HK mulls limited partnership regime for private equity funds

Author: Karry Lai | Published: 13 Feb 2019

Hong Kong needs to change its tax and limited partnership laws to make it a more attractive venue for private equity funds, according to sources.

At the moment, both offshore and onshore funds in Hong Kong are exempt from profits tax. But for privately-offered funds, only offshore funds and onshore privately-offered open-ended fund companies are tax-exempt. Other onshore privately-offered funds are not exempt, and have been identified as a ringfencing problem by the EU.

Chris Sun, deputy secretary of Financial Services and the Treasury Bureau, HKSAR government said during a recent conference that the government has tabled a bill on providing tax exemptions for eligible funds operating in Hong Kong.

"The unified tax regime would not differentiate between offshore and onshore funds, and the legal arrangement would be the same," said Sun. "The rationale is to...