Hong Kong Limited Partnership Fund Bill
The new Limited Partnership Fund regime will help to develop the growth of private equity and family offices and the development of asset management industry in Hong Kong
On 20 March 2020, The Hong Kong government has gazetted the Limited Partnership Fund Bill. The long-awaited Limited Partnership Fund regime (LPF Regime) designed for private funds is expected to arrive later this year. The bill is now subject to legislature procedures and LPF Regime is expected to come into operation on 31 August 2020.
On Deloitte's perspective, together with the already enacted unified Hong Kong tax exemption regime for funds (which provides Hong Kong tax exemption to all funds provided conditions are satisfied), the new LPF regime will not only attract more private funds and family offices to Hong Kong and accelerate the development of asset management industry, it can also drive up demand for capital, talent and expertise into different sectors including technology and professional services along with the tremendous business opportunities inherent to the Greater Bay Area.
During the recent budget speech, other than Limited Partnership Fund Bill the government also stated that it is also planning to provide tax concessions for carried interest issued by private equity funds operating in Hong Kong, subject to the fulfilment of certain conditions. Deloitte expects that once the tax concession is enacted, it should hopefully help address the concern that the taxation of carried interest in Hong Kong has been a contentious issue for long.
We will share with you more of our insights and perspectives as and when future developments occur. Please contact us for any enquiry.