) sets the required extent of beneficial interest: the resident “either alone or jointly with any of the person’s associates… holds or is interested in not less than 30%”, depending on whether the fund is a corporation, a partnership, a trust or another entity. The 30% is therefore counted together with the resident’s associates.

The second gateway — subsection (3) — has no threshold at all. It applies where, cumulatively: “(a) a resident person has… a beneficial interest (whether direct or indirect or both) in a fund; (b) the fund is exempt from the payment of tax under section 20AN; and (c) the fund is an associate of the resident person”. No percentage is required: it is enough that the fund itself is an associate of the resident.

Author’s assessment: the practical difference is fundamental. A resident holding 10% of an ordinary fund is outside the deeming; the same resident holding the same 10% of a fund that is its associate is inside it entirely. Subsection (8) confirms the two-gateway construction structurally: the bona fide widely held relief disapplies “subsections (1) and (3)” — both grounds at once. Note that DIPN 61’s anti-round-tripping section is headed “Resident person with not less than 30% interest” and does not develop the second gateway — the statute, not the practice note, is what governs here.

The relief is bona fide wide holding. Section 20AX(8): subsections (1) and (3) do not apply where the Commissioner is satisfied that “the beneficial interests in the fund are bona fide widely held”.

A second relief prevents double deeming up a chain. Section 20AX(9): where a resident person is liable in respect of a fund’s profits and holds the interest through an interposed person that is itself a resident person chargeable on the same basis, the first resident person is discharged from that liability. In practice: in a multi-tier Hong Kong structure the profits are deemed once, not at every level.

Section 20AY extends the same machinery to the profits of a special purpose entity held by an exempt fund, with the same 30% test and the same relief.

A “resident person” for these purposes is an individual who ordinarily resides in Hong Kong or is present there for more than 180 days in the year of assessment or more than 300 days across two consecutive years; and, for a corporation, partnership or trustee, a person whose central management and control is exercised in Hong Kong (section 20AW(2)).

Author’s assessment: for Hong Kong family offices and locally based managers this is the most underestimated provision in the regime. A fund’s exemption does not mean no tax arises — it may arise at the level of the resident investor instead. The 2026 Bill is reported to relax these rules; there is no official confirmation of that, as discussed below.

A parallel mechanism operates in the family office regime: a resident investor holding 30% or more of an FIHV or FSPE must report the deemed profits at item 3.2 of form BIR51 or item 2.2 of form BIR52.

The application of double taxation agreements and the evidencing of residence are covered in Hong Kong Certificate of Resident Status 2026; the territorial principle and offshore profits claims in Territorial Taxation and Offshore Status in Hong Kong 2026.

Carried Interest at 0%: the Conditions That Screen Most Funds Out

Eligible carried interest is charged to profits tax at 0% and excluded in full from employment income for salaries tax — but only where the fund is certified by the Hong Kong Monetary Authority and the substantial activities requirements are met. The regime was introduced by Ord. No. 9 of 2021 (gazetted 7 May 2021) and applies to carried interest received or accrued on or after 1 April 2020, that is from the year of assessment 2020/21.

The concession is delivered through Schedule 16D, not through a freestanding section. Author’s assessment: the common citation of “section 22 of Cap. 112” is wrong — section 22 governs the assessment of partnerships and has nothing to do with carried interest.

•          Profits tax rate — Schedule 16D, section 7: “the rate of profits tax in respect of the net eligible carried interest mentioned in section 6 of this Schedule is 0%”.

•          Salaries tax exclusion — Schedule 16D, section 9: “the percentage mentioned in section 8(3) of this Schedule is 100%” — the whole of the qualifying employee’s eligible carried interest is excluded from employment income.

What counts as eligible carried interest. Schedule 16D, section 3(1): “a sum received by, or accrued to, a person by way of profit-related return from the provision of investment management services by the person for a certified investment fund or a specified entity”. Subsection (2) requires the sum to be received after the payment of a return on investments subject to the fulfilment of the hurdle rate in the fund and to vary by reference to profits. That is the classic preferred-return structure — and it is the hurdle-rate requirement that the 2026 Bill proposes to abolish.

HKMA certification is the regime’s bottleneck. The definition of “certified investment fund” in Schedule 16D, section 2: a fund within the meaning of section 20AM “that is certified by the Monetary Authority to be in compliance with the criteria for certification published by the Monetary Authority”. Applications opened on 16 July 2021 under the Guideline on Certification of Funds under Schedule 16D to the Inland Revenue Ordinance, supplemented by auditor’s-report guidelines of 31 August 2022. On the FSTB Brief, the Monetary Authority assesses “whether the fund makes PE investment” — so certification operates in practice as a private-equity-only gate.

The substantial activities requirement — Schedule 16D, section 5(3), with the exact figures:

•          average number of full-time employees in Hong Kong: 2 or more;

•          total operating expenditure incurred in Hong Kong: HK$2,000,000 or more.

The test applies for each year of assessment in respect of the investment management services carried out in Hong Kong.

The external investor requirement operates indirectly. One limb of “qualifying person” requires the services to be provided “for a certified investment fund that is a qualified investment fund”, and that status requires, as above, more than four investors, over 90% of capital commitments from investors and no more than 30% of net proceeds to the originator and its associates. The FSTB Brief summarises this as the fund having “at least five investors”.

Reporting. The employer files Form IR6177 with the employer’s return; the qualifying person files supplementary Form S15 with BIR51 or BIR52 for each year in which the concession is claimed.

No statistics on the number of HKMA-certified funds have been published. Author’s assessment: the fact that the 2026 Bill proposes to abolish certification altogether points indirectly to low take-up — but that is an inference, not a sourced figure.

Family Offices: the FIHV Regime at 0%

A family-owned investment holding vehicle (FIHV) managed by an eligible single family office is charged to profits tax at 0% where the asset, headcount and expenditure thresholds are met. The regime was introduced by Ord. No. 8 of 2023, gazetted and in operation on 19 May 2023, and applies to years of assessment commencing on or after 1 April 2022.

Condition	Requirement
Aggre­gate value of Schedule 16C assets	not less than HK$240,000,000
Average number of qualified emplo­yees in Hong Kong	not less than 2
Operating expendi­ture incurred in Hong Kong in the basis period	not less than HK$2,000,000
Family’s benefi­cial interest in the FIHV	at least 95% (Schedule 16E section 5(1)(a); from 75% where a charitable entity is involved, sections 5(2)–(6))
Family’s benefi­cial interest in the family office	at least 95% (Schedule 16E section 2(2)(a); from 75% where a charitable entity is involved, sections 2(3)–(7))
Maximum FIHVs managed by one office that may elect	not more than 50
Family office safe harbour rule	at least 75% of the office’s assessable profits from services to specified persons of the family
Rate	0%

Additional structural requirements. The FIHV must be normally managed or controlled in Hong Kong, must not be a business undertaking for general commercial or industrial purposes, and its investments must be managed by the family office in Hong Kong. The family office must be a private company — incorporated in or outside Hong Kong — normally managed or controlled in Hong Kong.

