Hong Kong's Financial Secretary, Paul Chan, unveiled a comprehensive set of regulatory and fiscal measures in the 2026-27 Budget aimed at solidifying the city's position as a global digital asset hub. The government will expand tax concessions for family offices and funds to explicitly include digital assets, precious metals, and commodities.
The key fiscal reform involves amending tax laws in the first half of 2026 to classify digital assets as "qualifying investments," making them eligible for tax breaks under the city's family office regime. This move resolves previous ambiguity around the tax treatment of crypto holdings for these entities. Additionally, the definition of "fund" will be expanded to include funds-of-one, broadening the pool of structures that can benefit from these concessions.
Industry leaders like Chi Man Kwan, Group CEO of Raffles Family Office, welcomed the clarity, stating it will "further consolidate Hong Kong's position as a leading global wealth management hub." He noted significant growth in single-family offices but cautioned that sustaining momentum requires policies supporting both single and multi-family offices.
Concurrently, Hong Kong is advancing its regulatory agenda. The budget confirms that legislation will be introduced this year to license digital asset dealers and custodians, including over-the-counter brokers. Notably, banks offering these services will not be exempt and must register with the Securities and Futures Commission (SFC).
A major milestone is the imminent issuance of the first batch of stablecoin issuer licenses under the Stablecoins Ordinance, expected next month. These licenses will cover fiat-backed stablecoins. The SFC will also establish a Digital Asset Accelerator to support compliant trading innovation. Regulators are further working on rules for margin financing and derivatives permissions for professional investors to deepen market liquidity.
These efforts are part of Hong Kong's broader strategy, under China's 15th Five-Year Plan, to develop "new quality productive forces" by blending finance with advanced technology. The city is in direct competition with jurisdictions like Singapore and Dubai to attract crypto capital and talent, seeking to rebuild its reputation after imposing strict retail trading restrictions in 2018.
