Rising Demand for Family Offices in Hong Kong
The growing interest among wealthy individuals from mainland China in establishing family offices in Hong Kong is gaining momentum. This trend is driven by the increasing number of initial public offerings (IPOs) and the favorable business environment in the city, according to industry experts.
Wang Fengyu, founder and chairman of Oakwise Capital, a Hong Kong-based firm managing up to US$2 billion in wealth, has observed a surge in inquiries from clients interested in setting up family offices. “This week alone, I have met two clients inquiring about family office services, and tonight I am meeting another—lots of overtime,” he shared in an interview. The firm, established in 2021, serves 10 clients with a total of US$1.5 billion to US$2 billion under management. Approximately 70% of these clients are shareholders of Hong Kong-listed companies with market capitalizations ranging from HK$5 billion to HK$50 billion.
The rise in demand is expected to continue as more mainland Chinese companies prepare for share sales. Hong Kong’s stock exchange has seen 50 listings as of July 16, raising a total of US$15.8 billion. Of these, 44 firms originated from the mainland, contributing significantly to the funds raised. Notable deals include Contemporary Amperex Technology (CATL), which raised US$5.2 billion, and Jiangsu Hengrui Pharmaceuticals, which secured US$1.26 billion. These companies have seen their market capitalizations soar, with CATL reaching US$165.6 billion and Hengrui Pharmaceuticals at US$53.6 billion.
Business owners, especially those making their first overseas listing, often accumulate substantial overseas assets. This leads to a need for diversified wealth allocation, prompting the establishment of family offices. Wang highlighted that Hong Kong’s geographic proximity, transparent regulations, competitive tax system, and sophisticated professional services make it an attractive destination for wealthy individuals looking to preserve and grow their wealth.
Hong Kong’s government policies also play a crucial role in this trend. The revamped Capital Investment Entrant Scheme allows high-net-worth individuals who invest HK$30 million in stocks, bonds, insurance, and property to apply for residency. This initiative has attracted 1,400 applications and is expected to draw over US$5.2 billion in investments. Additionally, the government has proposed expanding tax concessions to include digital assets as qualifying assets for family-owned vehicles.
Helen Chen, chief strategy officer of FGA Trust, noted that many mainland entrepreneurs, particularly in the apparel and consumer goods sectors, are setting up family offices in Hong Kong. They leverage the city’s capital markets to expand their global businesses and access investment opportunities. Anthony Lau, Hong Kong tax and business advisory leader at Deloitte China, emphasized that family offices bring benefits not only to the individuals but also to the broader economy. These include job creation, an enlarged talent pool, and positive impacts on housing and education.
As of June, around 2,700 family offices had been established in Hong Kong, with expectations that this number will surpass 3,000 in the near future. The continued growth of family offices in Hong Kong reflects the city’s appeal as a financial hub and its ability to meet the evolving needs of affluent individuals.
