Hong Kong plans to offer cryptocurrency tax breaks to hedge funds and the super-rich

On November 28, it was reported that Hong Kong, China plans to exempt private equity funds, hedge funds, and investment vehicles of the super-rich from paying taxes on cryptocurrencies, private credit investments, and other asset gains.
In a 20-page proposal this week, the Hong Kong government said tax was "one of the main considerations" for asset managers when deciding where to do business and that it wanted to create a "favourable environment" for them.
Under the proposal, the Hong Kong government wants to expand tax-free investments to include private credit, overseas real estate and carbon emission quotas. The government is negotiating the plan for six weeks.
The proposal comes as two regional rivals, Hong Kong and Singapore, are trying to boost their status as top offshore financial centres as they have struggled to attract billionaires and investors and created new low-tax fund structures that allow them to hold large amounts of money.
Patrick Yip, Deloitte China vice-chairperson and international tax partner, who specialises in family offices, said Hong Kong's new tax exemption proposal, if implemented, would provide "certainty" for family offices and investors.
"This is an important step in enhancing Hong Kong's position as a financial and cryptocurrency trading hub," said Patrick Yip, adding that it was "not trivial" that some family offices in Hong Kong were allocating up to about 20 per cent of their portfolios to digital assets. (FT)