There are two 95% tests, they live in different sections of Schedule 16E, and each has its own relieving construction. Section 2(2)(a) requires that, at all times during the basis period, one or more members of the family hold at least 95% in aggregate of the beneficial interest in the family office; section 5(1)(a) imposes the same requirement on the FIHV itself. Each test is relieved through its own “Condition 1 plus Condition 2” machinery: sections 2(3)–(7) for the family office and sections 5(2)–(6) for the FIHV. The relief works the same way in both: where part of the interest is held by a charitable entity (as defined by reference to section 88 of the Ordinance), the test is treated as satisfied on a family interest of between 75% and 95%, provided the interest of unrelated persons stays within the prescribed limit.

One further condition is easy to overlook: an FIHV must not be a commercial business. Section 5(1)(b) of Schedule 16E expressly requires that the vehicle “is not a business undertaking for general commercial or industrial purposes” within the meaning of section 20AM(6) — the same filter that applies under the unified funds exemption.

The family office safe harbour is measured by management profits, not by assets. Section 3 of Schedule 16E introduces the FOMP percentage — the share of the office’s management profits earned from serving the family’s “specified persons” in its total profits. Subsection (2): the one-year safe harbour is met where the FOMP percentage for the subject year is not less than 75%; subsection (3) offers an alternative multiple-year safe harbour based on the average across two or three years.

The concession extends to a family-owned special purpose entity (FSPE) at the same 0% rate, proportionate to the FIHV’s ownership.

Author’s assessment: the key structural difference between the FIHV regime and the unified funds exemption is that the FIHV regime is an elective concessionary rate, not an automatic exemption. The FIHV must make an irrevocable election, and losses on concessionary transactions are ring-fenced. Reporting is on supplementary Form S20.

The anti-round-tripping rule mirrors sections 20AX and 20AY: a resident investor holding, alone or with associates, at least 30% of an FIHV or FSPE must treat the profits as its own.

The Global Minimum Tax: What It Does to the Zero Rates

The 0% rate on carried interest and under the FIHV regime, and the unified funds exemption itself, do not displace the global minimum tax: for groups with consolidated revenue of EUR 750 million or more, the effective rate in Hong Kong is topped up to 15% through the Hong Kong minimum top-up tax. The legal basis is the Inland Revenue (Amendment) (Minimum Tax for MNE Groups) Ordinance 2025, Ord. No. 21 of 2025, in force from 6 June 2025, which inserted Part 4AA and Schedules 61–65 into Cap. 112.

The connection runs through the text of the statute itself: Schedule 16E was touched by that very Ordinance. The version of Schedule 16E now in force carries a point in time of 6 June 2025 and the source note “(Amended 21 of 2025 s. 32)”. Precision matters here: section 32 of Ord. No. 21 of 2025 is headed “Consequential amendments to cross-references in various Schedules”, so the change is referential rather than substantive — the conditions of the FIHV regime were not rewritten by it. The significance lies elsewhere: since 6 June 2025 the FIHV regime has sat inside the global minimum tax perimeter rather than alongside it.

Fund vehicles are nevertheless protected at the entry point, and what protects them is excluded entity status, not the concession. Schedule 61 (the GloBE Rules) defines an excluded entity as one that is any of six things:

No.	Excluded entity category under Schedule 61
(a)	A govern­mental entity
(b)	An inter­national organi­sation
(c)	A non-profit organi­sation
(d)	A pension fund
(e)	An invest­ment fund that is an ultimate parent entity
(f)	A real estate invest­ment vehicle that is an ultimate parent entity

The operative limitation is the phrase “ultimate parent entity”. An investment fund is outside the perimeter only where it sits at the head of its own group. A fund held inside someone else’s group does not drop out.

The exclusion also flows down the ownership chain, but on thresholds. Schedule 61 adds to the list an entity of which at least 95% of the value is owned, directly or through a chain, by excluded entities, and — under a separate rule with softer conditions — an entity of which at least 85% of the value is so owned.

The practical takeaway for choosing a vehicle: for a typical private OFC or LPF at the head of its own structure, the global minimum tax stays out of the picture. It becomes live in two situations: where the fund or family office forms part of a corporate group that crosses the EUR 750 million threshold, and where a portfolio company of the fund constitutes such a group in its own right. The EUR 750 million threshold and the concept of a group are the same ones used in transfer pricing documentation — that framework is set out in Transfer Pricing in Hong Kong 2026: Part 8AA of Cap. 112.

> Author’s assessment: the biggest risk here is not the tax but the mismatch of perimeters. A structure can simultaneously be exempt under section 20AN, apply the 0% rate under Schedule 16E, and belong to a group obliged to compute an effective rate under the GloBE rules. A Hong Kong profits tax exemption is not an accidental low rate in a GloBE computation — it is precisely what the top-up tax is designed to collect.

The SFC Grant Scheme for OFCs: Three Vintages and Why It Matters

The grant covers 70% of eligible expenses paid to Hong Kong-based service providers, capped at HK$300,000 for a public OFC, HK$150,000 for a private OFC and HK$5,000,000 for a REIT; a maximum of one OFC per investment manager applies, and applications are accepted until 9 May 2027. These are the parameters in force since 11 April 2025.

The scheme has been recut twice, and its terms have tightened rather than improved.

Period	Cove­rage	Cap, public OFC	Cap, private OFC	Cap, REIT	Manager restric­tion
10 May 2021 – 9 May 2024	70%	HK$1,000,000 (no split)	HK$1,000,000	HK$8,000,000	None
10 May 2024 – 10 April 2025	70%	HK$1,000,000	HK$500,000	HK$8,000,000	Maximum three OFCs per manager
From 11 April 2025 (current)	70%	HK$300,000	HK$150,000	HK$5,000,000	One OFC per manager; no repeat grants

Applications submitted before 11 April 2025 keep the earlier parameters. The cap on the number of OFCs per manager did not appear in 2025 — it existed earlier and was tightened. The scheme FAQ describes the pre-11 April 2025 position verbatim: “the cap is $1 million per public OFC and $500,000 per private OFC and a maximum of three OFCs per investment manager”; and from 11 April 2025: “a cap of HK$300,000 per public OFC; (ii) a cap of HK$150,000 per private OFC; and (iii) a maximum of one OFC per investment manager”. Reliability caveat: the 2024 and 2025 parameters are confirmed by Government and SFC releases and by the scheme FAQ; the original May 2021 parameters rest on the SFC’s own Annual Report 2021-22 rather than on a separate launch release.

What is covered. Eligible expenses are those paid to Hong Kong-based service providers in relation to the “incorporation of the OFC or the re-domiciliation of the non-Hong Kong fund corporation”, or the listing of a REIT: legal fees, accounting and tax services, fund administration, regulatory consultancy, underwriting commission, valuation reports and marketing expenses.

Who is eligible. Under the scheme’s terms, “(i) OFCs successfully incorporated in Hong Kong and (ii) non-Hong Kong fund corporations successfully re-domiciled to Hong Kong as OFCs”; and for REITs, SFC-authorised real estate investment trusts listed on the Stock Exchange of Hong Kong on or after 10 May 2021 with a minimum market capitalisation of HK$1.5 billion.

The filing window is a hard three months. The application must be made within three months of the certificate of incorporation of the OFC, or within three months after a REIT’s listing date.

