Hong Kong is making strides in points of focused tax reforms, a sturdy preliminary public providing market, and progressive digital asset rules — advances poised to remodel Asia’s monetary hub into the world’s largest cross-border asset and wealth administration middle, monetary analysts stated.
Eddie Yue Wai-man, chief government of the Hong Kong Financial Authority, stated that the authority will proceed to work carefully with the federal government of the Hong Kong Particular Administrative Area, the trade and the worldwide neighborhood to drive coverage innovation and market enhancements to additional strengthen Hong Kong’s competitiveness within the wealth administration and asset allocation enterprise.
“On the one hand, the Chinese language mainland’s financial development and wealth accumulation, together with enhancements and expansions to varied Join Schemes, will additional broaden the shopper base for Hong Kong’s wealth administration trade, whereas uncertainties are prompting worldwide buyers to undertake extra proactive diversification methods to higher handle dangers,” Yue stated.
Based on the most recent figures launched by the Securities and Futures Fee in Hong Kong, complete property beneath administration in Hong Kong grew 13 p.c yearly, reaching HK$35 trillion ($4.48 trillion) by the tip of 2024. The property beneath administration of the personal banking and personal wealth administration sector elevated 15 p.c year-on-year, and internet fund inflows totaled HK$384 billion.
Forty-six banks expanded their personal banking or personal wealth administration enterprise in Hong Kong in 2024, and the property beneath administration of those establishments grew 14 p.c within the first half of 2025, in contrast with the tip of 2024, in line with the authority’s knowledge.
“Hong Kong’s dedication to refining its Unified Funds Exemption regime, fostering a vibrant IPO market, and establishing clear rules for digital property sends a powerful sign to world asset managers,” stated Vivian Chui, KPMG China’s Hong Kong head of securities and asset administration.
“These efforts show how efficient regulatory help and focused packages could be in shaping a dynamic and aggressive asset administration hub, positioning Hong Kong to capitalize on alternatives within the evolving monetary panorama,” she added.
Latest refinements to Hong Kong’s Unified Funds Exemption regime give attention to broadening its scope to incorporate various property resembling personal credit score. These enhancements are prone to bolster the town’s competitiveness by clarifying that each fund entities and their particular objective automobiles stay tax-neutral, thereby offering tax certainty.
Beginning in August, Hong Kong has established a regulatory regime for stablecoin — a kind of cryptocurrency whose worth is pegged to a different asset — together with the issuance of digital tokens backed by fiat currencies. The regulatory framework additionally has constraints aimed toward lowering dangers and leverage within the crypto-related section.
“We count on stablecoin will proceed to be a gateway to crypto asset buying and selling, for the comfort it offers as a commerce pair within the blockchain-based surroundings,” stated S&P International Rankings credit score analyst Michael Huang. “By providing stablecoin-linked merchandise or digital property, Hong Kong banks might entice clients domestically and throughout borders which are searching for offshore crypto exposures.”
Within the first half of 2025, the entire transaction quantity of digital asset-related merchandise and tokenized property in Hong Kong banks reached HK$26.1 billion, marking a 233 p.c year-on-year surge and surpassing final yr’s complete, the HKMA stated.
“Hong Kong’s standing as a regional hub for asset and wealth administration can also be supported by its mature monetary markets, resilient Linked Change Fee System, strong banking sector and vibrant capital markets, providing quite a few funding and value-enhancement alternatives for world capital,” stated Yue, the HKMA chief government.
Within the first half of this yr, funds raised by means of the Hong Kong IPO market exceeded HK$100 billion, making the town the highest IPO market globally so far, HKMA knowledge confirmed.
“The HKMA has ample ammunition to defend the (forex) peg in case the Hong Kong greenback converges in the direction of the weak finish of the band. Overseas trade reserves have declined lately however stay nicely above regulatory ranges,” stated Carlos Casanova, Asia senior economist at Swiss personal financial institution Union Bancaire Privee.
The soundness offered by the peg outweighs the adverse results even when Hong Kong faces cyclical challenges, because the enterprise cycle of Hong Kong is extra aligned with the Chinese language mainland than america, Casanova added.
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