Against the backdrop of the year 2020 which has brought unprecedented change and challenges in an uncertain world, in our contribution to the Chambers & Partners Global Practice Guide on Private Wealth 2020, our Founder & Managing Partner Vivien Teu penned her observations and thoughts, with an overview on the current complex and dynamic time that is shaping private wealth issues and planning needs, at the same time highlighting the trends, updates and opportunities that private wealth advisors can seek out amidst the uncertainties as Hong Kong further develops as a private wealth centre.
At the time of writing, the world is facing the biggest public health crisis of the century, and though the battle is not over, Hong Kong demonstrated success in its fight when it was one of the earliest places to navigate all the unknowns and fears of the new coronavirus Covid-19. This should give some confidence in Hong Kong’s resilience, even as Hong Kong faces fresh questions on its long-standing position as the bridge between China and the world, and as a city with rich tradition and characteristics of the East as well as the West.
As with everywhere, private wealth advisors and clients have adapted to the new normal of an increasingly transparent world of FATCA and the common reporting standard, which makes robust and effective planning even more important and necessary. While this is the new normal in the world of private wealth planning, Hong Kong is confronting its own unique uncertainties but Hong Kong’s unique role remains key and continues to evolve alongside the changes and developments of China’s economic and financial markets, while at the same time finding its place along with Mainland China in a new geo-political order of a rising China.
From the natural and ready advantages of Hong Kong as a leading international hub for initial public offerings and as an established asset management centre and funds industry, to Hong Kong’s positioning to be a private equity hub, family office hub and sustainable finance hub, as well as a review of the current regulatory landscape on operating an investment business or trust business, Hong Kong’s tax environment and Greater Bay Area plans, Hong Kong offers unique infrastructure for private clients in building their business empire and also legacy.
In the crisis it brings much hope and encouragement to see an explosion of philanthropic initiatives and calls for a hard look at our society’s values and purposes to build back better post-Covid, gathering strong momentum for environmental, social and governance (ESG) considerations in both public and private markets towards positive impact. There are increasing interest and scope for more private clients who are entrepreneurs and high-net-worth individuals/families to engage in philanthropy, either through family foundations or charitable giving, as well as engaging in impact investments. In June 2020 the SFC and the HKMA has launched the new Green and Sustainable Finance Cross-Agency Steering Group which signals an exciting milestone for more coordinated approach and actions towards ESG policy-making in Hong Kong. The Financial Services Development Council (FSDC) has also issued its paper the following month, on developing Hong Kong into Asia’s ESG Investment Hub.
The write-up concludes that Hong Kong is a progressive centre that does not rest on its laurels, but continues to review and keep pace with international developments and standards. Despite challenges and uncertainties, there are reasons abound for confidence that Hong Kong continues to compete and present significant opportunities and tools as a centre for private wealth management.
Download the pdf of the publication in full:
The e-Edition of ‘Private Wealth 2020’ and any of its individual chapters are downloadable from the Global Practice Guides website via the link below:
https://practiceguides.chambers.com/practice-guides/private-wealth-2020