An LPF is not eligible. The scheme’s terms and conditions and FAQ refer only to OFCs and REITs; there is no limited partnership limb. This is the single most consequential practical difference between the two vehicles at the outset: all else equal, choosing an OFC brings up to HK$300,000 of Government money, and choosing an LPF brings none.

The scheme is administered by the SFC (Investment Products Division) and funded by the Government. The application period runs from 10 May 2021 to 9 May 2027. Note a condition usually reported as a formality: applications are handled first come, first served, and the scheme closes when the funding is fully disbursed or in May 2027, whichever is earlier. Combined with the three-month filing window, that means an application cannot be deferred even while the period is formally open.

Published results. As at end-February 2025, 430 OFCs and one REIT had received grants; registered OFCs had reached 502, up 81% year on year. For comparison: there were 14 OFCs in Hong Kong in May 2021 and 302 in March 2024.

The 2026 Bill: What Changes, and Where It Stands

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, introduced for first reading on 24 June 2026, and had not been passed as at August 2026. The Bill was referred to a Bills Committee, which has completed its clause-by-clause examination; the Government intends to resume the second reading debate “within the second half of this year”. The intended effect is retrospective, from the year of assessment 2025/26.

What “clause-by-clause examination completed” actually means. The committee has worked through the text clause by clause; the next steps are the committee’s report and the resumption of the second reading debate in the Legislative Council, followed by third reading and signature. The Bill has no legal force at this stage: until it is passed and gazetted, the existing text of the Ordinance governs.

The Bill’s five limbs are set out verbatim in the Government’s press release:

“(i) expanding the definition of ‘fund’; (ii) expanding the scope of qualifying investments; (iii) removing the 5 per cent threshold requirement for incidental transactions; (iv) relaxing the tax exemption treatment for special purpose entities (SPEs) and family-owned SPEs; and (v) introducing a series of enhancement measures to the tax regime for carried interest”.

A sixth limb appears in the same release and runs the other way:

“The Bill will also introduce, under the unified tax regime for funds, a tax reporting mechanism as well as economic substance requirements similar to those under the tax concession regime for FIHVs”.

Author’s assessment: this is the most important part of the package and it is routinely lost in summaries. Until now the unified funds exemption has operated on self-assessment with no substance floor. Importing FIHV-style requirements means a threshold of two full-time employees and HK$2,000,000 of Hong Kong operating expenditure where previously there was none.

What is corroborated at Level 1 on the content of the expansion:

•          Budget Speech 2026-27, paragraph 98: “The number of single-family offices in Hong Kong exceeds 3 300. To attract more family offices and funds to set up in Hong Kong, we will enhance our tax regime, including expanding the scope of ‘fund’ to cover specific funds-of-one, as well as classifying digital assets, precious metals, specified commodities, etc. as qualifying investments eligible for tax concessions.” The target year is 2025/26.

•          LCQ18 of 22 April 2026: the new eligible investments will include emission derivatives and emission allowances, carbon credits and insurance-linked securities.

•          FSTB blog of 10 February 2026: the expansion is to cover precious metals, loans, private credit investments and digital assets.

•          FSTB statement of 12 August 2026 on carried interest: “Other profits of eligible funds may also give rise to eligible carried interest”; carried interest is defined as returns “linked to the investment performance of a fund” that are “non-discretionary in nature”; and a business trading or holding assets “using proprietary capital with a view to generating profits on its own account… does not fall within the definition of ‘fund’”. The same statement records that the Inland Revenue Department “will issue administrative guidance where necessary” and that “The Government does not have plans to further expand the scope of the preferential measures”.

The limits of what is corroborated should be drawn honestly. The Bill itself and the Legislative Council Brief (ASST/3/1/5C(2026) of 10 June 2026) sit on legco.gov.hk, which was unreachable to automated access while this article was prepared. The detail below is therefore corroborated only by professional commentary (Level 2) and is presented as indicative, not as law.

Detail corroborated at Level 2 only:

•          a new “excepted fund” category — pension funds, endowment funds, funds whose sole investor is a governmental entity, central bank or international organisation, and funds-of-one holding not less than HK$240 million of qualifying investments; such funds are treated as funds without satisfying the pooling and multi-investor tests and without a licensed manager;

•          an expanded Schedule 16C — loans and private credit, interests in non-corporate entities, immovable property outside Hong Kong, insurance-linked securities, digital assets, precious metals (reportedly subject to a 20% cap, except holdings through the Chinese Gold and Silver Exchange Society), commodities linked to OTC derivatives and futures (reportedly subject to a 15% trade-volume limit), carbon credits and emission allowances, and derivatives;

•          full SPE exemption regardless of the fund’s ownership percentage — removing the proportionality in section 20AO(3);

•          on carried interest — extension to all qualifying transactions within the unified regime, abolition of HKMA certification, abolition of the hurdle-rate requirement, extension of “qualifying person” to unlicensed managers of excepted funds, and payment directly to a qualifying employee;

•          on the FIHV regime — a mirror-image expansion of qualifying investments and a recasting of the HK$240 million threshold from a net asset value test to the aggregate value of qualifying investments managed by the family office;

•          on sections 20AX and 20AY — relaxation of the deeming rules by excluding resident individuals, resident exempt funds, residents not chargeable to profits tax, and interposed entities that carry on no Hong Kong business and are at least 95% owned by qualifying persons. The Government’s press release does not mention the anti-round-tripping rules at all.

A transitional administrative measure is already running. From 12 June 2026 the Inland Revenue Department allows eligible taxpayers to file their 2025/26 profits tax returns on the basis of the exemptions and concessions proposed in the Bill, “subject to scrutiny by the Legislative Council”, with the taxpayer obliged to monitor developments and to notify the Department if the return needs revision after enactment.

Author’s assessment: this is an unusual and risky mechanism for the taxpayer. The return is filed on the basis of a rule that does not yet exist; if the Legislative Council amends the Bill, the return must be rewritten. Whether to file on the proposed basis or the current one is a decision with its own risk profile.

Consolidated Comparison: OFC, LPF and the Cayman Alternatives

The table consolidates the position as at August 2026.

