# Hong Kong Family Office Tax Concession: The 0% Regime

> Hong Kong taxes eligible single family offices at 0% profits tax under Schedule 16E: HK$240m AUM safe harbour, employment thresholds and how the regime works.

URL: https://www.china-family-office.com/en/articles/education-research/hk-family-office-tax-concession/

Published: 2026-09-01 · by China Family Office Research Team

Hong Kong’s family office tax concession is a profits tax exemption under Schedule 16E of the Inland Revenue Ordinance for eligible single family offices: qualifying profits of Family-owned Investment Holding Vehicles (FIHVs) managed by an eligible SFO are taxed at 0%. Passed by LegCo in May 2023 and effective retroactively from the year of assessment beginning 1 April 2022, it is Hong Kong’s core policy tool in competing with Singapore for family office domiciles.

> This article is general information, not tax advice. Eligibility and filing specifics should be confirmed with the Inland Revenue Department (IRD) and professional advisers.

## Who qualifies

The concession applies to FIHVs managed by an eligible single family office. Three prerequisites: the FIHV must be at least 95% beneficially owned by family members; the SFO must be centrally managed and controlled in Hong Kong; and the safe harbour test below must be met.

## The safe harbour test: three numbers

| Test | Threshold | Notes |
| --- | --- | --- |
| Assets under management (AUM) | ≥ HK$240 million | Assessed at year end across the FIHV and its SPVs |
| Full-time employees | 2 (AUM ≤ HK$400m) | Qualifying FTEs performing investment activities in Hong Kong |
| Employee remuneration | ≥ HK$2.8 million per year in total | Aggregate annual pay of those 2 employees |
| Large-scale alternative | AUM > HK$400m: 1 employee, ≥ HK$2.4m | Alternative threshold under Schedule 16E |

## What the concession covers

The exemption covers assessable profits from qualifying transactions of the FIHV and its SPVs — dividends, interest and disposal gains among them. Combined with Hong Kong’s absence of dividend and capital gains tax, a qualifying family investment platform can reach an effective rate of 0%. Note that the beneficiary’s home-jurisdiction tax duties do not disappear: mainland China’s 2026 offshore trust rules impose a 20% rate, so compliance on both sides must be planned together.

## Policy context: why Hong Kong offers 0%

In 2022 the government set a target of attracting no fewer than 200 family offices by the end of 2025 (InvestHK), with the dedicated FamilyOfficeHK team; by end-2025 Hong Kong hosted more than 3,380 single family offices (InvestHK / Deloitte) and manages about US$2.5 trillion of cross-border wealth — overtaking Switzerland as the world’s largest hub in 2026 (BCG). The 0% concession and the CIES threshold cut to HK$30 million form a combined tax-plus-residency package.

## Two-sided compliance with the mainland rules

Hong Kong’s 0% concession addresses the profits tax layer only; the mainland personal income tax duties of family members who are Chinese tax residents follow mainland law — the 2026 offshore trust rules set a uniform 20% rate. In practice, compliance runs in parallel: complete the Schedule 16E safe harbour assessment in Hong Kong and the No. 15 Announcement filings on the mainland. See [the practical filing guide](/articles/education-research/offshore-trust-tax-filing-practical-guide/).

## Key industry data

The eligible SFO safe harbour test requires AUM of at least HK$240 million, assessed at year end.

Schedule 16E requires at least 2 full-time Hong Kong employees with annual remuneration of no less than HK$2.8 million in total.

Hong Kong hosted more than 3,380 single family offices by the end of 2025 (InvestHK / Deloitte).

Hong Kong books about US$2.5 trillion of cross-border wealth, overtaking Switzerland in 2026 (BCG, 2026).

The 2025 Policy Address cut the CIES residential threshold from HK$50 million to HK$30 million.

## FAQ

### Can an MFO enjoy the 0% concession?

Schedule 16E targets family investment holding vehicles managed by single family offices; mixed multi-family structures generally do not qualify, and an MFO should assess its own profits at the standard rate.

### Do you need prior approval from the IRD?

The regime is a self-assessment safe harbour: no pre-approval is needed. The taxpayer applies it in the profits tax return and keeps AUM, employee and expense records for IRD review. Confirm filing specifics with your tax adviser.

## Further reading

For jurisdiction choice, see [Hong Kong vs Singapore](/articles/compare/hong-kong-vs-singapore-family-office-2026/); for hands-on setup, see [how to set up an SFO in Hong Kong](/articles/education-research/how-to-set-up-single-family-office-hong-kong/); for mainland tax duties, see [the practical filing guide](/articles/education-research/offshore-trust-tax-filing-practical-guide/); and see the [FAQ](/faq/).

## References

- [Inland Revenue Department (IRD)](https://www.ird.gov.hk)
- [InvestHK FamilyOfficeHK](https://www.familyofficehk.gov.hk)
- [HK Government News](https://www.info.gov.hk)

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Education & Research · China Family Office (https://www.china-family-office.com/en/)