Global

Details

  • Service: Tax, International Corporate Tax, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 3/8/2013

Hong Kong - Exemption for offshore private equity funds 

March 8: Hong Kong’s 2013-14 Budget set in motion two important developments for the funds industry in Hong Kong.
  • For the private equity industry, the government announced its intention to amend and extend the current offshore fund exemption to private equity funds, so that they qualify for the same tax exemption as other offshore funds.
  • For the broader funds sector, the government will also review the legal, tax, and regulatory framework to allow open-ended investment companies to be domiciled in Hong Kong.

KPMG observation

The proposal announced in respect of the offshore fund exemption is an important development for the private equity sector. For years, the Hong Kong environment for private equity funds has been at a competitive disadvantage to other fund centers because there has been no specific exemption that clearly applied to offshore private equity funds operating through Hong Kong.


While Hong Kong has an offshore fund exemption regime, that exemption applies principally to offshore hedge funds—and not to private equity funds. As a result, private equity funds have had to structure their operations outside of Hong Kong so that they would not expose the fund to Hong Kong tax.


Read a March 2013 report [PDF 246 KB] prepared by the KPMG member firm in Hong Kong: Offshore Private Equity Funds to qualify for exemption




©2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.


The KPMG logo and name are trademarks of KPMG International.


KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.


The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.


Direct comments, including requests for subscriptions, to us-kpmgwnt@kpmg.com.
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.

 

Share this

Share this

Subscribe

Subscribe to receive the latest TaxNewsFlash email alerts (you must select the option for TaxNewsFlash)


Already a Subscriber? Login


Not a member? Subscribe now

Contact us