Hong Kong's financial sector is urging lawmakers to speed up a proposed tax break on carried interest. They want to maintain their competitive edge against Singapore. This request follows Singapore's announcement of a tax-exemption scheme designed to attract asset managers. The bill was submitted in June and is expected to be voted on later this year, according to the South China Morning Post.
Key Details
Industry participants say the proposed exemption is vital for hedge fund and private equity managers. They believe it is crucial for Hong Kong to keep its status as a top global wealth management center. Jasmine Lee Shun-yi, vice-president of the Hong Kong Institute of Certified Public Accountants, stressed the need for quick action. She said, "Hong Kong needs to proceed quickly with the proposed law change to continue strengthening our established reputable position as the No 1 global wealth management centre."
Background
The competition between Hong Kong and Singapore is heating up. Both cities have asset management industries worth over $5 trillion. On Wednesday, Singapore's Monetary Authority held a meeting where officials discussed tax incentives for fund managers. The specifics of Singapore's tax plans are still unclear. However, they are expected to be revealed in the upcoming annual budget. The Business Times reported that this announcement has already sparked significant interest among fund managers in Singapore. It has led to more consultations with tax advisors.
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The proposed tax changes in Hong Kong and Singapore could affect where hedge funds and asset managers choose to relocate. This could impact the asset management sectors in both cities. Investors will be looking for the upcoming budget announcement from Singapore. This may provide more details on its tax incentives for fund managers.
Based on reporting by: scmp.com, businesstimes.com.sg