Hong Kong plans to exempt private equity hedge fund managers from performance fee taxes, industry: will disrupt the industry's rules of the game

The Hong Kong government plans to amend tax policies to exempt private equity and hedge fund managers from taxes on carried interest and performance fees, aiming to attract more asset management talent and enhance Hong Kong's competitiveness as a global financial center. This proposal is expected to be submitted to the Legislative Council in the first half of this year and is planned to be retroactive to 2025. Industry insiders believe that this move will disrupt industry rules and provide greater tax clarity. The current 0% tax rate only applies to private equity and the application process is complex. The proposal also suggests expanding the tax exemption scope to more asset classes