Consultation has just closed on proposals to improve Hong Kong"s preferential tax regimes for privately offered funds, family-owned investment holding vehicles and carried interest.

The measures are intended to attract more funds and family offices to the jurisdiction by expanding and clarifying the scope of some key tax concessionary regimes.

One of these is the unified fund exemption (UFE), which provides tax exemption for profits earned on certain transactions by privately offered funds and special purpose entities (SPEs) owned by tax-exempted funds. The new proposals extend this relief to cover pension funds and endowment funds, as well as many other improvements such as expanding the scope of qualifying investments; introducing a less stringent definition of "private company"; expanding the scope of tax-exempt income; and relaxing the deeming provisions for Hong Kong residents.