In this video, we dive into Hong Kong's 2024 tax updates and the significant changes coming to the tax regime for funds, investments, and compliance requirements. From new tax exemptions to expanded investment scopes, this update covers the latest shifts announced by the Financial Services and Treasury Bureau. Learn about the removal of the 5% cap on incidental income, the inclusion of virtual assets like Bitcoin, and the new substantial activity requirements for funds to qualify for tax exemptions. Stay tuned for Part 2, where we'll cover carried interest tax concessions, family investment vehicles, and more compliance updates. Don't forget to like, comment, and subscribe for more tax insights!
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Hong Kong Tax Regime Enhancements - Part 1
Did you know? By 2025, funds in Hong Kong must spend HK$2 million annually locally and employ two staff to qualify for tax exemptions!
Hong Kong’s 2024 tax updates now cover a broader range of investments, including virtual assets like Bitcoin and carbon credits.
Welcome to Part 1 of our two-part series of comprehensive update on Hong Kong’s tax policy changes, announced on 25 November 2024 through a consultation paper issued by the Financial Services and Treasury Bureau. These updates aim to solidify Hong Kong’s position as a global leader in asset and wealth management. Today, we’ll explore the significant changes and key figures shaping this exciting evolution, including enhancements to tax exemptions, broader investment scopes, and updated compliance requirements.
On 25 November 2024, the Financial Services and Treasury Bureau proposed several enhancements to the Unified Fund Exemption regime. The scope of eligible funds has been expanded to include pension funds and endowment funds, alongside the existing inclusion of sovereign wealth funds. For investments, the list of qualifying assets under Schedule 16C has grown to include loans, private credit investments, insurance-linked securities, emission derivatives, and virtual assets like Bitcoin and Ethereum.
An important update is the removal of the 5% cap on incidental income, which previously restricted tax exemptions. Now, all qualifying transactions will be fully tax-exempt. To align with international standards, funds must meet new substantial activities requirements, including employing at least two qualified employees and incurring a minimum annual operating expenditure of HK$2 million in Hong Kong. These measures underscore the government’s commitment to fostering local economic contributions while attracting international investment.
That’s it for Part 1 of our series. Stay tuned for Part 2, where we’ll dive into carried interest tax concessions, family investment vehicles, and additional compliance measures. Don’t forget to subscribe for more updates. Thank you for watching, and don't forget to subscribe.