Parameter	OFC (Hong Kong)	LPF (Hong Kong)	Cayman ELP	Cayman SPC
Legal basis	Part IVA Cap. 571, Cap. 571AQ, Cap. 571AR, Code on OFC	Cap. 637	Exemp­ted Limited Partner­ship Act	Compa­nies Act, SPC provisions
Legal person­ality	Yes — a corpo­ration	No	No	Yes
Regis­tering author­ity	SFC plus incorpo­ration by the Compa­nies Regis­try	Registrar of Compa­nies; no SFC role	Cayman Registrar	Cayman Registrar
Regime start date	30 July 2018	31 August 2020	1991	1998
Typical use	Hedge funds, multi-stra­tegy, retail funds, umbrella platforms	Private equity, venture, credit and infrastruc­ture funds	Private equity and venture	Umbrella structures
Segre­gated liability	Yes, section 112S, plus implied terms under rule 158	Contrac­tual	Contrac­tual	Yes, statutory
Manager	Type 9 licence or regis­tration manda­tory, section 112Z	No licence required by Cap. 637; Type 9 may be required by the SFO	Not required	Not required
Custodian	Manda­tory, section 112ZA	Not manda­tory; general partner’s duty to ensure custody, section 22	Not manda­tory	Depends
Directors and partners	At least 2 directors, natural persons only, at least 1 indepen­dent	1 general partner and at least 1 limited partner	GP and LP	Directors
Auditor	Manda­tory, section 112ZB	Manda­tory and indepen­dent, section 21	Required if regulated	Required if regulated
AML/CTF respon­sible person	Under general SFC rules	Manda­tory, closed class of eligible persons, sections 33–39	AML officers	AML officers
Office	In Hong Kong, section 112I	In Hong Kong, section 18	Regis­tered office in Cayman	Same
Company secre­tary	Not required	Not applicable	Not applicable	Required
Annual return to the registry	Not filed	Filed, Form LPF5, within 42 days of the anniver­sary	Annual declara­tion	Annual return
Forma­tion fee	HK$5,000 or HK$10,000 + HK$1,250 per sub-fund (SFC) + HK$3,034 (CR)	HK$3,034	Cayman tariff	Cayman tariff
Annual regula­tor fee	None for a private OFC; public OFC HK$6,000 / HK$7,500 / HK$4,500 per sub-fund	Only HK$105 for the annual return	Annual	Annual
Profits tax exemp­tion	Section 20AN, including assets outside Schedule 16C under paragraph (c)	Section 20AN, confined to Schedule 16C	Cayman offshore regime	Same
Carve-backs from the exemp­tion	Section 20AS: direct trading or business under­taking in Hong Kong in non-Schedule 16C assets, and holding such assets to generate income	None	None	None
Tax status tied to regula­tory status	Yes, by Depart­mental practice: DIPN 61 paragraph 71 — cancel­lation of SFC regis­tration removes the exemp­tion	No	No	No
Govern­ment grant	Yes, up to HK$300,000	No	No	No
Re-domici­liation into Hong Kong	Yes, since 1 November 2021, Division 8A	Yes, since 1 November 2021, Part 7A, Form LPF10	—	—
Public register	OFC Register, publicly search­able	LPF Register, basic search free, HK$13 per document	Limited	Limited

The Market in Numbers: How Many OFCs and LPFs There Actually Are

As at July 2026 the Companies Registry recorded 765 open-ended fund companies and 1,842 limited partnership funds on their respective registers.

The 2026 trajectory, per Companies Registry data:

Month, 2026	OFCs on the register	LPFs on the register
January	685	1,387
February	701	1,424
March	715	1,488
April	723	1,565
May	741	1,652
June	752	1,729
July	765	1,842

At the end of 2025 there were 1,347 LPFs on the register — growth of roughly 37% across the first seven months of 2026.

Author’s assessment: the LPF is growing markedly faster than the OFC, and the gap is widening. Between January and July 2026 the OFC count rose by 80 and the LPF count by 455. That cuts against the logic of the grant: public money supports precisely the vehicle that is growing more slowly.

Do not confuse two different counts. The SFC counts the OFCs it has registered. The Companies Registry counts OFCs incorporated and remaining on the register (765 as at July 2026). Registration and incorporation are sequential steps, and cancellations are recorded on different cycles, so the figures neither match nor should.

The SFC’s own count is published in its industry survey: 676 registered OFCs as at 31 December 2025 and 715 as at 31 March 2026. The source is the Asset and Wealth Management Activities Survey 2025, released by the SFC on 2 July 2026. The survey’s wording is exact: “the number of registered open-ended fund companies (OFCs) increased 43% YoY to 676”, and then “further increased by 6% to 715”.

The survey also supplies the market context without which a count of vehicles means little:

SFC survey metric for 2025	Value	Change on 2024
Assets under manage­ment, total	HK$42,202 billion (HK$42.2 trillion) — a record high	+20%
Net fund inflows	HK$2,065 billion	+193%
Regis­tered OFCs at 31 December 2025	676	+43%
Regis­tered OFCs at 31 March 2026	715	—

Author’s assessment: the 193% inflow figure and the 43% OFC figure describe different things and must not be conflated. The first is money across the industry as a whole, including asset management, advisory and private banking; the second is the count of registered vehicles of one specific type. Rising AUM is not evidence that the OFC is the preferred vehicle: over the same period the LPF count on the Companies Registry grew substantially faster.

A figure worth holding alongside the fund counts: per the 2026-27 Budget Speech, the number of single-family offices in Hong Kong exceeds 3,300.

Step by Step: Choosing and Launching the Structure

Step 1. Fix the investment perimeter before choosing the vehicle. If the strategy sits within the eleven asset classes of Schedule 16C, both vehicles are available. If it systematically steps outside them, the section 20AN exemption survives only for an OFC — under paragraph (c) of subsection (2). Check section 20AS immediately: it carves out of that extension any direct trading or business undertaking in Hong Kong in non-Schedule 16C assets, and the holding of such assets to generate income.

Step 2. Check whether you have a Type 9 licensed manager. For an OFC this is a statutory requirement (section 112Z) and cannot be worked around. For an LPF there is no formal requirement, but if asset management is in fact carried on in Hong Kong, the licence is required under the Securities and Futures Ordinance.

Step 3. If there is no licensed manager, test the “qualified investment fund” route. It requires all three of: more than four investors after final closing, over 90% of capital commitments from investors, and no more than 30% of net proceeds to the originator and its associates. For a single-family fund or a club deal, this route is closed.

Step 4. Price the grant. Incorporating an OFC creates an entitlement to 70% of eligible expenses paid to Hong Kong providers, up to HK$150,000 for a private and HK$300,000 for a public OFC. An LPF creates none. Note the restriction: one OFC per investment manager, and no repeat grants.

Step 5. Diarise the three-month grant deadline from the date of the certificate of incorporation. A missed deadline cannot be revived.

Step 6. For an OFC, decide between a single fund and an umbrella with sub-funds. The SFC fee differs: HK$5,000 against HK$10,000 plus HK$1,250 per sub-fund. No maximum number of sub-funds is prescribed.

Step 7. For an OFC, line up the custodian early. A private OFC may use a Type 1 licence holder subject to five conditions, including paid-up capital of at least HK$10 million and liquid capital of at least HK$3 million and independence from the investment manager. A custodian is always mandatory, and the appointment requires SFC approval.

Step 8. For an LPF, engage a Hong Kong law firm or solicitor. The application cannot be filed directly: that is the requirement of section 11 of Cap. 637.

Step 9. For an LPF, identify the AML/CTF responsible person from the closed class: an authorized institution, a licensed corporation, an accounting professional or a legal professional. The general partner may fill the role only if it falls within one of those categories.

Step 10. Screen resident investors against both gateways of section 20AX, not just the threshold. Subsection (2) sets the 30% threshold counted with associates; subsection (3) applies with no threshold at all where the fund is an associate of the resident. Run the same test under section 20AY for special purpose entities.

Step 11. For carried interest, settle HKMA certification in advance. Under the law as it stands, the 0% rate is unavailable without certification, and certification is in practice oriented to private equity. The 2026 Bill proposes to abolish it, but the Bill has not been passed.

Step 12. Test the substance thresholds across all regimes at once. For carried interest and the FIHV regime they already apply: two full-time employees and HK$2,000,000 of Hong Kong operating expenditure. The 2026 Bill extends comparable requirements to the unified funds exemption.

