How Hong Kong is positioning for a bigger role in Asia’s family wealth transition

Hong Kong is positioning itself as a significant hub for family wealth transition across Asia, according to financial regulators and industrial executives. The city's unique "one country, two systems" principle provides a free flow of capital, a common law legal system, a simple low-tax regime, and a compatible regulatory environment, ensuring certainty and predictability for wealthy families.

Undersecretary Joseph Chan Ho-lim highlighted that Hong Kong is the only city that combines China's advantages with the global sphere, making it the ideal location for both China and international businesses. As a result, the city is attracting a growing number of Asian family enterprises preparing for leadership transitions. Younger generations are viewing succession as an opportunity to reinvent businesses rather than merely inheriting them.

They are eager to create distinct legacies in emerging sectors such as artificial intelligence and green technology. Christina Gaw, managing principal at Gaw Capital Partners, noted that younger family members are increasingly interested in emerging markets as they diversify risk. They are deploying capital into traditional high-cash-flow sectors like shipping and energy transition, which require active modernization in the face of global supply disruptions.

To achieve greater scale, family businesses need institutional capital from various sources, including insurers, banks, family offices, and pension funds. Carlo Pesenti, chairman and CEO of Italy-based investment company Italmobiliare, agreed that a broader base of institutional investors could boost family enterprises' financial firepower and enable larger deals.

Hong Kong is well-positioned to meet these diverse investment objectives and execute complex global portfolio strategies, thanks to its market depth and liquidity. The city is rolling out legislative proposals to expand tax concessions for family offices and funds, broadening eligibility to alternative assets such as private credit, digital assets, and carbon derivatives.

The government's five-year plan underscores its ambition to strengthen Hong Kong's status as a premier global hub for cross-border wealth management. Currently, Hong Kong hosts over 3,380 single-family offices, a 25% increase over the past two years, contributing more than US$10 billion annually to the local economy.