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.
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.
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; for hands-on setup, see how to set up an SFO in Hong Kong; for mainland tax duties, see the practical filing guide; and see the FAQ.