Hong Kong tax threat removed for offshore funds

Inland Revenue exempts offshore funds from taxes, bolstering Hong KongÆs claim as AsiaÆs hub for investment management.
Hong KongÆs government has long fancied the territory as AsiaÆs most important centre for asset management. But a longstanding threat of taxing offshore fundsÆ profits made on trading domestic securities has hindered this effort.

This week, that threat was removed when the Inland Revenue Department agreed to exempt offshore funds and the Legislative Council passed the Revenue Profits Tax Exemption for Offshore Funds Bill.

Fund managers and lawyers representing the industry praise this decision and say it removes a key barrier to attracting international investment managers, particularly hedge funds, from setting up shop.

ôProvided certain conditions are met,ö says a report from PricewaterhouseCoopers, ôoffshore funds with Hong Kong fund managers and investment advisors may...
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