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Hong Kong: Profits tax exemption for private funds

Hong Kong: Profits tax exemption for private funds

Legislation providing a tax incentive for the funds industry would promote asset and wealth management activities in Hong Kong.


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The proposal—the Inland Revenue (Profits Tax Exemption for Funds) (Amendment) Bill 2018—was introduced in December 2018 by the Hong Kong government to provide a new exemption from profits tax for private funds operating in Hong Kong. The legislation would allow two exemptions from Hong Kong’s profits tax:

  • An exemption for funds that meet certain qualifying criteria
  • An exemption for ‘”special purpose entities” established by a qualifying fund

The expanded scope of the new exemption would provide opportunities for funds with operations in Hong Kong allowing them to simplify their current operating protocols and to undertake more investment-related activities in Hong Kong. 

Read a January 2019 report prepared by the KPMG member firm in Hong Kong

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