Hong Kong Moves to Waive Tax on Fund Managers' Bonuses to Court Wealth

The Hong Kong government gazetted a bill on Friday that would waive salary tax on the performance-linked bonuses paid to fund managers, provided they meet certain conditions, the South China Morning Post reported. The measure is part of a broader package of tax reforms intended to strengthen the city's role as a wealth-management center.

The move targets the so-called carried interest earned by investment professionals, a form of compensation that competing financial centers including Singapore have worked to attract. By exempting it from salary tax, Hong Kong is signaling that it wants to draw fund managers and the capital they oversee back to the city after years in which political and regulatory uncertainty pushed some firms elsewhere.

The bill still requires passage by the legislature before it takes effect. Its introduction reflects a wider regional contest among Asian financial centers to host the managers of private capital, a business that brings high-paying jobs and deepens local markets.

For Hong Kong, the stakes extend beyond revenue. Re-establishing itself as a premier destination for global asset managers would help counter the perception that its standing as an international financial center has eroded under tighter mainland Chinese influence.