Hong Kong offshore fund tax threat continues

The government''s latest proposal fails to provide comfort or clarity for hedge fund managers.

Leading market participants believe Hong Kong's status as a regional fund management centre remains in question, following a new twist in the ongoing saga over the tax exempt status of offshore funds. This issue is of particular interest to hedge funds, which may face taxes for doing business in Hong Kong.

The threat of taxation has been one factor driving many hedge fund start-ups to go to Singapore instead. On December 31, 2004 the Financial Services and Treasury Bureau FSTB issued its long-awaited second consultation paper on this topic.

This came in response to the comments it received on its first consultation paper issued January 14, 2004...

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