To further foster Hong Kong’s position as an asset and wealth management hub, the Hong Kong government has introduced a range of reforms and tax incentives to improve its onshore fund toolbox.  

For instance, the Limited Partnership Fund (“LPF”) regime was introduced in 2020 to boost the setup of private equity and venture capital funds in Hong Kong. Another example is the Unified Funds Exemption (“UFE”) regime, which provides tax exemptions to funds regardless of their tax residence, following certain conditions. 

The benefits of setting up funds in Hong Kong  

      ✅ Pro-investment environment 
      ✅ Competitive tax regime  
      ✅ International connection  

What are the types of funds in Hong Kong? 

Unit Trusts: A unit trust is a collective investment scheme constituted under a trust deed. In this fund structure, investors (also called unit holders) pool their assets, which are then held by the trustee and professionally managed by an independent investment manager. 

Corporate Funds: Investment funds in Hong Kong can also be established as corporate funds, mainly as open-ended fund companies or limited partnership funds (“LPF”). Corporate funds are popular with international investors because of their familiarity and the abundance of service providers available in the jurisdiction. 

Alternative Investment Funds (AIFs): AIFs in Hong Kong are primarily structured as limited partnerships (e.g., Hong Kong LPF and Cayman exempted limited partnerships) or corporates (e.g., Hong Kong OFC, Cayman exempted limited companies and segregated portfolio companies). 

Onshore vs. Offshore Funds 

Hong Kong-based fund promoters often domicile their investment funds in offshore jurisdictions such as the Cayman Islands, the British Virgin Islands and other tax-neutral jurisdictions across various continents.  

The Cayman Islands offers international investors abundant fund structure options and is one of the most popular jurisdictions for setting up offshore funds. 

Our free guide explores the general differences between investment funds in Hong Kong and the Cayman Islands.

Download our free resource today to learn more!

Bolder Group Hong Kong

Considered one of the world’s freest economies, Hong Kong provides growth opportunities to fund managers and investors looking to enter the market. Thanks to its competitive tax climate and business-friendly regulations, the jurisdiction has become a major financial and investment centre. 

With Bolder Group’s team of local fund and corporate administrators, managers and entrepreneurs can easily navigate the market. Bolder Hong Kong structures Cayman, BVI, EU, US and APAC funds and provides corporate solutions for foreign investors interested in setting up a company in Hong Kong. 

Bolder Group does not provide financial, tax or legal advice and the information contained herein is meant for general information purposes only. We strongly recommend that before acting on any of the information contained herein, readers should consult with their professional advisers. The Bolder Group accepts no liability for any errors or omissions in the information, or the consequences resulting from any action taken by a reader based on the information provided herein.

Bolder Group refers to the global network of independent subsidiaries of Bolder Group Holding BV. Bolder Group Holding BV provides no client services. Such services are provided solely by the independent companies within the Bolder Group which are each legally distinct and separate entities and have no authority (actual, apparent, implied or otherwise) to obligate or bind Bolder Group Holding BV in any manner whatsoever. The operations of the Bolder Group are conducted independently and have no affiliation with third party financial, tax or legal advisory firms or corporations.