17 June 2026
COPFA welcomes significant enhancements to tax regimes in HK to strengthen the fund industry.
Hong Kong is on the cusp of long-awaited tax reforms that further reinforces its leading position as a global hub for alternative investments and wealth management.
On June 12, 2026, the Hong Kong Government officially gazetted the Inland Revenue (Amendment) (Tax Concessions for Funds, Family-Owned Investment Holding Vehicles and Carried Interest) Bill 2026 and initiated the Legislative Council review process. The Bill proposes comprehensive enhancements to the Unified Fund Exemption (UFE) regime and the tax concessions for carried interest. As an industry-driven association representing the voices of the Chinese overseas private fund industry, COPFA welcomes this significant development which underscores Hong Kong’s competitiveness as an international financial center. We believe this significant enhancement is a very strong growth driver particularly for Chinese overseas private fund managers who are actively expanding overseas.
The amendments broaden the scope of the Unified Fund exemption regime, effectively covering almost all mainstream asset management strategies. Private credit, virtual assets, and real estate funds will now be formally included within the tax exemption framework. At the same time, substantial tax concessions for carried interest and performance fees will benefit not only fund management companies but also investment professionals. These measures will effectively reduce operating costs and form a strong edge to attract and retain top talents globally.
COPFA believes these enhancements are significant in reinforcing Hong Kong’s position as a leading global asset management hub. A more inclusive and competitive tax ecosystem will provide strong confidence for investment managers to establish and expand their long-term presence in Hong Kong. Looking ahead, COPFA will continue to support our members and community to understand how the reforms may impact them and embrace the opportunities ahead. We also suggest the industry to be compliant and ideally adopt industry best practices while achieving sustainable growth given the enhancements.
Howard Ching, cochair of COPFA, commented: “The proposed enhancements have been generating a lot of traction in the industry when the consultation paper was initially published in November 2024, we are particularly delighted to see that these enhancements have closely aligned the development trends and addressed demands of private fund industry in Hong Kong. The retrospective application to the 2025/26 tax year further demonstrates the Government’s strong commitment to supporting the industry. This reform is undoubtedly very favorable. We will continue to support our members in capturing the business opportunities and achieving high standards in tax compliance and governance as a result of the changes”
Carl Miao, cochair of COPFA’s Policy Group stated: “A more competitive tax environment is the cornerstone of the thriving alternative investment industry. The extension of tax exemptions to additional asset classes such as private credit and virtual assets, together with strong incentives for carried interest, not only responds to the market’s urgent demand for broader asset allocation but will also significantly enhance Hong Kong’s ability to attract global and Chinese fund managers, talent, and capital. We are highly confident in the future of Hong Kong’s asset management industry.”
Gaven Cheong from COPFA’s Policy Group added: “This is a genuine gamechanger and a first for any major financial centre in the region. By extending tax exemption treatment to hedge fund manager performance fees as part of the carried interest enhancements, while also broadening the scope of qualifying funds and investments and removing long-standing restrictions, Hong Kong has delivered a tax framework that places it significantly ahead of other regional asset management hubs. These measures apply retrospectively from the 2025/26 year of assessment. Realising these benefits will require careful structuring and compliance with the relevant conditions. We look forward to seeing how the market responds as the Bill progresses through the legislative Council in the coming weeks and the positive impact these developments will have on Hong Kong’s position as Asia’s leading asset and wealth management hub.