Step 13. On an LPF re-domiciliation, begin the foreign deregistration before filing in Hong Kong. Section 82E allows 60 days after the Hong Kong registration date, and non-compliance entitles the Registrar to strike the fund off.

Step 14. Decide whether to file the 2025/26 return on the proposed basis. The Inland Revenue Department permits it as a transitional measure, but with an obligation to revise the return if the Bill changes in the Legislative Council.

Step 15. Set the annual calendar. For an LPF: the annual return on Form LPF5 within 42 days of the registration anniversary, and change notifications within 15 days. For an OFC: no annual return to the Companies Registry, but almost every change requires SFC approval and a fee.

Common Mistakes and What They Cost

Mistake 1. Planning a private OFC’s investment perimeter on the “90/10” rule. The test requiring at least 90% of gross asset value to consist of Type 9 asset types was abolished by the 11 September 2020 edition of the Code. Cost: abandoning a private equity or real asset strategy in an OFC because of a restriction that has not existed for six years — and, as a result, choosing an LPF where an OFC would have delivered both the wider exemption under section 20AN(2)(c) (within the section 20AS carve-backs) and a grant of up to HK$300,000. The source of the error is known: the SFC’s files-current directory at the obvious URL still serves the superseded July 2018 edition.

Mistake 2. Reading section 20AN(2)(c) without section 20AS. The extension of the exemption to assets outside Schedule 16C does not operate where the OFC carries on a direct trading or direct business undertaking in Hong Kong in such assets, or holds them to generate income — section 20AS excludes both cases expressly. Cost: the structure is built for an advantage that does not exist in the form intended, and the profits of that block are taxed at 16.5%. Note separately that the link between tax and regulatory status is made not by section 20AS but by paragraph 71 of DIPN 61 — a practice note issued in June 2020 and never revised.

Mistake 3. Expecting an LPF to qualify for the grant. The scheme covers OFCs and REITs only. Cost: up to HK$300,000 of Government money irrecoverably foregone on a structure — on a decision taken once, at the outset.

Mistake 4. Missing the three-month grant application window. The application is due within three months of the certificate of incorporation. Cost: the grant is lost entirely, and since 11 April 2025 the one-OFC-per-manager rule and the no-repeat-grant rule mean the same manager gets no second attempt.

Mistake 5. Treating the 5% incidental transactions threshold as a slice. On DIPN 61, breaching it removes the exemption from all incidental-transaction profits, not merely the excess. Cost: exceeding the threshold by a fraction of a percentage point taxes the whole incidental block at 16.5%. The 2026 Bill removes the threshold, but it has not been passed.

Mistake 6. Testing sections 20AX and 20AY against the 30% threshold only. Subsection (2) does set a 30% threshold counted with associates, but subsection (3) creates a second deeming gateway with no threshold at all: it is enough that the fund itself is an associate of the resident. Cost: a structure in which the Hong Kong manager or its group holds a token interest passes the “under 30%, therefore clean” test and is caught anyway. The tax arises where nobody was looking for it — at the investor, not the fund — and is usually discovered on audit rather than at structuring.

Mistake 7. Seating an LPF limited partner in a decision-making body without checking Schedule 2. Section 26(5) moves that partner to joint, several and unlimited liability alongside the general partner for the period of participation. The eighteen items of Schedule 2 cover nearly everything an institutional investor normally wants — but the two “day-to-day management” qualifications (items 6 and 18(h)) mark the line beyond which there is no protection. Cost: the loss of the very point of the limited liability structure — in exchange for a committee seat.

Mistake 8. Starting an LPF re-domiciliation without preparing the foreign deregistration. Section 82E allows 60 days after the Hong Kong registration. Cost: the Registrar strikes the fund off — when an offshore deregistration typically requires tax and audit confirmations and does not fit into two months.

Mistake 9. Assuming carried interest is automatically taxed at 0%. Under the law as it stands, HKMA certification is required — and is in practice oriented to private equity — plus two full-time employees and HK$2,000,000 of Hong Kong expenditure, plus a hurdle-rate structure. Cost: income planned for at 0% is taxed at 16.5%, and on the employee side at full salaries tax rates.

Mistake 10. Building for the FIHV regime without checking the HK$240 million threshold and the “no more than 50” rule. The regime requires an irrevocable election, aggregate Schedule 16C assets of at least HK$240,000,000, a family beneficial interest of at least 95% and no more than 50 FIHVs managed by one office. Cost: the concession does not apply, while the losses on the “concessionary” transactions have already been ring-fenced.

Mistake 11. Filing the 2025/26 return on the basis proposed in the Bill without pricing the risk. The Department’s transitional measure is expressly “subject to scrutiny by the Legislative Council”. Cost: if the Bill changes, the return must be revised, and the obligation to notify the Department rests on the taxpayer.

Mistake 12. Citing “section 22 of Cap. 112” as the source of the carried interest concession, or section 20AH as the source of the OFC exemption. The carried interest concession is delivered through Schedule 16D; section 22 governs the assessment of partnerships. Section 20AH was repealed by the 2019 Ordinance. The cost in money is small, but it identifies the source: anyone citing section 20AH today is working from text repealed seven years ago.

Who the OFC Suits, Who the LPF Suits, and When Professional Review Is Needed

The OFC suits Type 9 licensed managers launching a liquid or multi-strategy platform, planning several sub-funds under one wrapper, and wanting the Government grant. A further argument in favour is the extended exemption under section 20AN(2)(c), reaching assets outside Schedule 16C — though it must be read together with section 20AS, which carves out direct trading in such assets in Hong Kong and holding them to generate income. A further argument against is the need for SFC approval of almost every change, and the Departmental practice tying the exemption to continued registration.

The LPF suits private equity, venture, credit and infrastructure funds with a closed life, where maximum contractual freedom over contributions, distributions and clawback is what matters. Section 16(2)(g) delivers that freedom, and the only hard constraint is the solvency test in section 17. There is no mandatory custodian, and Cap. 637 requires no SFC licence. The price is no grant and a hard tie to Schedule 16C.

Neither vehicle suits a business trading on its own capital. The FSTB statement of 12 August 2026 puts it directly: activity “using proprietary capital with a view to generating profits on its own account… does not fall within the definition of ‘fund’”. It follows that such a business cannot pay eligible carried interest either.

The FIHV regime suits a single family with qualifying assets of at least HK$240 million, prepared to maintain at least two full-time employees in Hong Kong and to incur at least HK$2 million of operating expenditure there.Below those thresholds the regime is unavailable and the structure runs on ordinary rules.

Professional review is needed in seven situations. First, where the strategy systematically steps outside Schedule 16C and the decision rests on section 20AN(2)(c), while section 20AS carves out direct trading in such assets in Hong Kong and holding them to generate income. Second, where investors include Hong Kong residents approaching a 30% holding, or persons associated with the fund. Third, where an LPF limited partner wants a seat on a decision-making body. Fourth, where a re-domiciliation is planned and the sixty-day window in section 82E must be synchronised. Fifth, where a carried interest claim is contemplated and the prospects of HKMA certification must be weighed against the likelihood of the Bill passing. Sixth, where the choice is whether to file the 2025/26 return on the proposed basis. Seventh, where there are intra-group flows between the manager, advisory companies and the fund that must be shown to be at arm’s length — the mechanics of which are covered in Transfer Pricing in Hong Kong 2026.

