2020 Family Office Series
The 2020 Family Office Series is a 6 weeks special coverage on family office and multi-family office in Asia. Hear from leading family office experts, institutes, private banks, family offices and many more. Learn about family office, changes family office are facing, how to setup a family office or join a multi-family office. Find out how the biggest wealth transfer is taking shape, how managing traditional wealth and new wealth is different and many more.
About Family Office: Family offices manage assets of the wealthiest people in the world. There are about 2,800+ billionaires, 290,000 UHNWs and 15,000+ family offices worldwide. Billionaires and UHNWs setup family offices, with assets ranging from $300 million to $3 billion, and some with more than $10 billion assets. Newer family offices are also setting up family offices with $20 million to $100 million.
- 2020 Top 10 Largest Family Office in the World
- 2020 Top 10 Largest Multi-Family Offices in the World
- UBS Global Family Report 2020
Interview with Dixon Wong, Head of Financial Services at InvestHK
Interview with Dixon Wong, Head of Financial Services at InvestHK
We interview Dixon Wong, Head of Financial Services at InvestHK, sharing his valuable insights on family office, landscape of family office in Hong Kong, why setup family office in Hong Kong and how to get started.
Highlights from interview:
- InvestHK: ” Aims to provide one-stop ease for family offices “
- ” Provides free tailored services to companies that come to us seeking assistance in business setting up or expansion “
- Policy: “The Hong Kong government strives to, and will continue to, integrate a series of measures and adopt more proactive methods to promote the industry “
- On Hong Kong: ” Growing impact in becoming a regional philanthropic and sustainable finance centre “
- UHNW in China: ” 84,000 UHNW families in Greater China, 19,300 (20%) are in the Greater Bay Area “
” one-stop ease for family offices “
Who are you and what do you do?
Dixon: I am the Head of Financial Services at Invest Hong Kong (InvestHK), the Hong Kong government department responsible for attracting foreign and Mainland investors to set up or expand businesses in Hong Kong.
- Head of Financial Services at InvestHK
- Attract investors to set up businesses and achieve success in Hong Kong
- Maintain close contact with Family Offices and industry stakeholders
Put simply, like other sector teams in the department, my team is on the frontline representing the HKSAR government to maintain close contact with industry stakeholders in the financial sector including family offices.
1. If clients want to set up a family office or investment firm in Hong Kong, how do they get started? Do they go to you (InvestHK) or directly to the private banks, family office advisory firms or family office service providers?
Dixon: InvestHK provides free tailored services to companies that come to us seeking assistance in business setting up or expansion. It is not obligatory, but given our reliable brand, many foreign companies do approach InvestHK for advice and assistance, and I believe that family office operators would be no exception.
” Given our reliable brand, many foreign companies do approach investhk for advice and assistance “
InvestHK help clients to tackle issues
Compared to other stakeholders, InvestHK as a government arm aims to facilitate and assist client companies to tackle issues during business incorporation or ongoing business expansion.
For example, we will provide information on relevant laws and regulations, referrals to government bodies and business professional services, marketing and publicity support as well as networking opportunities and more.
- facilitate and assist client companies during business incorporation or ongoing business expansion
- provide information on relevant laws and regulations
- referrals to government bodies and business professional services
- marketing and publicity support
- networking opportunities and more
One major difference between InvestHK and other stakeholders is that we do not provide investment advices for clients, which will be the professional areas of private banks and other service providers recruited by the family offices concerned. In short, InvestHK aims to provide one-stop ease for family offices, and we are particularly keen on assisting those that use Hong Kong as a regional base from which to manage their wealth and investment portfolio in Asia and the world.
” INVESTHK Aims to provide one-stop ease for family offices “
2. Who are your competitors?
Dixon: InvestHK is the government department that offers one stop convenience to family offices, and we do not compete with other stakeholders because our focus and responsibility is different. We facilitate family offices and other stakeholders in the industry. All market players in the financial services / family office sector can be our partners.
From a regional perspective, however, Hong Kong is often compared with other Asian cities like Singapore in many economic areas. While I really think both cities have their own merits in terms of attraction for global family offices and in terms of their specific financial regimes, many would agree that Hong Kong as part of China and with its increasing roles in Mainland’s economic development makes a perfect gateway for family offices to access the massive wealth management market arising from the Greater Bay Area development.
Hong Kong is also famed for its traditional free market mechanism, which is one of the most important considerations for foreign investors when choosing where to base.
