Posted inHong Kong

FamilyOfficeHK on a charm offensive

The government body is promoting Hong Kong as a regional family office hub, despite quarantine restrictions and tighter Beijing control.
Dixon Wong, FamilyOfficeHK

FamilyOfficeHK was recently set up within Invest Hong Kong (InvestHK), part of the Hong Kong government’s initiative to attract overseas enterprises to the territory. It has a dedicated team to promote Hong Kong’s “unique advantages” in local and major markets, according to Dixon Wong, global head of Family Office at InvestHK.

“We aim to provide one-stop services to all the family office investors who are interested in setting up in Hong Kong. We are responsible for representing the government to maintain close liaison with industry stakeholders as well as the regulators,” Wong told FSA.

FamilyOfficeHK also works closely with the immigration department, the Securities and Futures Commission (SFC), and the Hong Kong Monetary Authority to help overseas investors get working visas and required licenses – although the process has been complicated by the 21-day quarantine imposed on foreign arrivals to Hong Kong in the wake of the Covid pandemic.

“We also listen to industry opinions on the development of family offices in Hong Kong, and represent them in discussions with officials drafting new policies and regulations,” Wong said.

FamilyOfficeHK currently has five executives in Hong Kong, two in mainland China and one in Brussels. All five people in Hong Kong have private sector backgrounds, including Wong himself, who was a banker. The others also have experience serving ultra high net worth individuals (UHNWI) and family offices.

Hong Kong is an integrated financial centre, and by leveraging on the city’s role as a traditional wealth asset management centre, the family office industry should be able to capture new business opportunities, according to Wong. “I strongly believe Hong Kong has all the positive and favorable advantages for family offices to set up and operate,” he said.

Currently, no specific licence is needed to set up a family office in Hong Kong, although licences issued by the SFC are required if a family office wants to engage in regulated activities.

According to the Hong Kong Financial Services Development Council, Hong Kong is already Asia’s largest cross- border private wealth management centre, and the second largest globally after Switzerland. It’s cross- border wealth amounted to $1.9trn in 2019, and all the world’s top 15 private wealth managers (by asset under management) are present in Hong Kong.

Asia is generating the strongest growth in private wealth, with the Greater Bay Area (GBA) of Hong Kong, Macau and Guangdong the source of a rapidly rising number of wealthy individuals and families.

According to Knight Frank’s “The Wealth Report 2020”, in the next five years, Asian UHNWI (net worth of over $30m) population will grow by 44%, compared with a 27% global average growth rate. By 2024, the number of UHNWI in mainland China will grow by 58%, and there are now more than 19,300 UHNW families in the GBA, the report found.

Hong Kong edge

Wong also remains confident that Hong Kong still has “well established laws, free flow of information and capital, and a lot of talent in the financial services industry”, despite widespread international concerns about the ever-expanding application of the Beijing-imposed National Security Law.

“Most importantly, Hong Kong provides tax relief benefits which makes it an ideal place to set up a family offices,” he said.

The family office industry in Hong Kong will “hire more people, engage service providers such as lawyers, accountants, compliance officers and more bankers — which will benefit Hong Kong’s economy, according to Wong.

The industry can help channel capital towards investments, such as initial public offerings, private equities, innovation and technology venture capital firms and other alternative investments, which “will enhance the development of Hong Kong’s financial eco-system,” Wong said.

Part of the Mark Allen Group.