Two questions deserve separating, because they are conflated more often than any others. Registering a fund and establishing its tax status are separate procedures before separate authorities under separate statutes. For an LPF they are fully separate: the Registrar of Companies registers the fund, the Inland Revenue Department assesses the exemption, and neither depends on the other. For an OFC they are joined — but the join is made by Departmental practice (DIPN 61 paragraph 71) rather than by the text of section 20AS, and that distinction matters when pricing the risk.

FAQ

What is an OFC in Hong Kong, in plain terms?

An open-ended fund company is a variable capital corporation created under Part IVA of the Securities and Futures Ordinance (Cap. 571) specifically to operate as an investment fund. It can issue and redeem shares at investor demand and can be divided into sub-funds whose liability is segregated by statute (section 112S). The regime has been in force since 30 July 2018; as at July 2026 the Companies Registry recorded 765 OFCs.

How does an LPF differ from an OFC?

An LPF has no legal personality and is registered by the Registrar of Companies with no SFC involvement; an OFC is a corporation and is registered by the SFC. The LPF is built for private equity and maximum contractual freedom between partners; the OFC for liquid and multi-strategy platforms. An OFC must have a custodian and a Type 9 licensed manager; Cap. 637 requires neither for an LPF. An OFC is eligible for the Government grant; an LPF is not.

Does creating an LPF require an SFC licence?

The Limited Partnership Fund Ordinance itself requires none. Section 20 permits the investment manager to be a Hong Kong resident, a company or a registered non-Hong Kong company. But if the manager in fact carries on asset management in Hong Kong as a regulated activity, a Type 9 licence is required under the Securities and Futures Ordinance regardless of Cap. 637.

What does it cost to register an OFC in Hong Kong?

A private single OFC: HK$5,000 in SFC fees plus HK$3,034 in Companies Registry fees. A private umbrella OFC: HK$10,000 plus HK$1,250 per sub-fund, plus the same HK$3,034. A public OFC pays no separate registration fee but goes through product authorisation: an application fee of HK$20,000 or HK$40,000, an authorisation fee of HK$10,000 or HK$20,000, and an annual fee of HK$6,000 or HK$7,500 plus HK$4,500 per sub-fund. A private OFC pays no SFC annual fee.

What does it cost to register an LPF?

HK$3,034 on Form LPF1, plus business registration fees. The annual return on Form LPF5 costs HK$105, a change notification HK$26, and deregistration HK$420. The certificate is normally issued within four working days of receipt of the application.

How large is the SFC grant and who can obtain it?

70% of eligible expenses paid to Hong Kong-based service providers, capped at HK$300,000 for a public OFC, HK$150,000 for a private OFC and HK$5,000,000 for a REIT — the parameters in force since 11 April 2025. The application is due within three months of incorporation. A maximum of one OFC per investment manager applies, and no repeat grants are made. Applications are accepted until 9 May 2027. An LPF is not eligible.

Does a Hong Kong fund pay profits tax?

No, where the profits arise from transactions in Schedule 16C assets and one of the two conditions in section 20AN(3) is met — the transactions are carried out or arranged in Hong Kong by a licensed person, or the fund is a qualified investment fund. The exemption applies whether or not the fund’s central management and control is exercised in Hong Kong. For an OFC the exemption also reaches assets outside Schedule 16C.

Is carried interest taxed in Hong Kong?

At 0% for profits tax, and excluded in full from employment income for salaries tax — but only where the conditions in Schedule 16D are met. The key ones are HKMA certification of the fund, at least two full-time employees in Hong Kong, at least HK$2,000,000 of Hong Kong operating expenditure, and a hurdle-rate structure. The regime applies to carried interest received on or after 1 April 2020.

Can a Cayman fund be moved to Hong Kong?

Yes, since 1 November 2021. A corporate fund re-registers as an OFC under Division 8A of Part IVA of Cap. 571; a partnership as an LPF under Part 7A of Cap. 637, on Form LPF10 with a fee of HK$3,034. No new legal entity is created, identity and continuity are preserved, and no stamp duty arises. For an LPF there is a hard condition: deregistration in the former jurisdiction within 60 days of the Hong Kong registration.

What does the 2026 Bill change?

Five limbs, per the official press release: expanding the definition of “fund”, expanding the scope of qualifying investments, removing the 5% incidental transactions threshold, relaxing the exemption for special purpose entities, and a package of carried interest enhancements. A sixth runs the other way: a tax reporting mechanism and economic substance requirements modelled on the FIHV regime. The Bill was gazetted on 12 June 2026, read for the first time on 24 June 2026, and had not been passed as at August 2026; the intended effect is retrospective from the year of assessment 2025/26.

Does an OFC need a company secretary and an annual return?

Neither. The Companies Registry FAQ confirms that, unlike a company incorporated under the Companies Ordinance, an OFC need not appoint a company secretary, does not report share capital information, does not register charges and does not deliver annual returns. The administrative burden is lighter than an ordinary company’s; the regulatory burden is heavier.

Can an LPF limited partner take part in the fund’s decisions?

Within the list in Schedule 2, yes — and it does not count as taking part in management (section 27(1)(a)). The eighteen items of Schedule 2 cover serving on a board or committee of the fund, advising and approving the general partner, voting on and vetoing proposed transactions, and taking part in decisions about extending the fund’s term, changing the management team and changing the investment scope. The list is not closed: section 27(2) expressly provides that the enumeration in Schedule 2 “does not limit” the circumstances in which a partner is not regarded as taking part in management. The danger zone is day-to-day management: items 6 and 18(h) are qualified in exactly those words. Outside the safe harbour, section 26(5) moves the limited partner to joint, several and unlimited liability for the period of participation.

Key Takeaways

Hong Kong offers two domestic fund vehicles: the OFC, corporate with statutory segregated sub-funds under section 112S, and the LPF, contractual and without legal personality.

The OFC regime has run since 30 July 2018 and the LPF regime since 31 August 2020.

As at July 2026 the Companies Registry recorded 765 OFCs and 1,842 LPFs; the LPF is growing markedly faster.

Investment restrictions on private OFCs were abolished on 11 September 2020 — the “90/10” rule no longer applies, notwithstanding what the SFC’s “current” directory still serves.

An OFC’s investment manager must hold a Type 9 licence or registration under section 112Z; Cap. 637 imposes no such requirement on an LPF, but the Securities and Futures Ordinance may require a licence independently.

A custodian is mandatory only for an OFC; an LPF has only the general partner’s duty to ensure proper custody under section 22.

The section 20AN profits tax exemption applies whether or not the fund’s central management and control is in Hong Kong — since 1 April 2019.

Only an OFC is exempt on assets outside Schedule 16C — section 20AN(2)(c) — but section 20AS excludes from that a direct trading or business undertaking in Hong Kong in such assets, and holding them to generate income.

The tie between an OFC’s tax status and its SFC registration is made not by section 20AS but by paragraph 71 of DIPN 61 — a practice note issued in June 2020, three months before the current edition of the Code, and never revised since.

