KPMG: Hong Kong fund taxation system to undergo major reforms, attracting global asset management firms to set up operations there

Deep Tide TechFlow message. On July 22, KPMG today released its latest report, “Hong Kong Asset Management and Private Equity Outlook,” noting that reforms to Hong Kong’s fund tax exemption system and the accompanying carried interest tax relief framework are expected to attract a new round of regional and global asset management firms to set up in Hong Kong. Under the new regime, eligible carried interest and performance fees can enjoy an effective actual tax rate of 0%, whether at the corporate level or for individual employees based in Hong Kong.

Data shows that in 2025, Hong Kong’s assets under management (AUM) are expected to grow year over year by 20% to a historical high. Net fund inflows within the year are set to surge 193% year over year, about triple that of the previous year. KPMG forecasts that Hong Kong’s IPO fund-raising for the full year could reach about HK$350 billion. As investor demand expands to products such as virtual assets and tactical trading, the ETF market will continue to grow.