Hong Kong Sweetens Tax Regime to Lure Crypto-Friendly Family Offices

Hong Kong will expand tax concessions for family offices and funds to include digital assets, precious metals, and commodities under its 2026-27 Budget, as the city intensifies efforts to attract wealthy investors amid growing regional competition.

Financial Secretary Paul Chan announced the changes on Wednesday as part of Hong Kong's broader push to position itself as a global hub for digital finance.

The government plans to amend tax laws in the first half of 2026 to explicitly classify digital assets as "qualifying investments" eligible for tax breaks under the city's family office regime. Previously, the tax treatment of crypto holdings for family offices remained ambiguous.

The reforms will also expand the definition of "fund" to include funds-of-one – investment vehicles commonly used by single families – broadening the pool of structures eligible for tax concessions.

Industry players have welcomed the clarity.

Chi Man Kwan, Group CEO of Raffles Family Office, said the measures "will further consolidate Hong Kong's position as a leading global wealth management hub," adding that recent data from the Financial Services and the Treasury Bureau and Invest Hong Kong shows the city has already recorded "significant and rapid growth in the number of single-family offices." He cautioned, however, that sustaining momentum will require policies that support both single-family offices and multi-family offices equally, to foster "the sustainable and healthy development of Hong Kong's overall family office ecosystem."

Part of a Larger Digital Asset Push

The tax changes sit within a sweeping crypto regulatory agenda. The budget confirms Hong Kong will introduce legislation this year to license digital asset dealers and custodians, including over-the-counter brokers and firms providing custody services. Notably, banks will not be exempt — any bank offering these services must register with the Securities and Futures Commission (SFC).

The SFC will also establish a Digital Asset Accelerator to support compliant trading innovation, while the first batch of stablecoin issuer licenses under the Stablecoins Ordinance is expected next month.

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Additionally, regulators are working on margin financing rules and derivatives permissions for professional investors, aiming to deepen market liquidity.

The Bigger Picture

The moves are part of what Chan described as Hong Kong's strategy to develop "new quality productive forces" — blending finance with advanced technology, including AI — under China's 15th Five-Year Plan.

Hong Kong is competing with Singapore, Dubai, and other jurisdictions to attract crypto capital and talent. The city has sought to rebuild its reputation as a digital asset hub after imposing strict retail trading restrictions in 2018, which it began loosening in 2023.

For family offices weighing where to domicile, the explicit inclusion of crypto in Hong Kong's tax-advantaged regime removes a key source of uncertainty — and signals the government's commitment to the sector.

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