The 5% incidental transactions threshold is a cliff: breaching it removes the exemption from all such profits, not merely the excess.

Section 20AX has two deeming gateways: subsection (2) sets a 30% threshold counted with associates, and subsection (3) applies with no threshold at all where the fund is itself an associate of the resident.

Carried interest is taxed at 0% and excluded in full from salaries tax under Schedule 16D, subject to HKMA certification, two full-time employees and HK$2,000,000 of Hong Kong expenditure.

The FIHV regime gives 0% where assets are at least HK$240,000,000, with two employees, HK$2,000,000 of expenditure, a family interest of at least 95% and no more than 50 FIHVs per family office.

The grant covers 70% of eligible expenses up to HK$300,000 for a public and HK$150,000 for a private OFC; the application is due within three months of incorporation; one OFC per manager; open until 9 May 2027. An LPF is not eligible.

Re-domiciliation into Hong Kong has been available since 1 November 2021 and creates no new legal entity; for an LPF a hard 60-day window applies to the foreign deregistration.

The 2026 Bill was gazetted on 12 June 2026, introduced on 24 June 2026 and had not been passed as at August 2026; alongside the expansions it introduces economic substance requirements and a tax reporting mechanism.

Summary

Hong Kong offers two domestic fund vehicles. The open-ended fund company (OFC) is a variable capital corporation under Part IVA of the Securities and Futures Ordinance (Cap. 571), inserted by Ord. No. 16 of 2016 and in force since 30 July 2018; the detail sits in Cap. 571AQ (L.N. 97 of 2018), Cap. 571AR (L.N. 98 of 2018) and the Code on Open-ended Fund Companies in its September 2020 edition. The limited partnership fund (LPF) is a partnership fund under the Limited Partnership Fund Ordinance (Cap. 637), Ord. No. 14 of 2020, in force since 31 August 2020; an LPF has no legal personality and is registered by the Registrar of Companies with no SFC role. As at July 2026 the Companies Registry recorded 765 OFCs and 1,842 LPFs. An OFC must have a custodian (section 112ZA), an investment manager licensed or registered for Type 9 regulated activity (section 112Z) and at least two directors who are natural persons, of whom at least one is independent; segregated liability between sub-funds is statutory (section 112S). An LPF must have a general partner with unlimited liability, an investment manager, an AML/CTF responsible person drawn from a closed class, and an independent auditor; no custodian is mandatory. Registering a private single OFC costs HK$5,000 in SFC fees (HK$10,000 plus HK$1,250 per sub-fund for an umbrella) plus HK$3,034 in Companies Registry fees; registering an LPF costs HK$3,034 on Form LPF1, with the certificate normally issued within four working days. A private OFC pays no SFC annual fee; a public OFC pays product authorisation fees under Cap. 571AF. Both vehicles are taxed under the unified funds exemption introduced by Ord. No. 5 of 2019 with effect from 1 April 2019: section 20AN exempts profits from transactions in the eleven asset classes of Schedule 16C, provided the transactions are carried out or arranged in Hong Kong by a licensed person or the fund is a qualified investment fund (more than four investors, over 90% of capital commitments, no more than 30% of net proceeds to the originator). The exemption applies whether or not central management and control is exercised in Hong Kong. Only an OFC is also exempt on assets outside Schedule 16C, under section 20AN(2)(c) — but section 20AS carves out a direct trading or business undertaking in Hong Kong in such assets and the holding of such assets to generate income, and paragraph 71 of DIPN 61 additionally ties the exemption to continued SFC registration. Profits from incidental transactions are exempt only up to a 5% ratio, and breaching it removes the exemption from all such income. Sections 20AX and 20AY deem the fund’s profits to be those of a Hong Kong resident through two independent gateways: a beneficial interest of not less than 30% counted with associates (subsection (2)), and, with no threshold at all, where the fund is itself an associate of the resident (subsection (3)). Carried interest is taxed at 0% under Schedule 16D, introduced by Ord. No. 9 of 2021 with effect from 1 April 2020, subject to HKMA certification of the fund, at least two full-time employees and HK$2,000,000 of Hong Kong operating expenditure; 100% is excluded from salaries tax. The FIHV regime under Schedule 16E, introduced by Ord. No. 8 of 2023 with effect from 1 April 2022, gives 0% where assets are at least HK$240,000,000, with two employees, HK$2,000,000 of expenditure, a family interest of at least 95% and no more than 50 FIHVs per family office. The grant administered by the SFC covers 70% of eligible expenses paid to Hong Kong providers, capped at HK$300,000 for a public OFC, HK$150,000 for a private OFC and HK$5,000,000 for a REIT — the parameters in force since 11 April 2025, with applications accepted until 9 May 2027 and one OFC per manager; an LPF is not eligible. Foreign funds have been able to re-domicile to Hong Kong since 1 November 2021, under Division 8A of Part IVA of Cap. 571 for OFCs and Part 7A of Cap. 637 for LPFs, with no new legal entity and no stamp duty; an LPF must deregister abroad within 60 days. 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, read for the first time on 24 June 2026 and had not been passed as at August 2026; it expands the definition of “fund” and the list of qualifying investments, removes the 5% threshold, relaxes the SPE exemption, enhances the carried interest regime and, at the same time, introduces a tax reporting mechanism and economic substance requirements.

How UPPERSETUP Helps

Choosing between an OFC and an LPF is not a choice between a corporation and a partnership — it is a choice between a wider tax exemption tied permanently to regulatory standing, and full contractual freedom with no grant. UPPERSETUP helps map an investment strategy against Schedule 16C, test whether the qualified investment fund route is available where there is no licensed manager, price the grant and meet the three-month filing window, structure a re-domiciliation around the sixty-day window, and assess resident investors’ exposure under sections 20AX and 20AY. An overview of services by jurisdiction is on the Hong Kong page. Adjacent questions are covered in Hong Kong + UAE: Dual Structure for International Business 2026 and Disputing an IRD Assessment in 2026.

Sources

Open-ended fund companies: legislation and regulator

1.        Securities and Futures (Amendment) Ordinance 2016 (Ord. No. 16 of 2016) — insertion of Part IVA, Gazette copy

2.        SFC — open-ended fund companies: the regime, fees and forms

3.        Code on Open-ended Fund Companies, September 2020 edition (in force)

4.        SFC — register of codes and guidelines: current and previous versions of the Code on Open-ended Fund Companies

5.        SFC — frequently asked questions on open-ended fund companies, edition of 18 September 2025

6.        SFC — presentation materials on the OFC regime, 11 September 2020

7.        SFC — consultation conclusions on proposed enhancements to the OFC regime, September 2020

8.        SFC — fees for authorisation of unit trusts and mutual funds (the Cap. 571AF scale)

9.        SFC — uncertificated securities market legislation, code and guidelines, including L.N. 18 of 2025

10.    Government — commencement of the uncertificated securities market regime on 16 November 2026

11.    Securities and Futures (Open-ended Fund Companies) (Fees) Regulation (Cap. 571AR) — L.N. 98 of 2018 Gazette text

12.    Securities and Futures (Amendment) Ordinance 2021 (Ord. No. 33 of 2021) — OFC re-domiciliation and the new fee items, Gazette copy

