Hong Kong is one of the 5 largest financial centers in the world, and every year it attracts an increasing number of entrepreneurs who want to run a business in Asia. The jurisdiction adheres to the principle of an open economy, that has a positive effect on the inflow of foreign investment.
Registering a fund in Hong Kong can be a reliable starting point for creating a profitable business.
Investment fund regulation in Hong Kong
SFC is the main regulator responsible for monitoring the investment funds in Hong Kong.
It is worth considering that the procedure of setting up a fund in Hong Kong requires obtaining of an appropriate license from the regulator. In particular, the investment fund manager undertakes to obtain:
- License of type 1 (for carrying out operations with securities);
- License of type 4 (for providing advising services on securities);
- License of type 9 (for providing asset management services).
For more information about this issue, you can request for legal advice on obtaining an SFC license from YB Case experts.
Registering an investment fund in Hong Kong: legal forms
Those who intend to conduct business in this jurisdiction have the opportunity to establish a private equity fund in Hong Kong by type of:
- Limited partnerships;
- Companies;
- SPV (Special Purpose Vehicle);
- Wealth management company.
Opening an investment fund: requirements for non-residents
Foreign entrepreneurs wanting to register an investment fund in Hong Kong should pay particular attention to the following:
- In order to sell the fund products, non-residents will need to apply for registration or to obtain a permit from the SFC.
- Those who have a Hong Kong branch or decide to establish a local subsidiary can obtain a temporary SFC license.
Types of allowed investors
When planning to set up a fund in Hong Kong, keep in mind that the following may be allowed investors:
- Wealth management companies;
- HNWI;
- Funds of funds;
- Banks;
- Family offices, etc.
Tax treatment for Hong Kong investment funds
If you intend to open a fund in Hong Kong, read the following information regarding taxation conditions:
- Funds located outside this jurisdiction may be exempt from income tax in Hong Kong if certain conditions are met in accordance with the IRO ;
- Retail investment funds are not subject to income tax, provided that they are licensed by SFC;
- If the fund has a corporate structure, investors can be exempt from paying WHT on dividends.
Preparation of documents
Depending on the selected legal forms, the documents required for setting up an investment fund in Hong Kong may include:
- LP Agreement;
- Information on concluding agreements with investors;
- Shareholders' agreement and AOA;
- Memorandum of private placement;
- Investment advisory agreement, etc.
To receive information about the full list of documents, you can order personal legal advice on registering a fund in Hong Kong.
Establishing an investment fund: additional requirements
Those who decide to register an investment fund in Hong Kong should know that, in accordance with the regulator`s requirements, fund managers in Hong Kong need to:
- Submit reports on the availability of material resources, provide records of accounts and annual reports to the SFC.
- Submit information on securities lending, as well as data on liabilities.
How to establish a fund in Hong Kong
By contacting YB Case experts, you can receive qualified assistance in registering an investment fund in Hong Kong. Also, if you have any questions, we recommend that you ask for legal advice on fund regulation in Hong Kong.
To order our services, fill out the special form or use the contacts specified below.
