Hong Kong is regaining its status as an international financial centre and boosting the Asian wealth management (WM) sector as a whole, according to a recent report.

European and US firms are increasingly selecting Hong Kong as their preferred jurisdiction for launching in Asia after years of looking to Singapore, and family offices are relocating from Singapore to Hong Kong, finds Ocorian, a provider of corporate services.

The impact of the Covid-19 pandemic and political unrest in Hong Kong had knocked its international reputation, but that is now changing, the firm believes, with more family offices opening and firms investing in their operations and making acquisitions.

The switch back to Hong Kong, it argues, is positive for Asia, in general, and the WM and private client sector, in particular, with Singapore retaining specializations in shipping, maritime, private banking and WM, while Hong Kong is the hub for North Asia and dominant for capital raising.

One advantage for Hong Kong in the family office sector, Ocorian points out, is that organizations can operate as family offices as long as they meet legal requirements, while in Singapore organizations have to apply for a licence to operate as a family office, which can take between 12 to 18 months before they can open for business.

“A lot of the scar tissue and muscle memory has faded as international investors increasingly recognize the ongoing strengths of Hong Kong as an international financial centre,” says Robin Harris, the firm’s head of Asia-Pacific. “It is objectively a very attractive place to position yourself.

“Hong Kong’s strategic location at the heart of Asia makes it a gateway to the vast Chinese market and an important hub for connecting global markets. Its extensive networks with the rest of the world and close financial integration with mainland China provide businesses with valuable opportunities for growth and expansion.

“Hong Kong’s free flow of capital allows for efficient movement of funds, making it an attractive destination for investors and businesses. Additionally, the city's simple and competitive tax regime, with low tax rates and various tax incentives, further enhances its appeal as a financial hub.

“Since 2017-2018, its huge strengths have been somewhat overlooked; and while Hong Kong is now more oriented to the mainland, it is repositioning itself with Western investors, which is a win-win for the Asian WM sector, in general, with more foreign companies coming to the region.”