3. What is the family office landscape like in Hong Kong? Why does InvestHK want to develop Family Office?
Dixon: Family offices, though still a new term to people on the street, are not new at all. It has been developing rapidly over the past decade or so, not only in terms of the amount of their investment portfolio but also the diversity of their asset allocation.
Billionaires & Fast Growing UHNWIs in China
Another thing that puts Hong Kong in an advantageous position in becoming a global family office hub is the fast-growing cluster of ultra-high-net-worth individuals (UHNWIs) in China arising from the rapid economic development of the country over the past few decades. Hong Kong being the international financial city of China offers a reliable platform for these billionaires to manage their mega-wealth around the world. This means tremendous business opportunities for asset and wealth management companies in Hong Kong in terms of wealth management turnovers and employment in related financial sectors.
Top International Financial Centre and Wealth Management Centre
Moreover, as a top international financial centre and wealth management centre, Hong Kong has a stable and flexible capital market, abundant liquidity and free capital flow, coupled with a sound legal system and a large number of international talents, and more importantly, Hong Kong has a growing impact in becoming a regional philanthropic and sustainable finance centre. All this add up in very strong appeal for global family offices to come to Hong Kong.
” Hong Kong has a growing impact in becoming a regional philanthropic and sustainable finance centre “
On Setting up Family Office
1. Are new family offices setting up in Hong Kong from China or Asia? Or are they coming from Middle-East, Europe or even America?
Dixon: They come from all over the world. But obviously, those from China, especially the Greater Bay Area, account for a big portion.
” 84,000 UHNW families in Greater China, 19,300 (20%) are in Greater bay area “
The Greater Bay Area contributes to the strong wealth growth momentum in Greater China: there are more than 84,000 UHNW families in Greater China, increasing by around 20% in the past 3 years; more than 19,300 UHNW families are in the Greater Bay Area, representing more than 20% of the entire Greater China; the valuation of unicorns in the Greater Bay Area also increased from $45.9 billion (RMB300 billion) in 2017 to more than $91.8 billion (RMB600 billion) RMB600 billion in 2019, implying the value was doubled in 2 years.
All these demonstrated that wealth creation is strong in the Greater Bay Area, so do the family office businesses.
- 84,000 UHNW families in Greater China
- 19,300 UHNW families are in the Greater Bay Area
2. How fast can a family office be setup in Hong Kong, including Private Bank accounts etc?
Dixon: Generally registering a business in Hong Kong is simple and fast, thanks to technological advances in recent years. However, the time needed to obtain a bank account depends on various factors, such as the type of account, the business scale of family office and the procedural complexity of different banks.
InvestHK can offer a list of banking service providers, with their brief profiles and contact details, to incoming family offices for their reference, so they can make more informed decisions before picking a bank.
” Time to open bank account Depends on the type of account, the business scale of family office and the procedural complexity of different banks “
3. Is there any changes or new initiatives that family offices or investment firms should know?
Dixon: As an international financial centre, Hong Kong has a vital role to play in the investment industry, and is committed to strengthening its position for investment and wealth creation in the region. The Hong Kong government strives to, and will continue to, integrate a series of measures and adopt more proactive methods to promote the industry.
The Family Office Team (FO Team)
One of these measures is to set up a dedicated global team (FO Team) to step up promotion of our advantages in Hong Kong, Mainland China and other major markets, and offer one-stop support services to Mainland and overseas family offices that are interested in establishing a presence here.
The FO Team will be a collaborative effort with key stakeholders including the Financial Services and the Treasury Bureau (“FSTB”), the Hong Kong Monetary Authority (“HKMA”), the Securities and Futures Commission (“SFC”) and the Financial Services Development Council (“FSDC”) with the objectives of:
- Positioning Hong Kong as a leading family office hub in Asia;
- Providing a “one-stop” platform with exclusive and bespoke services to Mainland and overseas investors to facilitate their setting up of family offices in the city;
- Encouraging and supporting family offices already established in Hong Kong to expand their business in the city;
- Facilitating discussions between family offices and key stakeholders, regulators and government departments; and
- Building significant family offices presence in Hong Kong.
Also, following the implementation of the unified tax exemption and open-ended fund company regime, Hong Kong continues to enhance its competitiveness with the introduction of the Limited Partnership Fund (LPF) regime.
Limited Partnership Fund (LPF) and Wealth Management Connect
The new LPF regime provides an alternative investment vehicle for private fund managers who are raising funds or investing in the Asia Pacific region and looking for a regionally domiciled fund vehicle. In short, the LPF regime, together with the upcoming carried interest tax concession is another key milestone towards building a broader asset and wealth management ecosystem in Hong Kong.
