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Hong Kong’s 0 Percent Tax Concession for Carried Interest: Getting Funds Certified With the HKMA  


Author:  Michael P. Wong.; Mack Wan.; Gilbert Cheng.; Amanda Liu .


Source: Volume 39, Number 01, Fall 2021 , pp.9-12(4)




Journal of Taxation of Investments

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Abstract: 

In an effort to compete with other low-tax jurisdictions, the latest amendments to the tax laws in Hong Kong have effectively reduced the profits tax rate to 0 percent for eligible carried interest arising from eligible private investment funds that are managed locally. As the first step, funds need to be certified by the Hong Kong Monetary Authority (HKMA) to determine whether investment and substance requirements have been satisfied. The HKMA has now issued its own guidelines on what is expected in this certification process and the relevant operational procedures involved.

Keywords: Hong Kong Monetary Authority (HKMA); private equity funds; tax concession; carried interest

Affiliations:  1: Dechert LLP; 2: Dechert LLP; 3: Dechert LLP; 4: Dechert LLP.

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