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23 Mar 2021

The Home Return Permit for your foreign funds

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Second quarter, 2021 – This is when the Hong Kong Legislative Council meets to hear the first and second readings of a landmark bill (the "Bill") that will provide a mechanism for foreign funds to re-domicile in Hong Kong as Open-ended Fund Companies ("OFC") or Limited Partnership Funds ("LPF").

Under the Bill, foreign funds set up as corporates or limited partnerships will be able to, subject to meeting certain eligibility requirements, redomicile in Hong Kong as OFCs or LPFs, respectively.

This is a crucial development that boosts Hong Kong’s investment funds environment, and its prime advantages are substantial: (i) the process does not require a transfer of fund assets or a change of their beneficial ownership, which means there will be no stamp duty implications in Hong Kong, and (ii) investors will not need to be redeemed from the foreign fund and resubscribed into the Hong Kong vehicle.

In other words, the Bill will help managers save both time and cost if they plan to bring their funds home to a burgeoning market.

The proposed application mechanism is straightforward, as summarized in this briefing.

Click here to read more.

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