Proposal aims to attract investment talent by waiving taxes on performance bonuses, aligning with global financial hubs like Dubai and Singapore.
Hong Kong is considering eliminating taxes on carried interest, the share of profits fund managers earn from successful investments. The move targets performance-linked bonuses, currently taxed at up to 17%, to lure top investment professionals amid regional competition. Senior managers in Asia reportedly received over $1m in such bonuses last year, with some exceeding $50m.
The proposal would make Hong Kong the first major Asian financial center to offer tax relief on carried interest. Draft legislation may be submitted as early as next month, with potential backdating to April 2025. Industry experts suggest the change would enhance Hong Kong’s appeal compared to Singapore and Dubai, where tax policies are more favorable.
Market participants have expressed enthusiasm, with firms advising clients on preparation. The policy shift could bolster Hong Kong’s position as a leading asset management hub in Asia.