Signs of room to grow
Friday, May 15, 2015
(China Daily Asia by Oswald Chan) – Hong Kong should not be complacent because more can be done to further fortify the city’s position in the private equity (PE) fund management industry, believe experts.
“The government could provide a benefit to Hong Kong companies and startups by allowing PE funds to invest their capital in local companies without affecting the fund’s tax exemption for non-Hong Kong investments,” Levack told China Daily. “It should also think about expanding the definition of qualifying funds (for profits tax exemption) to include sovereign wealth funds, pension funds and mainland State-owned enterprises, to enrich the investor base of PE industry in the city.”
“We believe there are even larger gains to be made by (further) changes that allow PE funds to come onshore in Hong Kong,” Levack said. “As the mainland is transitioning from being primarily a destination for inbound investment to being a source of capital for outbound investment, (allowing tax exemption for onshore PE funds will enable) Hong Kong to play an active role in advising cross-border investments from the mainland.”
