In the third step to develop Hong Kong as a private equity hub, the Securities and Futures (Amendment) Bill 2021 and Limited Partnership Fund and Business Registration Legislation (Amendment) Bill 2021 were passed by the Legislative Council on 30 September 2021. The two amendments provide for new fund re-domiciliation mechanisms for existing funds set up in corporate or limited partnership form outside Hong Kong to re-locate their registration and operation to Hong Kong and to be registered as open-ended fund companies (OFCs) or limited partnership funds (LPFs) respectively. The re-domiciliation mechanisms will come into operation on 1 November 2021.
The first two steps of the process were the introduction of:
In a government press release, the Secretary for Financial Services and the Treasury, Mr Christopher Hui, said, "To give full play to Hong Kong's advantages as an international asset and wealth management centre, introducing the fund re-domiciliation mechanisms enhances the investment fund regimes of Hong Kong with a view to attracting investment funds from all over the world to set foot in Hong Kong. This would further develop Hong Kong into a preferred fund domicile and drive demand for local related professional services, and in turn strengthen Hong Kong's position as an international financial centre."
Under the new rules, foreign investment funds set up in corporate or limited partnership form may apply to the Securities and Futures Commission or the Companies Registry for registration of the fund as an OFC or LPF in Hong Kong respectively. Upon re-domiciliation, the continuity of the fund, including contracts made and property acquired, will be preserved. The mechanisms do not operate to create a new legal entity but rather allow for a continuation of the original fund. The fund would have the same rights and obligations as any other newly established OFC or LPF in Hong Kong. The fund would be required to deregister in its original place of establishment upon completion of re-domiciliation.
With this third step now completed, it is hoped this will spur the rapid development of the asset and wealth management business of Hong Kong.
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