AIMA welcomes Hong Kong fund tax changes to strengthen asset management industry

• The expanded tax regime will now cover private credit, virtual assets and real estate funds, in addition to hedge funds and private equity.
• The carried interest changes provide an effective tax exemption for carried interest and performance fees.  
• AIMA worked closely with the Hong Kong Government, the Securities and Futures Commission (SFC), the HKMA and the Inland Revenue to help shape these proposals.

Hong Kong is on the cusp of long-awaited asset management tax reforms that will reinforce its position as a premier asset management hub in Asia.

The Hong Kong Government is expected to introduce a bill to the city’s Legislative Council on 12 June 2026, proposing changes to the Unified Fund Exemption Regime and carried interest incentive, which the Alternative Investment Management Association (AIMA) believes will generate significant interest from regional and global asset managers.

The amendments to the unified fund exemption significantly broaden the scope of Hong Kong’s fund tax exemption regime, making it relevant to almost all major asset management strategies. Importantly, the expanded regime will cover private credit, virtual assets, and real estate funds, alongside hedge funds, private equity, and other alternative investment strategies.

The carried interest reforms provide an effective tax exemption for carried interest and performance fees, not only at the manager and general partner level, but also for employees who are involved in relevant asset management activities.

AIMA, as the world’s largest alternative investment trade body, has worked closely with the Hong Kong Government, the Securities and Futures Commission (SFC), the HKMA and the Inland Revenue Department – alongside other industry groups and partners – to help shape these proposals.

The reforms reflect the Hong Kong Government’s clear commitment to maintaining and enhancing Hong Kong’s status as Asia’s leading asset and wealth management hub. They are designed to encourage more asset managers to establish and expand their operations in Hong Kong, while taking advantage of the city’s unique role as a gateway for capital flows to and from Mainland China and the wider region.

Michael Bugel, Co-Head of APAC for the Alternative Investment Management Association, said: "Competitive tax treatment for carried interest and performance fees is critical to reinforcing the city's status as a premier hub for private capital and alternative investments. These changes will only enhance Hong Kong’s ability to attract global fund managers, talent, and capital."

Darren Bowdern, Head of Asset Management Tax for KPMG in Asia, said: “Hong Kong’s proposed carried interest and performance fee exemptions represent a significant opportunity for the asset management industry. These reforms should make Hong Kong a much more attractive location for investment managers, portfolio managers and other investment professionals who are considering where to establish or expand their regional operations. We expect strong interest from both regional and global asset managers looking to use Hong Kong as a platform to manage capital, investment teams and assets across Asia.”

Paul Ho, Co-Chair of Hong Kong Tax Committee AIMA, said: "Hong Kong's enhanced unified fund exemption and carried interest unlock compelling opportunities, reinforcing its position as a leading global asset management hub, attracting both capital and talent."

Editor’s Note:

For more information on the latest changes to Hong Kong’s tax code and to better understand what it means for the asset managers and the jurisdiction’s standing as a global financial hub, can listen to The Long-Short podcast: Ep. 135 The Long-Short | A landmark moment for Hong Kong asset management industry