Hong Kong’s asset management industry will be given a significant boost after legislation exempting offshore funds from profits tax is to be...

Hong Kong’s asset management industry will be given a significant boost after legislation exempting offshore funds from profits tax is to be approved by the jurisdiction’s government during the first quarter of the year. The tax break is likely to give Hong Kong the edge over competing financial centres in Europe, Asia and North America. The city’s Secretary for Financial Services and the Treasury, Frederick Ma, told reporters at a recent conference that the elimination of the 17.5 per cent tax on funds' profits will be a "big attraction" for foreign investors, who presently manage 60 per cent of funds in Hong Kong and could help deepen the liquidity of the city's stock market. The proposal to exempt offshore funds from profits tax is designed to reinforce the status of Hong Kong as an international financial centre, and was first proposed in the 2003/2004 Budget. The move will bring the territory into line with other major financial centres across the globe. Major financial centres such as New York, London and Singapore all exempt offshore funds from tax.