13.    Limited Partnership Fund and Business Registration Legislation (Amendment) Ordinance 2021 (Ord. No. 34 of 2021) — LPF re-domiciliation, Gazette copy

14.    Securities and Futures (Open-ended Fund Companies) Rules (Cap. 571AQ) — text of L.N. 97 of 2018 as gazetted

15.    Hong Kong e-Legislation — Cap. 571AQ, rule 20 “Change of address of registered office”, version of 30/07/2018

16.    Hong Kong e-Legislation — Cap. 571AQ, rule 102 “Non-resident director to have process agent”, version of 30/07/2018

17.    Hong Kong e-Legislation — Cap. 571AQ, rule 158 “Implied terms implied in contracts with open-ended fund company with sub-funds”, version of 30/07/2018

18.    Hong Kong e-Legislation — Cap. 571AR, Schedule 1 “Fees Payable to Commission”, version of 01/11/2021

19.    Hong Kong e-Legislation — Cap. 571AR, Schedule 3 “Miscellaneous Fees Payable to Registrar”, version of 01/11/2021

Open-ended fund companies: Companies Registry

20.    Companies Registry — overview of the open-ended fund company regime

21.    Companies Registry — frequently asked questions on OFCs

22.    Companies Registry — OFC specified forms and fees

23.    Companies Registry — statistics: OFCs remaining on the register

24.    Companies Registry — Gazette notices for the OFC regime

Limited partnership funds

25.    Limited Partnership Fund Ordinance (Cap. 637) — consolidated text hosted by the Companies Registry

26.    Companies Registry — overview of the LPF regime

27.    Companies Registry — frequently asked questions on LPFs

28.    Companies Registry — pamphlet “Registration of a Limited Partnership Fund”

29.    Companies Registry — LPF specified forms and fees

30.    Companies Registry — presentation on the Limited Partnership Fund Ordinance

31.    Companies Registry — statistics: LPFs remaining on the register

32.    Companies Registry — Gazette notices specifying LPF forms

33.    FSTB — Legislative Council Brief on the Limited Partnership Fund Bill, March 2020

34.    Government — passage of the Limited Partnership Fund Bill by the Legislative Council, 9 July 2020

35.    Hong Kong e-Legislation — Cap. 637, Schedule 2 “Activities not Regarded as Management of Limited Partnership Fund”, version of 31/08/2020

36.    Hong Kong e-Legislation — Cap. 637, section 27 “Activities conducted by limited partner”

37.    Hong Kong e-Legislation — Cap. 637, section 65 “Registrar may send inquiry letter to general partner”

38.    Hong Kong e-Legislation — Cap. 637, section 67 “Registrar may strike off limited partnership fund’s name”

Tax legislation and guidance

39.    Inland Revenue Department — table of amendments to the Inland Revenue Ordinance since 2003

40.    Inland Revenue (Profits Tax Exemption for Funds) (Amendment) Ordinance 2019 (Ord. No. 5 of 2019) — Gazette copy

41.    DIPN 61 — the Department’s practice note on the unified funds exemption

42.    Inland Revenue Department — index of Departmental Interpretation and Practice Notes with edition dates

43.    Inland Revenue (Amendment) (Tax Concessions for Carried Interest) Ordinance 2021 (Ord. No. 9 of 2021) — Gazette copy

44.    FSTB — Legislative Council Brief on the carried interest Bill, January 2021

45.    Inland Revenue Department — frequently asked questions on eligible carried interest

46.    Hong Kong Monetary Authority — opening of applications for certification of funds, 16 July 2021

47.    Hong Kong Monetary Authority — Guideline on Certification of Funds under Schedule 16D to the Inland Revenue Ordinance

48.    Inland Revenue (Amendment) (Tax Concessions for Family-owned Investment Holding Vehicles) Ordinance 2023 (Ord. No. 8 of 2023) — Gazette copy

49.    Inland Revenue Department — tax concessions for family-owned investment holding vehicles

50.    Inland Revenue Department — supplementary forms to the profits tax return

51.    Inland Revenue Department — profits tax rates, including the two-tiered rates

52.    Hong Kong e-Legislation — Cap. 112, section 20AS “When does exemption under section 20AN not apply to open-ended fund companies”, version of 01/04/2019

53.    Hong Kong e-Legislation — Cap. 112, section 20AX “Assessable profits of funds regarded as assessable profits of resident persons”

54.    Hong Kong e-Legislation — Cap. 112, Schedule 16E, version in force of 06/06/2025 bearing the note “Amended 21 of 2025 s. 32”

55.    Hong Kong e-Legislation — Cap. 112, Schedule 61 “GloBE Rules”: the definition of an excluded entity

56.    Inland Revenue (Amendment) (Minimum Tax for MNE Groups) Ordinance 2025 (Ord. No. 21 of 2025) — Gazette copy

The SFC Grant Scheme

57.    SFC — Grant Scheme for Open-ended Fund Companies and Real Estate Investment Trusts

58.    SFC — terms and conditions of the Grant Scheme, as at 11 April 2025

59.    SFC — frequently asked questions on the Grant Scheme, edition of 2 May 2025

60.    SFC — press release updating the Grant Scheme parameters, 31 March 2025

61.    Government — extension of the Grant Scheme, 26 April 2024

62.    SFC — list of registered open-ended fund companies

63.    SFC — Annual Report 2021-22, products chapter and the launch of the Grant Scheme

64.    SFC — Asset and Wealth Management Activities Survey 2025, published 2 July 2026

65.    SFC — periodic reports and surveys, with publication dates

66.    SFC — frequently asked questions on open-ended fund companies

The 2026 Bill and policy

67.    Government — gazettal of the Bill on preferential tax regimes, 12 June 2026

68.    Inland Revenue Department — press release on gazettal of the Bill, 12 June 2026

69.    FSTB — response to media enquiries on the preferential tax regime for carried interest, 12 August 2026

70.    Budget Speech 2026-27, paragraph 98 — asset and wealth management

71.    LCQ18 of 22 April 2026 — new classes of qualifying investments

72.    LCQ12 of 2 April 2025 — completion of the industry consultation

73.    FSTB — blog on the development of the asset management sector, 10 February 2026

74.    FSTB — asset and wealth management policy page

75.    Inland Revenue Department — “What’s New”, including the transitional measure for 2025/26 returns

Commentary used for cross-checking (Level 2)

76.    Deacons — Hong Kong enhances tax regimes for funds, family offices and carried interest, 24 June 2026

77.    Baker McKenzie — enhanced tax concession regimes for funds, family offices and carried interest, July 2026

78.    DLA Piper — enhanced preferential tax concession regimes for funds, July 2026

79.    KPMG — Hong Kong family office tax regime, June 2026

80.    Akin Gump — Hong Kong to adopt a limited partnership regime for funds

81.    Proskauer — the arrival of Hong Kong’s limited partnership fund regime

82.    KPMG — new limited partnership fund regime in Hong Kong becomes law, July 2020

Disclaimer

This material is provided for information purposes only and does not constitute legal, tax, financial, investment or consulting advice. Before taking any decision you should obtain individual professional advice reflecting your specific circumstances, jurisdiction, company status and the current requirements of the relevant regulators.

Publication date: August 2026.