Proposals to attract more fund managers to Hong Kong are likely to have a limited impact without a “passport” to allow funds to be sold offshore or at least mainland China, according to executives in the industry.
Fund management executives and industry experts in the city said there were limited reasons to make Hong Kong the domicile for a fund unless it were meant to be sold into the local mandatory pension scheme. They also doubt that many jobs would be created even if more funds used Hong Kong as their legal domicile.
John Tsang, Hong Kong’s financial secretary, in February launched reform proposals that would reduce taxes on private equity funds and open-ended investment companies. The government says only 300 of 1,800 funds sold in Hong Kong are domiciled there and that just one-quarter of staff work in frontline money management or research.