Asset Management

99.    Hong Kong is a major asset management centre and investment platform in the Asia-Pacific region.  The business is burgeoning.  As at the end of 2014, the combined fund management business amounted to $18 trillion, representing a year-on-year growth of 10.5 per cent.  Funds from overseas investors continued to increase and recorded growth of nine per cent in 2014, accounting for over 70 per cent of the fund management business.

100.    In 2014, I proposed to waive the stamp duty for the transfer of all exchange traded funds (ETF) to promote the development of the ETF market in Hong Kong.  The relevant legislation was passed by LegCo and became effective last year.  The average daily turnover of ETFs in 2015 rose to $8.8 billion, an increase of 86 per cent over 2014.

101.    Hong Kong ranked second in Asia in terms of the total capital under management in private equity funds, which amounted to US$120 billion as at September 2015.  We are currently home to 410 private equity firms, of which 350 have their regional headquarters in our city.

102.    To promote further the development of the private equity industry, we have allowed private equity funds to enjoy profits tax exemption available to offshore funds.  The aim is to attract more offshore private equity fund managers to set up business in Hong Kong, which will in turn drive the demand for other related professional services.

103.    To attract more multinational and Mainland enterprises to establish corporate treasury centres in Hong Kong, we have introduced a bill into LegCo to allow, under specified conditions, interest deductions under profits tax for intra-group financing business of corporations and reduce profits tax of qualifying corporate treasury centres by 50 per cent.

104.    We submitted a bill into LegCo in January this year to provide a legal framework for introducing an open-ended fund company structure to further diversify the fund domiciliation platform in Hong Kong.