What Changed
- Tax exemption bill introduced in June 2026 expands qualifying investments for funds and single family offices to private credit, digital assets, and commodities, with second reading planned by end of 2026.
- Legislation planned for late 2026 and H1 2027 to enable REIT privatisation/restructuring and provide stamp-duty waivers for property transfers into listing REITs.
- The Limited Partnership Fund (LPF) regime reached nearly 2,100 registered funds by late September 2026.
Alternative investment managers, private equity (PE) funds, single family offices, real estate investment trust (REIT) managers, and financial and professional service providers operating in or looking to expand into Hong Kong SAR are affected by proposed legislative changes and regulatory updates outlined by Acting Secretary for Financial Services and the Treasury, Mr Joseph Chan, at the AIMA APAC Annual Forum 2026.
Key Legislative and Regulatory Developments:
First, a bill introduced into the Legislative Council (LegCo) in June 2026 enhances preferential tax regimes for funds, single family offices, and carried interest. The bill expands tax-exempt eligible funds to include pension funds, endowment funds, and specific funds-of-one, while broadening qualifying investments to cover loans, private credit, digital assets, precious metals, specified commodities, insurance-linked securities, and emission derivatives and allowances. The LegCo Bills Committee has completed clause-by-clause examination, with the government targeting to resume the second reading debate by the end of 2026. Subject to passage, these tax concessions will take effect starting from the 2025/26 year of assessment.
Second, the government announced upcoming legislative measures to support the REIT market. A bill enabling the privatisation or restructuring of REITs will be introduced this year, followed by a bill in the first half of 2027 providing a stamp-duty waiver for transfers of non-residential properties into REITs seeking a listing. Concurrently, the Securities and Futures Commission (SFC) plans to revise relevant codes next month to promote fund product innovation and streamline procedures for overseas REITs seeking dual listing.
Third, the speech highlighted structural market growth under existing frameworks. Hong Kong's Limited Partnership Fund (LPF) regime, launched in August 2020, reached almost 2,100 registered funds by the end of September 2026. This follows earlier SFC and Mandatory Provident Fund Schemes Authority (MPFA) clarifications in 2025 regarding regulatory authorization requirements and MPF investment eligibility for approved listed private equity funds.
Relevant Dates and Source Information:
The speech was delivered on October 29, 2026, and published via the Hong Kong SAR Government press release portal. Specific entry-into-force dates for new legislation depend on LegCo passage, with tax measures intended to apply to the 2025/26 assessment year.
Who May Be Affected
Alternative investment managers, private equity funds, single family offices, REIT issuers, and professional service providers operating in or connected to Hong Kong SAR.
Cross-Border Context
Hong Kong SAR acts as a cross-border wealth management and fund hub connecting Mainland China and international financial markets through schemes such as Stock Connect, Bond Connect, Wealth Management Connect, and Mutual Recognition of Funds.
What to check next
- Resumption of the second reading debate on the tax enhancement bill in the Legislative Council by end of 2026.
- Publication of revised SFC codes expected in November 2026 regarding fund product innovation.
This article provides general information and does not constitute legal advice. Consult the official text and obtain advice appropriate to your circumstances where needed.