As the Middle East situation grows unstable due to war between the United States and Iran, Hong Kong's status as an "Asian family office (FO) hub" is becoming even more solid. With global capital flocking in—Hong Kong topped the world in initial public offering (IPO) proceeds, surpassing the U.S. Nasdaq—the view is spreading that it is a city optimized for FO capital operations.
Earlier, U.S. financial media outlet CNBC reported in March, citing investment industry sources, that "as Dubai's image as a safe haven is shaken by the Iran war, Hong Kong's expanded tax incentives for family offices could attract wealthy people rethinking Middle East investments." Gavin Cheong, a partner at the U.K. law firm Charles Russell Speechlys and a lawyer specializing in fund formation, said in an interview with CNBC, "I consult almost daily with families considering setting up a family office in Hong Kong, even families who left Hong Kong in the past."
This trend is also evident in the numbers. The Hong Kong government recently said about 160 FOs are preparing to establish or expand operations in Hong Kong. Moreover, according to Deloitte Touche Tohmatsu Limited (DTTL), as of the end of 2025, Hong Kong already has 3,384 single family offices (SFOs), an increase of 681 over two years. An SFO refers to an FO dedicated solely to the asset of a single wealthy individual or one family.
◇ Hong Kong drawing global capital
Hong Kong appeals to wealthy individuals not only because of a tax environment favorable to FO operations, but also because it has an environment suited for asset growth as global capital concentrates there. According to financial data provider LSEG and others, Hong Kong raised more than $37 billion (about 56 trillion won) in IPO funds last year, ranking No. 1 worldwide. In the first quarter of this year, it also attracted $13.3 billion (about 20 trillion won), far outpacing the U.S. Nasdaq and the New York Stock Exchange.
Notably, with 55% of first-quarter IPO proceeds this year concentrated in artificial intelligence (AI) and technology corporations, Hong Kong is rapidly establishing itself as a "technology hub." This year, Chinese AI corporations Zhipu and MiniMax raised a combined $1.3 billion (about 2 trillion won) through IPOs on the Hong Kong stock market, and their share prices have risen more than 400% since listing. The Financial Times (FT) of the U.K. said in April that "this shows Chinese corporations pursuing overseas expansion and research and development investment are using Hong Kong as a key fundraising channel."
The Hong Kong government is also focusing on fostering the bio industry. Hong Kong is well known for supporting the entire cycle from research and development to commercialization, based on a global investor network and clinical and research infrastructure. Bettina Ernst, M.D., a director at Bernina BioInvest, an investment firm specializing in early-stage bio and medtech investments, said, "Hong Kong is a key hub where talent, research and partnerships across Asia intersect, offering an ideal environment for innovation investment," adding, "Early-stage corporations can easily access universities, clinicians and cross-border collaboration networks, enabling swift validation and scaling, which is essential to translate scientific achievements into real patient benefits."
◇ Low taxes and simple FO setup process
Hong Kong has long been favored by capitalists for its simple and low tax structure. There is no capital gains tax, value-added taxes (VAT), inheritance tax or estate tax in Hong Kong, and no withholding tax on dividends or interest. Corporate tax is a two-tier system, applying an 8.25% rate to the first HK$2 million (about 400 million won) of corporate profits. In addition, SFOs that meet certain conditions can receive tax exemptions, providing a highly favorable environment for wealthy individuals whose primary goal is asset preservation and management.
This contrasts with the recent trend of major global cities moving to raise taxes. The United Arab Emirates introduced a corporate tax in 2023, lifting the rate from 0% to 9%. Japan also raised corporate taxes starting in April by adding 4% to the corporate tax amount for each business year after deducting 5 million yen (about 47 million won), and New York state in the United States is reportedly considering a corporate tax hike as well. California is also pushing a 2026 ballot measure to impose a one-time 5% "wealth tax" on residents with net worth exceeding $1 billion (about 1.5 trillion won).
To actively attract FO demand, the Hong Kong government is continually expanding the scope of eligible investments that SFOs can manage. The government is strengthening tax incentives for SFOs, family-owned investment holding companies and investment funds. The core is expanding tax benefits for a wide range of assets, such as precious metals like gold, digital assets and private credit.
The FO setup process is also relatively simple. If the activity does not fall under regulated activities under Hong Kong's Securities and Futures Ordinance, no separate licensing or prior approval is required to establish a family office. This contrasts with Singapore, where licensing is required and it typically takes several months or more to begin actual operations.
For these reasons, Hong Kong's popularity is rising among wealthy individuals seeking to expand both their businesses and family assets at the same time. With interest from Korean wealthy individuals also growing, Jolie Ip, global deputy head of the family office division at InvestHK, plans to visit Korea soon to meet domestic wealthy individuals and businesspeople to discuss cross-border investment opportunities and cooperation.
Ip said, "As family corporations pursue overseas expansion and business diversification, the need to manage family assets professionally and systematically is growing," adding, "Hong Kong is playing an important role as global corporations expand their business base into mainland China and across Asia."
She added, "For Korean high-net-worth individuals, Hong Kong is not just a base for boosting corporate value, but also a place to find new opportunities in terms of personal asset growth and life goals," noting, "Hong Kong will be an attractive springboard into the most dynamic industries in the world."