Key facts
- Hong Kong plans to exempt performance fees and carried interest from taxes for alternative investment funds.
- The proposed legislative amendment aims to bolster the city's appeal as an asset-management hub.
- The bill, gazetted in June, would extend tax concessions to hedge funds, private credit funds, and digital-asset funds.
- Performance fees earned at the fund level would be exempt from profits tax.
- Fund managers would be exempt from salaries tax on carried interest and performance fees.
Hong Kong is proposing to exempt performance fees and carried interest from taxes for alternative investment funds as part of a legislative amendment designed to enhance its standing as a global asset-management hub.
The bill, which was gazetted by the government in June, seeks to extend existing tax concessions to a broader range of funds, including hedge funds, private credit funds, and digital-asset funds.
Under the proposed changes, performance fees generated at the fund level would be exempt from profits tax. Additionally, fund managers would receive an exemption from salaries tax on carried interest and performance fees they earn.