Hong Kong’s New Tax Break for Offshore Private Equity Funds Raises Questions
Wednesday, July 15, 2015
(Tax Analysts by Yimian Wu) – Practitioners welcome Hong Kong's enactment of Inland Revenue (Amendment) (No. 2) Ordinance 2015, which extends the tax exemption for offshore funds to private equity funds, but observers say there are many concerns that have not yet been addressed.
After the enactment of Revenue Ordinance 2006, private equity funds continued to restrict their Hong Kong activities to advisory services, keeping their management activities outside Hong Kong, according to John Levack, chair of the technical committee of the Hong Kong Venture Capital and Private Equity Association.
With the new legislation, private equity funds will be able to perform management activities in Hong Kong, which will expand their investment and advisory services and increase local hiring. This is in line with the government's hope of further developing Hong Kong as a competitive financial center.
