Hong Kong's Financial Secretary said on 5 November 2026 that the government aims to pass a bill widening tax concessions for funds, family offices and carried interest by the end of this year, but the bill is not yet law.

TL;DR

  • The Inland Revenue (Amendment) (Preferential Tax Regimes for Funds, Family-owned Investment Holding Vehicles and Carried Interest) Bill 2026 was gazetted on 12 June 2026 and introduced to the Legislative Council on 26 June 2026, per Baker McKenzie.
  • If enacted, it would apply from 1 April 2025 and widen the funds eligible for the exemption, the asset classes covered and the carried interest rules.
  • Fund managers and allocators should watch the legislative timetable and Inland Revenue Department guidance, which law firms say has not yet been issued.

What did Hong Kong's Financial Secretary say on 5 November?

Paul Chan Mo-po, Hong Kong's Financial Secretary, spoke at the Private Wealth Management Association summit. In the government's text, as carried by Bastille Post, he said the government has introduced a bill to enhance preferential tax regimes for funds, single family offices and carried interest, "which we aim to pass by the end of this year". The same speech cited about 4,300 applications under the Capital Investment Entrant Scheme, representing an expected HK$150 billion of investment, and said industry assets under management grew 20% to over HK$42 trillion, according to a July Securities and Futures Commission survey.

How would the bill change the tax treatment of funds?

According to Baker McKenzie and DLA Piper, the bill would widen the funds that can use Hong Kong's unified fund exemption to include pension funds, endowment funds, funds whose sole investor is a government entity, central bank or international organisation, and funds-of-one with at least HK$240 million in qualifying investments where the investor has no day-to-day control. It would remove the 5% cap on incidental transaction profits and add qualifying assets such as loans, equity in non-corporate private entities, overseas immovable property, insurance-linked securities, digital assets and carbon credits. Precious metals would be capped at 20% of the portfolio. Funds would need at least two full-time qualified employees in Hong Kong and at least HK$2 million of annual operating expenditure there.

What changes for carried interest?

Both firms say the bill would remove the Hong Kong Monetary Authority certification requirement and the hurdle rate reference, extend the regime beyond private equity, and allow unlicensed managers of excepted funds to be qualifying persons. Carry could be paid directly by the fund or through an employee-owned vehicle.

Why does it matter for APAC allocators and fund managers?

For regional investors, the main question is which structures and strategies could qualify. The inclusion of loans is relevant to private credit, a theme in our coverage of Preqin's forecast of private credit assets above US$5 trillion by 2031 (https://altassetasia.com/preqin-forecasts-private-credit-aum-above-us-5-trillion-by-2031-what-apac-allocators-should-ask/). The digital asset category connects to our report on Hong Kong's 24/7 trading of tokenised money market funds (https://altassetasia.com/hong-kong-opens-24-7-trading-of-chinaamc-tokenised-money-market-funds-what-apac-allocators-should-ask-about-liquidity/). For the family office side of the same bill, see our sister site Asia Family Office Hub (https://asiafamilyofficehub.com/hong-kong-targets-220-more-family-offices-by-2028-as-it-widens-tax-concessions-to-new-asset-classes/). This is general information, not tax or investment advice.

What is not confirmed?

The bill is not law and could change before enactment. The Inland Revenue Department has yet to publish reporting details, according to Baker McKenzie. Taxpayers who expect to qualify for 2025/26 may need to revise returns after enactment. The law firm summaries are not a substitute for the bill text.

Frequently Asked Questions

Is Hong Kong's fund and carried interest tax bill law yet?

No. It was gazetted on 12 June 2026 and introduced to the Legislative Council on 26 June 2026. The Financial Secretary said on 5 November that the government aims to pass it by the end of 2026.

What minimum applies to a fund-of-one under the bill?

Baker McKenzie and DLA Piper report a threshold of at least HK$240 million in qualifying investments, with no day-to-day control by the investor.

Would the changes apply to past years?

If enacted, the changes would apply retrospectively from 1 April 2025, covering the 2025/26 year of assessment, according to both law firms.

Sources and Method

HKSAR Government speech by the Financial Secretary, 5 November 2026, as carried by Bastille Post (https://www.bastillepost.com/global/article/6327838-financial-secretary-highlights-hong-kongs-wealth-management-growth-at-pwma-summit-2026). The Standard, Zhou Yiru, November 2026 (https://www.thestandard.com.hk/finance/article/347634/HK-a-clear-beneficiary-of-global-capital-diversification-amid-higher-rates-Paul-Chan). Baker McKenzie, 30 July 2026 (https://www.bakermckenzie.com/en/insight/publications/2026/07/hk-enhanced-tax-concession-regimes-funds-family-offices-carried-interest). DLA Piper, 28 July 2026 (https://www.dlapiper.com/en/insights/publications/2026/07/enhanced-preferential-tax-concession-regimes-for-funds). The government release itself was not opened directly. Written as an original Dachex summary.