Hong Kong may extend tax benefits to offshore private equity funds

Travis Benjamin recently commented on Hong Kong’s potential rollout of tax benefits to offshore private equity funds in Asia Asset Management.

He explained: “The idea is to extend clarity, not just for hedge funds, but also for those funds that invest in unlisted companies in the private equity sector. Our sense is that this is simply the result of making the Hong Kong asset management segment more competitive on the back of already having the existing infrastructure. This means we are better able to utilise it and so get a better return on it.”

Travis further detailed: “All of these proposals are designed to, on the one hand, facilitate the growth of Hong Kong’s asset management business while, on the other hand preventing Hong Kong investors from getting a tax exemption where they would otherwise be taxable via a private equity structure. The aim is to prevent Hongkongers from round-tripping utilising funds out of Hong Kong via an offshore fund and then bringing them back to this jurisdiction, and obtaining the tax exemption.”