Hong Kong’s family offices are thriving as study shows growing interest, with Dubai royal the newest entrant

The number of family offices in Hong Kong may have exceeded those established in major financial centres in the region, according to a government study, as the city’s efforts in the past year to lure foreign capital started to show results.

The Asian financial hub had 2,703 single-family offices at the end of 2023, according to data published by Deloitte, filtering those managing US$10 million to US$100 million of assets on average. The first-of-its kind research was commissioned by InvestHK, a government promotion agency.

“Hong Kong’s capital markets, its proximity to the mainland China market, the rise of digital technology, and the untapped potential of emerging markets in Asia” are among its key strengths, said Rita Chan, the Hong Kong government and public services industry leader at Deloitte China.

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Sheikh Ali Al Maktoum, the nephew of Dubai’s ruler, is among the latest joiners. His family is setting up an office in Hong Kong with US$500 million of assets, Bloomberg reported on Monday. The firm is interested in ventures including artificial intelligence, fintech and electric vehicles, the report said.

The family office study adopted a proprietary database of ultra-high-net-worth individuals and families, according to Deloitte. Hong Kong had 29,500 millionaires, 290 centi-millionaires and 32 billionaires, according to a report by Henley & Partners, making it one of the world’s top 10 wealthiest cities.

Patrick Yip, vice-chairman at Deloitte China, said the study showed the industry is thriving in Hong Kong due to the ease of setting up such an operation here. He is more than confident that Lee’s 2025 target will be achieved, citing some 30 family offices that his firm has onboarded since Lee unveiled his mission in October 2022.

Further enhancements to the city’s preferential tax regime for single family offices, expanding the scope of qualifying assets to cover investments in artworks and digital assets, and reducing profit tax to 8.25 per cent from 16.5 per cent will boost the city’s appeal, according to Deloitte.

“A competitive tax regime is often a key factor in a family office’s evaluation process to decide where to set up shop,” said Anthony Lau, the private Hong Kong leader at Deloitte.

Hong Kong is committed to building a conducive environment for family offices, Christopher Hui Ching-yu, Secretary for Financial Services and the Treasury Bureau, said in a statement on Monday. Measures in the past year have enhanced the holistic offerings for global wealth owners, he added.