News

Hong Kong funds lobby for tax changes

Hong-KongFund managers in Hong Kong are calling on the authorities to introduce new tax exemptions in order to make the island more competitive amid a renewed regional rivalry. The call comes ahead of the budget which will be unveiled on Wednesday by financial secretary Paul Chan. It also comes at a time when Hong Kong is trying to reclaim lost ground as a result of its strict lockdown measures imposed during the pandemic. Of particular concern to fund managers is the application of the unified fund exemption regime (UFE), which was introduced in 2019 as a way to relieve private equity funds of taxes made on its profits. However, according to Darren Bowden, head of alternative assets at KPMG, the rules around the UFE are not as clear as in Singapore. Consequently, Hong Kong risks losing valuable business to Singapore if it does not make “fundamental changes” to the tax regime. In an action plan published by Bowden on behalf of the Alternative Investment Management Association (AIMA), he proposes five changes which include reform of the UFE regime and an assurance that private credit and debt funds are included within it, a less complex licensing process, and the addition of a carried tax concession for funds. ©2024 funds global asia

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