Is Hong Kong the place to be for family offices?
With more ultra-high-net-worth (UHNW) families deciding to set up an Asian office, the choice of where to make a base is a vitally important one. Hong Kong has long since been a vibrant financial and cultural hub and is increasingly enticing UHNW individuals and families to set up in the city.
But why choose Hong Kong over anywhere else? Christine Ho, deputy global head of FamilyOfficeHK - a dedicated body of the HKSAR Government, offering a wide range of customised services at no cost to families, family offices and family-owned investment or philanthropic entities - explains why she thinks the city is the place to be.
Why is Hong Kong the natural choice for a family office to set up an Asian hub?
Well, there are three key answers to that question. The first is the culture and the lifestyle. People not only want to be able to do business, they want to enjoy their lives as well. Hong Kong has the Chinese culture, but it’s also a real melting pot of different cultures.
Hong Kong was governed by the British for more than 100 years and we still embrace the western world, so that makes the transition very natural to expats. We always say that we have the best of both worlds, that Asian touch and the western approach of doing things.
The second part is about growth. When family offices choose where to land, they look at whether they can capture the business opportunities. Hong Kong is a natural gateway to mainland China and Asia, which is a particularly strong element in this growth.
If you go straight into mainland China, like Shanghai, Shenzhen or Guangzhou, you will be able to capture the opportunities there, but they don't have the comprehensive financial system, including but not limit to free capital flow, Hong Kong has in place. When it comes to the whole value chain, their advantage mainly resides on presenting the opportunities. When it comes to an operation platform that resembles those of the western world in managing company operations, capital flow as well as monetisation of the investment opportunities, they don't have the same infrastructure as Hong Kong. We have a very comprehensive financial infrastructure that not only enables family offices to have access to the opportunities but also provides the ease to capture them.
The last area is about impact and philanthropy. UHNW families, especially the next generation, now focus more on how to do business in a sustainable way. Hong Kong has a long history of doing well and doing good. We keep innovating and coming up with new ideas to keep philanthropy alive and keep up with the trend of impact investing.
How is Hong Kong staying ahead of the game in terms of meeting those client requirements?
The HKSAR government has goals to achieve net zero carbon emissions by 2050 and we have very strong green finance schemes. We encourage the issuing of green bonds and we’re coming up with a transparent and enforceable standard for environmental, social and governance (ESG).
Would you say Hong Kong is more of an integrated melting pot of cultures as opposed to, say, Singapore?
Yes, absolutely. East meets West in every aspect of Hong Kong society. Take education, culture and lifestyle, for example. Hong Kong schools, especially international schools offer multilingual environment. They also instil both Chinese value and Western methodology in their curriculum. Both public and private sectors in Hong Kong promote and encourage preservation of Chinese art and culture. It can be seen everywhere that heritage buildings are preserved and smartly turned into modern use. Museums showcase both eastern and western art pieces. Lastly, in Hong Kong, we don't have separate cultural areas, they're all blended. Wherever you are in Hong Kong, you can find lots of different cuisines and cultures.
What are the key advantages for global UHNW families to set up an office in Hong Kong?
Firstly, it's simple and straightforward to set up a business in Hong Kong. You can set up an overseas company and you can operate it in Hong Kong, no problem. When it comes to the immigration policy, an applicant can apply for permanent residency and naturalise in Hong Kong when you meet the requirements. Those requirements are straightforward so you have better clarity and can plan ahead. The maintenance of Hong Kong permanent residency is simpler that most of the popular migration destinations, such as Singapore and the US. You can maintain your permanent residency as long as you don’t spend more than 36 months continuously out of Hong Kong. I have to say that it is quite democratic, it's just one example of how the rules in Hong Kong are there to make it easier for family offices to come, set up and stay.
As I mentioned above, Hong Kong has a comprehensive finance infrastructure. We see an increasing demand from family offices for sophisticated financial services being handled in one place. Hong Kong can meet the needs of family offices not only in investment, but also in wealth succession, philanthropy/impact and lifestyle.
Can you talk about Hong Kong’s talent pool of private bankers, advisors, asset managers, lawyers, accountants, trustees etc, and how they would be compelling to UHNW families?
Hong Kong has 80% of the top global financial institutions has headquarters in Hong Kong. As a result, they require a good quality of talent, so we are to some extent a training ground for talent in finance. Hong Kong has always been a place where deals are happening. When you do deals, you need to have the whole ecosystem and we naturally have all the talents to ensure a deal is completed.
FamilyOfficeHK is a team of dedicated family office specialists based in Hong Kong, mainland China and Europe, to help families plan, set up and launch their offices in the HKSAR. At the same time, the team has been working hard to build bridges among family offices, their stakeholders, the regulators and Government with an aim to further optimise the family office ecosystem in Hong Kong.
For further information, contact Christine Ho or Dixon Wong at FamilyOfficeHK.
