HONG KONG – A plan by the Hong Kong government to exempt family business offices from paying profits tax is a significant incentive for such businesses to operate in the special administrative region, says Jessica Cutrera, president of Leo Wealth – a global wealth management company.
Jessica Cutrera, president at Leo Wealth, an international wealth management company. (PROVIDED TO CHINA DAILY)
The company, which has its regional headquarters in the SAR and New York, serves mainly international family businesses, including those with connections in the United States, as well as Asian families with assets in multiple jurisdictions.
“I’m excited to see Hong Kong taking another step forward to support family offices in the city,” Cutrera told China Daily on Monday. “The proposed tax exemption, coupled with the SAR government’s commitment to make the city a family office hub, will attract families in setting up their offices here.”
The Hong Kong government launched a public consultation exercise last month on the planned profits tax exemption for family office businesses. The exemption would apply retrospectively to any financial year ending on or after April 2022. A bill offering tax incentives to family offices will be tabled in the Legislative Council for discussion in the second half of this year.
Family offices, serving ultra-high-net-worth individuals, provide a broad spectrum of private wealth management services, covering budgeting, insurance, charitable donations, wealth transfer and taxes.
“Historically, Hong Kong has been a very attractive place for families,” said Leo Wealth president Jessica Cutrera , pointing to the city’s proximity to the Chinese mainland, its strong financial infrastructure and capital market, high-grade schools and good quality of life
An ultra-high-net-worth individual is defined as someone with a personal net worth of at least $30 million. There were 6,050 such individuals in Hong Kong as of 2021, according to a report by real-estate consultancy Knight Frank in March this year.
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“Historically, Hong Kong has been a very attractive place for families,” said Cutrera, pointing to the city’s proximity to the Chinese mainland, its strong financial infrastructure and capital market, high-grade schools and good quality of life.
She said Hong Kong’s connectivity with the Chinese mainland and the world is one of its biggest strengths. “Hong Kong is uniquely positioned with access to the Chinese mainland, the world’s second-largest economy. We’ve a lot of international families who are positive about the mainland, and Hong Kong is a great gateway city to link up with the rest of the world, as well as the mainland.”
However, Cutrera said the current social and travel restrictions to combat COVID-19 have affected plans by international families to establish family offices in the SAR.
“Attracting and retaining international families is quite a challenging task because they have the resources and the flexibility to go to a lot of different places. The window is quite narrow,” she reckoned.
Cutrera said she’s excited to see the Hong Kong government easing restrictions to revitalize the business community.
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“I’ve been in Hong Kong since late 2007. Both my children were born here and Hong Kong is my home. It’s sad to see the damage the pandemic has inflicted on the local economy. But we’re still here. We’re excited about Hong Kong’s future.”