The form of the fund follows
for investors and assets

01

Not every investment vehicle is a fund

Before choosing a shell, the number and status of investors are determined, fundraising, investment discretion, strategy, liquidity, leverage, term, carried interest and geography of the offer. Single-asset holding, joint venture, managed account, trust, OFC and LPF give different corporate, regulatory and tax results.

02

OFC: fund in corporate form

Open-ended fund company - registered SFC investment fund with limited liability and variable capital. OFC maybe privately or publicly offered, single or umbrella with sub-funds. Public offer requires separate SFC authorization if the exception does not apply.

Registration

One-stop filing via SFC; incorporation performs Companies Registry

Private OFC

SFC usually indicates less than one month after take-up application

Public OFC

Usually 1–3 months depending on complexity

Umbrella

Several sub-funds with statutory segregation liabilities

Core providers

Directors, Type 9 manager, custodian and auditor

For private OFC SFC specifies registration fees HK$5,000 for single fund or HK$10,000 for umbrella plus HK$1,250 for sub-fund; Incorporation and business registration are paid separately. The tariff is always re-checked before submission.

03

LPF: flexible private-fund model

Limited Partnership Fund is not a separate legal entity. It is created by a written limited partnership agreement, has one general partner with unlimited liability and at least one limited partner. Registration is voluntary, but after registration it is valid Limited Partnership Fund Ordinance.

General partner

Management, control and ultimate responsibility; unlimited liability

Limited partner

Limited liability while maintaining passive-investor perimeter

Hong Kong office

Mandatory address for notices and communications

Application

Submitted by Hong Kong law firm or solicitor on behalf of the proposed GP

Official fees

HK$2,555 registration + HK$479 non-refundable lodgement fee

Annual return

Form LPF5 within 42 days of each registration anniversary

A partnership agreement must set out commitments, drawdowns, investment period, key-person events, transfers, advisory committee, waterfall, clawback, valuation, conflicts, removal GP, extensions and dissolution. Register of limited partners and transactions records are maintained, although they do not become a regular public list.

04

Fund vehicle does not replace SFC-licensed manager

A person who exercises discretionary management in Hong Kong a portfolio of securities or futures as a business is usually analyzed on Type 9 regulated activity. OFC must appoint investment manager, licensed or registered for Type 9. For LPF separately GP, investment manager, adviser and delegated functions are checked managers.

05

Single family office - not a separate license

There is no special family-office license in Hong Kong. SFC applies activity-based test: is there regulated activity, is it being carried out? how the business is and whether it is carried out in Hong Kong. Genuine single family office on a cost-recovery basis without a profit objective usually has a different profile than a commercial multi-family office.

Single family

One family group, own capital and agreed ownership chain

Intra-group

Type 9 carve-out requires an exact hit in the related-entity definition

Multi-family

Commercial work for several families increases licensing risk

Shared resources

General investment staff can change the qualifications of the structure

The name “family office” does not solve anything. Analyzed legal ownership, clients, fees, profit objective, investment discretion, staffing and actual activities of each legal entity.

06

FIHV concession: 0% only for qualifying profits

The regime covers eligible family-owned investment holdings vehicles and family-owned SPEs managed by eligible SFO in Hong Kong. The written election applies to subsequent years and is irrevocable. The benefit relates to qualifying and admissible incidental transactions, and not to the entire profit of any family company.

Family ownership

As a rule, at least 95% beneficial interest belongs to members of the same family

Asset threshold

At least HK$240 million specified assets managed by eligible SFO

SFO income

At least 75% assessable profits from services specified family persons

Vehicle cap

No more than 50 FIHVs under one eligible SFO can benefit from the concession

Rate

0% on qualifying assessable profits if all conditions are met

07

Tax concession requires real work in Hong Kong

FIHV must perform core income generating activities in Hong Kong. Minimum - two qualified full-time employees and HK$2 million local operating expenditure; outsourcing to eligible SFO is possible, but the number and expenses must correspond to the scale of the functions.

1. 01

   Investment research and recommendations are documented.

2. 02

   Acquisition, holding and disposal decisions are made provably.

3. 03

   Employees, payroll, office and expenditure are confirmed by primary documents.

4. 04

   Board, SFO and advisers have differentiated powers.

08

Private company investments undergo additional tests

For FIHV and FSPE, Hong Kong immovable property is checked separately, holding period, control and short-term assets. If private company directly or indirectly holds more than 10% of the value of assets in Hong Kong immovable property, the result may not fall under the concession.

Even in the absence of such property, a short period of ownership, control and the share of short-term assets require separate calculations. Failure to pass the test on one investment does not necessarily disqualify benefits are the rest of qualifying transactions, but creates a taxable bucket.

09

Fund banking is several linked accounts

Operating, subscription, distribution, custody, brokerage, management-fee and SPV accounts are designed together. Bank and custodian check investors, GP, manager, directors, source of wealth/funds, strategy, offering documents, target assets, sanctions exposure and expected payment corridors.

OFC

Instrument of incorporation, SFC registration, manager and custodian files

LPF

Partnership agreement, GP, investment manager, responsible person and partner CDD

Family office

Family tree, wealth history, FIHV/FSPE map and investment mandate

Operations

Capital calls, subscriptions, distributions, fees and deal evidence

10

Procedure for launching a foundation or family office

1. 01
   Family / investor perimeter

   Ownership, beneficiaries, investors, assets and jurisdictions.

2. 02
   Regulatory memorandum

   Fund definition, offering, Type 9, custody and exemptions.

3. 03
   Vehicle documents

   OFC instrument or LPF agreement, governance and service contracts.

4. 04
   Tax design

   Unified fund exemption or FIHV election, substance and private-asset tests.

5. 05
   Operational launch

   Bank, custodian, administrator, audit, AML/CFT and reporting calendar.