[ESTABLISHING A BUSINESS ENTITY IN HONG KONG]
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Registration
and
Continuing
Tax Benefits LPFs
Obligations The general partner should apply to the Companies Registry for registration of the fund as an LPF. In addition, the general partner must: (a) file annual returns with the Companies Registry; (b) notify the Companies Registry of changes in the registered particulars; (c) maintain proper records of the fund; and (d) ensure that there are proper custody arrangements for the assets of the fund as specified in the limited partnership agreement. The fund must also have a registered office situated in Hong Kong. The information registered with the Companies Registry is publicly available, but the register will not contain information as to the identity or background of the limited partners. Licensing Requirements Where the investment manager or its delegate carries on a business in a regulated activity, such as asset management, as defined in the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), the investment manager or its delegate is required to be licensed or registered by the SFC in respect of such regulated activity.
may from advantageous tax arrangements. For example, they may be exempt from profits tax if they can satisfy certain conditions. Further, while an in-kind capital contribution to the fund, or a distribution to a limited partner, by way of transfer of dutiable assets (e.g., Hong Kong stock and immovable properties) will attract stamp duty, the contribution, transfer, or withdrawal of an interest in an LPF in cash is not subject to stamp duty. Re-domiciliation or Migration benefit A fund set up in the form of an LP, whether under the laws of a jurisdiction outside Hong Kong or in Hong Kong and meeting the eligibility requirements may apply to be registered as an LPF in Hong Kong. 3.5 Open-ended Fund Company (OFC) Hong Kong funds have traditionally been established as unit trusts instead of in corporate form due to the restrictions on capital reduction and distribution out of capital under the Companies Ordinance. An OFC is a relatively new structure introduced in 2018 and refers to an open-ended collective investment scheme structured in corporate form with limited liability and variable share capital. The main purpose of an OFC is to serve as an investment fund vehicle and manage investments for the benefit of its shareholders. The SFC registers and oversees OFCs whereas the Companies Registry is responsible for their incorporation and corporate filings.
ILN Corporate Group – Establishing a Business Entity Series
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