Wealth management and family offices will be a major growth engine for Hong Kong, as many prominent clans in Asia have shown an interest in setting up entities to manage their fortunes, according to Deloitte's regional head.
Dennis Chow Chi-in, Asia-Pacific chairman of the accounting and consulting firm, believes this will mainly be down to the appeal of the city's capital market, as more companies from mainland China and the region list here and look to raise funds via other avenues.
"We definitely have come across increased inquiries from wealthy families that have demonstrated an interest in setting up family offices in Hong Kong," Chow said in an exclusive interview with the Post. "Hong Kong is particularly appealing to wealthy families from mainland China and Southeast Asia."
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Since May 2023, the Hong Kong government has introduced a series of measures, including tax concessions for single family offices to set up operations in the city. These tax incentives could be expanded to cover more investment products following consultations with the industry.
Hong Kong has introduced many measures to attract family offices to set up operations in the city. Photo: Elson Li alt=Hong Kong has introduced many measures to attract family offices to set up operations in the city. Photo: Elson Li>
Last March, the government introduced the Capital Investment Entrant Scheme (CIES), commonly known as the investment-migration scheme, for wealthy individuals and their families to get fast-track residency by investing HK$30 million (US$3.8 million) in stocks, bonds, insurance and property in the city.
"The tax concession and the immigration policy are like a boxing combo to attract both investments and [family offices] to Hong Kong," Chow said. "These play a vital role in enhancing Hong Kong's attractiveness as a hub for wealth management and capital in the family-office space."
He said that many of the people he had spoken with believe Hong Kong had a more flexible regime than Singapore in terms of tax concessions for family offices, while the investment-migration scheme had a lower threshold than Singapore.
Singapore's Global Investor Programme requires applicants to invest at least an amount equivalent to HK$58 million, while Hong Kong's CIES requires HK$30 million.
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Besides family offices, Chow said Hong Kong's initial public offering (IPO) market showed signs of recovery last year after a downturn in previous years.
Looking ahead, he said Hong Kong's capital market would benefit from the listing of big mainland Chinese industry players.
"Some leading A-share companies have considered issuing H shares in Hong Kong to raise funds for their expansion and to enhance their international investor base," Chow said. "Among the top 500 largest A-share companies listed in Shanghai or Shenzhen, only one-third of them are listed in Hong Kong, which means there is a lot of potential for good listing candidates from the mainland."
China's biggest condiment maker Foshan Haitian Flavouring and Food submitted an application on January 13 to list in Hong Kong. Brokers estimate it may raise US$1.5 billion.
Contemporary Amperex Technology, or CATL, as the world's largest producer of batteries for electric vehicles is known, could raise US$5 billion in one of Hong Kong's largest listings in recent years, according to media reports.
Proceeds from IPOs in Hong Kong surged 87 per cent last year from the previous year, boosted by Midea Group's HK$35.6 billion deal in September, the world's second largest IPO in 2024. This propelled Hong Kong to fifth on the global IPO league table last year from eighth in 2023.
Still, Hong Kong lost out to India's two main exchanges and US bourses Nasdaq and New York Stock Exchange, which topped the charts, according to data from London Stock Exchange Group.
India has a fast-growing economy propelled by many sectors including technology, which explains why it topped the IPO table, Chow said, adding that Hong Kong's IPO market was affected by low valuations.
Hong Kong stock market traded at 12 times the price-earning ratio last year, compared with 18 times in 2021 and lower than many overseas markets. The US stock market's valuation currently stands at 27.61 times, India at 24 and Australia at 20.
"The low valuation has made it harder to attract overseas companies to list here now," Chow said.
However, market sentiment is expected to improve as the lower interest rate cycle has started and China is likely to introduce more stimulus measures, which could entice some companies from Southeast Asia or India to consider listing here to tap funds from international investors, he added.
On Thursday, China's financial regulators said starting this year, 30 per cent of the annual insurance premium from new policies will be put into yuan-denominated shares. As part of this move, at least 100 billion yuan (US$13.8 billion) of insurance funds will be set aside for the stock market in a pilot programme within the first six months.
Hong Kong is likely to see around 80 IPOs that could raise about HK$150 billion in 2025, with technology, life science, healthcare and consumer firms to be the main drivers, Chow said.
"Hong Kong should be potentially back in the top three IPO markets this year."
On Deloitte's performance, Chow said the consultancy's revenue has grown strongly in recent years on the back of strong economic growth in the Asia-Pacific region.
He said India was one of the company's fastest-growing markets because of a rapidly expanding economy, digital transformation and a thriving business ecosystem.
"We also see strong growth in mature markets, such as Japan, with increasing demand for professional services across key business agendas such as digital transformation, artificial intelligence, cybersecurity and sustainability."
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2025 South China Morning Post Publishers Ltd. All rights reserved.
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