According to PANews, on October 21, Hong Kong Financial Services and the Treasury Bureau Director Paul Chan said that the government plans to optimize the current tax incentives provided to the asset and wealth management industry in many aspects, in an effort to expand the market to a higher level.

Xu Zhengyu said that the authorities proposed to expand the categories of eligible assets to include new carbon emission derivatives/emission limits, insurance-linked securities, loans and private debt investments, and virtual assets, so that transactions in such assets can also be exempt from profit tax.

It is recommended that any person carrying on financial institution business, insurance business or money lending business in Hong Kong who also holds a 10% or more beneficial interest in a fund will be deemed to derive assessable profits from the income derived from loan or private placement debt investments in respect of the fund.

In the next step, the Finance and Treasury Bureau will issue a consultation document on the overall recommendations. After collecting and analyzing opinions, it will propose relevant legal amendments to implement various optimizations to add further impetus to the development of the industry.