The race between the Family Office hubs of Asia has intensified, as Singapore introduced a new tax incentive designed to reward Family Offices that are involved in philanthropy. Hong Kong is now forging closer ties with Saudi Arabia in hopes to maintain its status as the top Family Office hub of Asia.
Chief Executive of Hong Kong John Lee Ka Chiu has reportedly signed bilateral agreements with leaders of Saudi Arabia during his visit to the country. The collaboration agreements covered a multitude of opportunities from investment to cultural exchange. This is anticipated to promote business collaborations and the Family Office industry within the two regions.
Chief Executive John Lee said in the press conference officiated by the Minister of Investment of Saudi Arabia, “Hong Kong has long been the Asia-Pacific region’s multi-level bridge for foreign and mainland Chinese business and investors. As our integration with the mainland continues to deepen, so do the opportunities for Hong Kong.”
Hong Kong is a key part of China’s Belt and Road Initiative (BRI). BRI includes a set of policies that seek to connect China with the rest of the world, with the objectives of improving regional integration, increasing trade and stimulating economic growth. A closer collaboration between Hong Kong and the Middle East will further strengthen Hong Kong’s role in BRI and its position as a global financial centre. The Guangdong-Hong Kong-Macau Greater Bay Area (GBA) is an in-depth cooperation zone that is positioned to be the world’s largest bay area economy. The Hong Kong Private Wealth Management Report released by KPMG in 2022 identified both BRI and GBA as the biggest growth opportunities for the private wealth management industry. As a result, Hong Kong is likely to attract more Family Offices through the wealth of opportunities created under these initiatives, making it a powerhouse of capital in Asia.
Riyadh Al-Zamil, the founder and chairman of Raz Group and a board member of the Riyadh Chamber of Commerce commented, “Family Offices here want to have closer eyes on where opportunities are. We have never found a place better than Hong Kong due to its proximity to mainland China.” AI-Zamil also believes that Hong Kong is better positioned compared to its long-term rival Singapore when it comes to private wealth management, which is the key function of a Family Office.
There are many factors that made Hong Kong a sought-after location for Family Offices. Under the ‘One Country, Two Systems’ rule, Hong Kong retains a common law system while being highly integrated with China. It has a robust regulatory regime and a multilingual talent pool. On top of that, Hong Kong is known for its low tax rate and advanced financial infrastructure. New generations of wealthy families are interested in investment areas such as clean energy transition and artificial intelligence and Hong Kong offers an established ecosystem of services around these opportunities. Amid the rising competition from Singapore, it is believed that Hong Kong remains competitive in the race to the top Family Office hub in Asia.
As China’s international gateway, Hong Kong provides access to and from mainland China in terms of capital, goods, technology and talent. Hong Kong’s unique position has also helped with the facilitation of opportunities around the world. It is believed that any economies or entities that work closely with Hong Kong will be greatly benefited. The future of Hong Kong as a top Family Office hub is promising.