Hong Kong to Exempt Hedge Funds from Tax on Crypto Gains
Hong Kong has put forth a proposal to exempt gains from cryptocurrency for hedge funds, private equity firms, and family investment vehicles in order to further establish itself as a key crypto finance hub.
This proposal, which is open for consultation for six weeks, also includes exemptions for private credit, international property investments, and carbon credits, according to a report by the Financial Times.
By offering these incentives, Hong Kong hopes to compete with neighboring countries like Singapore, which has a similar tax exemption policy, and Switzerland, known for its expertise in wealth management. If approved, this exemption could boost Hong Kong’s digital economy and attract more international investments.
This move by Hong Kong comes amid fierce competition with its counterparts Singapore and Switzerland, with the latter’s introduction of a Variable Capital Company (VCC) framework in 2020 leading to over 1,000 funds being housed under it.
