This Article examines some of the practical considerations when re-domiciling a Cayman Islands limited partnership as a Hong Kong limited partnership fund (the “LPF”).
Certain “eligible carried interest” will soon be charged at a Hong Kong profits tax rate of 0%. This article explores whether the proposed tax concessions may potentially apply beyond typical private equity fund structures, to carried interest that arise from: (i) private equity type investments in the side pocket of an open-ended fund; and (ii) private equity type investments made by a fund / vehicle that are not on a “blind-pool” basis.
The re-domiciliation mechanism to re-domicile an overseas fund as a Hong Kong Open-ended Fund Company (“OFC”) is expected to come into effect imminently. This article answers some of the more common questions we have encountered on the proposed re-domiciliation mechanism.
In early August 2020, the Hong Kong government issued its widely anticipated Consultation Paper on Tax Concession for Carried Interest (the “Consultation Paper”). This represents the latest initiative by the Hong Kong government to achieve its “policy objective of attracting more private equity funds to domicile and operate in Hong Kong”. This Article examines whether or not, and how, the carried interest recipients’ SFC licensing status may have an impact on whether the tax concession for carried interest can be made available to it under the proposals.
With the introduction of the Hong Kong Limited Partnership Fund Regime, there will be, for the first time, a Hong Kong domiciled alternative to using an offshore limited partnership for a fund vehicle.
The SFC has clarified a few important issues in relation to the SFC licensing requirement for private equity fund managers and family offices operating in Hong Kong in 2 separate circulars.
In a recent disciplinary action, the SFC sanctioned a SFC licensed corporation for allowing certain persons, who are not licensed, to carry out regulated functions in relation to its business in regulated activities. It highlights the need for SFC licensed corporations to ensure that those who carry out such regulated functions (which are different to regulated activities) are appropriately licensed.
On 1 November 2018, the Hong Kong Securities and Futures Commission (the “SFC”) issued a number of announcements that would potentially have a regulatory impact on those who conduct financial activities involving virtual assets in Hong Kong.
The Open-ended Fund Company (the “OFC”) regime came into effect on 30 July 2018. With the introduction of the OFC, there is, for the first time, a Hong Kong domiciled corporate vehicle which is suitable to act as a fund vehicle.
In November 2017, the Securities and Futures Commission (“SFC”) published its Consultation Conclusions on certain proposals that would result in changes to the Fund Manager Code of Conduct (the “FMCC”) and the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission (the “Code of Conduct”). These changes represent some of the most significant regulatory changes, at least in the past few years, affecting anyone who conducts any form of asset management business in Hong Kong.
Hong Kong positions itself as a global financial center and the asset management industry is an important sector within the Hong Kong financial services industry. It is a sector which is fast changing, driven by product innovation, market forces and changing legal landscape globally. Hong Kong faces challenges both within the Asian region and globally to maintain its status as a centre for asset management. Has it done enough so far to keep pace?…
The Hong Kong Government gazetted the Inland Revenue (Amendment) (No.2) Ordinance 2015 (the “Ordinance”) on 17 July 2015, extending the profits tax exemption to private equity funds which previously may not have been available to them. The Ordinance will take retrospective effect, applying in respect of tax chargeable for any year of assessment commencing on or after 1 April 2015…
One of the first challenges facing potential alternative fund managers (ie hedge fund, private equity and real estate fund managers) when setting up their new fund management business in HK is getting the appropriate SFC license. This article will examine the key issues often faced by potential alternative fund managers when getting an SFC license and the main requirements for getting an SFC license…