And I believe many market players are aware of Wealth Management Connect too. The Hong Kong Monetary Authority, the People’s Bank of China, and the Monetary Authority of Macao jointly announced in June 2020 the launch of a cross-boundary wealth management connect pilot scheme. The two-way cross-boundary Wealth Management Connect marks another important milestone for the Mainland’s capital account liberalisation after the Stock Connect and Bond Connect schemes. It represents a major breakthrough in Hong Kong’s offshore renminbi business development, and a significant step to foster closer financial cooperation in the Greater Bay Area.
And of course, family offices or investment firms are welcomed to contact us to consider how they can leverage on the benefits of these measures and schemes to create greater value for themselves or their clients.
4. Where can family offices find more information about setting up family offices or investment firm in Hong Kong?
Dixon: We have created a flyer summarising the benefits for family offices to establish a presence in Hong Kong. Flyer: Hong Kong Smart Choice for your Family Office
A dedicated family office website has also been launched: www.familyoffices.hk
It contained detailed information on the steps of setting up family offices in Hong Kong and key areas to consider. They can also reach out to me or any of my team members directly via email or social media. We are always happy to be helpful.
- Email Address: enq@InvestHK.gov.hk
- Attention: Dixon Wong, Head of Financial Services, InvestHK
- Send via: InvestHK Contact Form
Common issues when setting up Family Office
1. What are the common issues family office will face when setting up a family office in Hong Kong? Especially for clients who are less familiar with Asia or Hong Kong.
Dixon: The most common issues our clients faced are related to obtaining licenses, finding reliable service providers and relocation of personnel. For some overseas families, since they lack the access to local network and knowledge, sometimes it is hard for them to digest pages of regulations and rules governing the wealth management industry, or identifying the right lawyers or accountants to help on set up, or getting the visa applications done fast and quick.
- obtaining licenses
- finding reliable service providers
- relocation of personnel
- lack the access to local network and knowledge
- hard for them to digest pages of regulations and rules
- identifying the right lawyers or accountants to help on set up
- visa applications done fast and quick
Turning to us is welcomed when they are in these predicaments. We can coordinate the communication between them and government bodies to facilitate the application of licenses or working visas. We can also connect them with a number of local service providers registered in our database. We can also provide them with the most updated market information so as to reduce their information cost. All these can help bridge the gap and make their launches easier and smoother.
1. How is the journey for you so far as Head of Financial Services at InvestHK, working in Hong Kong and worldwide with many government entities, financial institutions, family office industry partners, and advising family offices, billionaires and UHNWs?
Dixon: I spent over 25 years in major private sectors as an accountant and investment banker before I joined InvestHK in the public sector. The transition was very smooth as I can leverage on my previous network to add value to my current position at InvestHK.
Like my previous positions, I enjoy interacting with multiple counterparts as well as travelling around the world to meet people and to promote Hong Kong as a world-class financial centre.
It is a great pleasure for me to work in my current position as it is an interesting job with an important mission to attract foreign and Mainland companies to set up and expand in Hong Kong.
2. Any other things you want to share to billionaires, UHNWs, family offices, industry partners or family office professionals?
Dixon: As the old saying goes, better to ask the way than go astray. Before you take any actions on setting up or expanding your companies or family offices, it is always better to gather some more information and understand the landscape, regulations and market trends. And how can you get these information for free? Come to us!
” Better to ask the way than to go astray “
3. Best or favourite city for family office meetings or gatherings in the world?
Dixon: Hong Kong is definitely the best city for family office meetings or gatherings due to various reasons which mentioned earlier. On top, it is a vibrant and dynamic city with beautiful sceneries, nice food and friendly people!
The Government of the Hong Kong Special Administrative Region
Dixon Wong is the Head of Financial Services at Invest Hong Kong (InvestHK). Dixon was appointed as the Head of Financial Services at Invest Hong Kong (InvestHK) in March 2019. InvestHK is the government department responsible for investment promotion, i.e. helping overseas and Mainland companies to establish or expand their business presence in Hong Kong.
Dixon had held various senior positions in a number of different departments in an international bank for more than 20 years. Before that, he worked in the assurance and advisory department of a big four international accounting firm.
He had obtained a LLB (Hons) degree and a MBA degree from the United Kingdom, is a Chartered Accountant (CA, Aust & NZ), Fellow Certified Public Accountant (FCPA, Hong Kong) and Fellow Chartered Secretary (FCIS, UK; FCS, Hong Kong). Dixon is also a member of HKTDC Financial Services Advisory Committee and Steering Committee of Asian Financial Forum.