The government is actively formulating plans to comprehensively upgrade the preferential tax system for funds and family offices in Hong Kong. Raymond Chan, Deputy Secretary for Financial Services and the Treasury, revealed that the proposal for amending the "Taxation (Amendment) Bill 2025 - Tax Concessions for Funds, Family Investment Holding Tools and Carried Interests" will be submitted to the Legislative Council next month, and efforts will be made to officially implement it from the 2025/26 tax year. Key revisions include expanding the definition of "funds" to extend the tax exemption scope to retirement funds, donation funds, and specific single investor fund structures (Fund-of-one); expanding the eligible investment tools to include carbon emission derivatives or quotas, carbon credits, insurance-linked securities, loans and private credit investments, digital assets (virtual assets), precious metals, and designated commodities; planning to eliminate the certification process from the Hong Kong Monetary Authority (HKMA), expand the definition of "eligible persons", and simplify distribution arrangements, significantly enhancing the tax certainty for private equity funds (PE Funds). The fund industry in Hong Kong has been growing steadily in recent years, with the asset under management (AUM) of Hong Kong's private equity business currently ranking second in Asia, following only the mainland Chinese market. Since the introduction of the "Limited Partnership Fund regime" in August 2020, the market response has been very positive. As of the end of April 2026, there were 1682 LPFs registered in Hong Kong, representing a significant year-on-year increase of 50%, reflecting global investors' confidence in Hong Kong as the preferred registration location for private equity and venture capital funds, and highlighting Hong Kong's key role as a gateway for overseas funds to enter Asia. The government actively promotes diversified asset management to create a quality business environment for private equity and venture capital companies. The Securities and Futures Commission issued a circular in February 2025 to clarify the regulatory requirements for closed-end funds primarily investing in private and illiquid assets, encouraging large alternative asset funds with regular income to list in Hong Kong. Meanwhile, the MPFA clarified at the end of May 2025 that, subject to relevant regulations, Trillions of MPF funds can be invested in approved listed private equity funds, significantly expanding the investor base. In addition, the first conditionally approved listed alternative asset fund was approved in December 2025 and is planning to be formally listed at the appropriate time. The government introduced funds to the LPF through cross-policy coordination. Since the launch of the "New Capital Investor Immigration Scheme" in March 2024, investments in LPFs have been included in the eligible financial assets requiring a minimum investment of HK$30 million (up to HK$10 million per applicant). As of the end of April 2026, the program has received 3590 applications, with an estimated total investment of around HK$108 billion.