Family Offices Poised for Promising Growth in Hong Kong

Singapore, which has been the hub for family offices for many years, has lost the crown to Hong Kong as the latter has announced several sops such as tax breaks and an investment-migration programme, the trend of family offices shifting to Hong Kong is expected to continue amid sustained capital inflows.

According to a study published by Deloitte, a multinational professional services network, at the end of 2023, Hong Kong had more than 2,700 single-family offices established to pursue investment, philanthropy and succession planning compared with at the end of last year, compared with about 1,400 in Singapore, the Monetary Authority of Singapore, said.

The Hong Kong government has set a target of attracting 200 large new family offices to the city by 2025. InvestHK, a government agency which supports foreign investment, said it has helped 64 family offices so far to open their offices in Hong Kong, while another 130 were keen to do so.

According to Knight Frank’s inaugural “Rise of the Super Wealth Hub” series which uncovers the transformation of super wealth hubs across the globe, Hong Kong has been serving as a gateway between the Western and Eastern economies.

With the free flow of capital and its well-established regulatory framework, it has become a successful private wealth management hub and an attractive destination for family offices, the report said.

With the government’s active promotion of the development of family office businesses, coupled with the city’s strengths in the private wealth management sector, Hong Kong’s family office sector is flourishing.

“We have seen a rise in interest in the Hong Kong market from family offices and private investors, focusing on the living and residential sectors. In terms of cross-border investment, there remains strong interest in Japan, and despite values having adjusted slightly downward in London, it is still a popular market,” Knight Frank said in the report.

Furthermore, Ultra High Net Worth Individuals (UHNWIs) in general, have seen increased demand in Italy and in particular, Milan, because of the flat-fee non-domiciled tax structure.

Hong Kong’s wealth management sector enjoys a compound annual growth rate of 7.6% and is set to overtake Switzerland by 2027. As the largest hedge fund centre in Asia and the second-largest private equity fund centre in the region after the Chinese mainland, Hong Kong is well positioned for continued growth in the family office sector.

Hong Kong also has a long-standing and proven history as a global financial hub. The city’s connectivity to the Chinese mainland, robust infrastructure, and extensive experience with legislation and compliance have fostered stability, making it an attractive destination for family offices to establish themselves.

Ho-Pin Tung Director, Head of Private Office said that amidst ongoing turbulence, changes in legislation, and subsequent new barriers for family offices in other locations, we anticipate that Hong Kong’s position as a global hub for family offices will continue to grow.

Wealth Grows

Despite the challenging macroeconomic environment, Hong Kong has seen strong momentum in wealth growth among Hong Kong residents.

According to Knight Frank’s Wealth Report released in 2024, Hong Kong has seen an increase in the number of UHNWIs with a net worth of $30 million or more. In 2023, there were 5,957 UHNWIs in Hong Kong, representing a 2.5% annual increase.

If this growth trend continues, it is projected that the UHNWI population in Hong Kong will reach 7,290 by 2028, a significant increase of 22.4%. This growth rate has surpassed other Asian territories, including Japan, Singapore, Taiwan, and Thailand.