Cover Hong Kong’s sharp focus on family offices is elevating the city’s position on the world stage (Photo: courtesy of Invest HK)
Hong Kong’s sharp focus on family offices is elevating the city’s position on the world stage (Photo: courtesy of Invest HK)
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Spurred by Asia’s flood of wealth and supported by government policies, Hong Kong is positioning itself as a destination of choice for global family offices
Despite tough economic times globally, there’s no shortage of wealth in Asia. Boston Consulting Group estimates the region had just over US$55 trillion in financial assets at the end of 2022.
That figure is set to grow. A recent Knight Frank survey forecasts that Asia will become the world’s largest centre for wealth by 2026, with growth in the number of high-net-worth individuals (HNWIs) and ultra-high-net-worth individuals (UHNWIs) by about 60 per cent and 32 per cent respectively.
At the same time, the needs of these wealthy families and their businesses are changing. Dorsett Hospitality International, the hotel group and three-generation-old Hong Kong family enterprise, is a case in point. Riding out the dramatic impact of the pandemic on the real estate and hospitality sectors required flexibility to pivot to alternative sources of income, says Winnie Chiu, president and executive director. That initially included being the first hotels to open up for quarantine returnees, followed more recently by the group responding to generational changes in demands on the business, including sustainability and the digital revolution.
In June 2023, the Group launched its first ever “Positive Impacts Week” to celebrate World Environment Day. All 30 hotels participated in actively educating its teams about sustainability and nature. Partnering with the Vocational Training Council’s THEi Chinese Pharmacy department in Hong Kong, Dorsett Hospitality also supports the research and preservation of Chinese cultural heritage and the protection of local biodiversity.
Beyond managing evolving business needs, with assets and children often now located in multiple countries, there is added complexity for wealthy families as they seek a suitable succession strategy.
In response, family offices have become an increasingly popular option, as a vehicle that offers the structure and governance framework to help manage such challenges. Seeing this trend emerge, Hong Kong is vying to be a hub for both Asian and global family offices.
Above The launch of the Hong Kong Academy for Wealth Legacy (Photo: courtesy of Invest HK)
The launch of the Hong Kong Academy for Wealth Legacy (Photo: courtesy of Invest HK)
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A new milestone for family office development
Backed by government-led incentives and infrastructure, the goal is to attract at least 200 family offices to set up or expand operations in Hong Kong by the end of 2025. The package of measures include tax concessions, added to already robust local financial and regulatory frameworks, along with preferential access to mainland China.
A key pillar to support the aspirations of family offices is talent, especially across finance, tax and compliance roles. The Hong Kong government recognises the importance of deepening and broadening these pools locally, and recently established the Hong Kong Academy for Wealth Legacy, issuing the Policy Statement on Developing Family Office Businesses in Hong Kong on March 24, 2023. Setting the government's stance and measures on developing a vibrant ecosystem for global family offices and asset owners, the project aims to enhance Hong Kong’s status as a leading hub for managing inherited family wealth.
One of the key measures outlined is The Hong Kong Academy for Wealth Legacy. Launched in November, 2023 it is set to provide guidance to the upcoming generation of inheritors and professionals in private wealth management.
In terms of education, in addition to offering training on key succession planning subjects such as capital preservation and inheritance, the academy will also focus on arts and culture, sustainable investments and philanthropy. The ultimate objective is to ensure Hong Kong is aligned with the aspirations of global wealth owners. Furthermore, the academy will develop partnerships with peer organisations in other locations, building a network that can help it realise synergies and maintain best practices.
Setting the gold standard
Hong Kong’s ever-sharper focus on family offices is a bold ambition but a realistic one, given that it is fuelled by a strong government commitment to implementing the policies and processes needed to turn the city into the world’s premier destination for family offices. It will certainly contribute to raising the bar, elevating the city’s family office industry on the world stage.
