HONG KONG SAR, CHINA Law and Practice Contributed by: Alfred Ip, Hugill & Ip
1.6 Stability of Tax Laws The stability and predictability of Hong Kong’s tax regime is one of its most compelling attributes for long-term wealth planning. The Basic Law of the Hong Kong Special Administrative Region guarantees the continuation of Hong Kong’s existing capitalist sys - tem and way of life for 50 years from 1997, and spe - cifically preserves the independent taxation system. This constitutional guarantee underpins investor con - fidence and provides a secure foundation for multi- generational planning. Notwithstanding this stability, Hong Kong has been responsive to international developments. The FSIE regime reforms reflect the jurisdiction’s commitment to meeting OECD/G20 Base Erosion and Profit Shift - ing (BEPS) standards and avoiding placement on the EU’s list of non-cooperative jurisdictions. The govern - ment has consistently demonstrated that it will adapt its tax framework to maintain international compliance whilst preserving the low-tax, business-friendly envi - ronment that defines Hong Kong. The recent expansion of the family office tax conces - sion regime to include digital assets, gold, and funds- of-one in 2026 is illustrative of Hong Kong’s proactive approach to attracting wealth. Rather than imposing new taxes, the government continues to refine and expand incentive regimes to compete with Singapore and other regional wealth management centres. For a comprehensive overview of the family office regime, see Setting Up Family Offices in Hong Kong: Advan - tages and Tax Benefits. 1.7 Transparency and Increased Global Reporting Hong Kong is a committed participant in the global tax transparency framework. It has implemented the OECD’s Common Reporting Standard (CRS) for the automatic exchange of financial account informa - tion with exchanges taking place annually with over 100 partner jurisdictions. Financial institutions in Hong Kong are required to conduct due diligence on account holders and report information on accounts held by foreign tax residents to the Inland Revenue Department, which then transmits the information to the relevant foreign tax authorities. Hong Kong has also entered into an intergovernmental agreement with
the United States to implement the Foreign Account Tax Compliance Act (FATCA). In terms of beneficial ownership transparency, Hong Kong requires all companies incorporated in Hong Kong to maintain a Significant Controllers Register (SCR), identifying individuals who ultimately own or control more than 25% of the shares or voting rights, or who otherwise exercise significant control. The SCR must be kept at the company’s registered where it can be accessed by law enforcement and regulatory authorities upon demand, although it is not publicly accessible. This approach balances the legitimate global push for transparency with the privacy expec - tations of legitimate wealth structures. For trust structures, there is no public register of trusts in Hong Kong. However, financial institutions are required under the CRS and anti-money laundering regulations to identify the beneficial owners of trusts, including settlors, trustees, protectors, and benefi - ciaries. Clients must therefore assume that their trust structures will be visible to their home tax authorities through the CRS reporting chain, making it essential that all structures are commercially justified, properly documented, and tax-compliant in all relevant juris - dictions. 2. Succession 2.1 Cultural Considerations in Succession Planning In Hong Kong, succession planning is profoundly shaped by traditional Chinese cultural values, which place a premium on family cohesion, filial piety and the preservation of accumulated wealth across gen - erations. The concept of “family wealth” is deeply ingrained, and there is a strong cultural expectation that assets, particularly the family home and the family business, will remain within the family bloodline. His - torically, this manifested in a preference for passing control to the eldest son, a practice that can create significant tensions in modern, blended, or interna - tionally mobile families. A recurring challenge in practice is the reluctance of the founding generation to engage in formal succes -
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