Asset Management license in
Hong Kong 2024
Hong Kong, a leading global financial center known for its strategic geographic position, competitive tax policies, and strong regulatory framework, provides an optimal environment for businesses in the asset management sector. Securing a Type 9 license under the Securities and Futures Ordinance (SFO) is not merely a regulatory requirement; it is your gateway to excelling in the dynamic asset management market. Our services offer a strategic roadmap to not only obtain but also maximize the benefits of a Hong Kong Type 9 license, enhancing your firm’s credibility and ensuring success in this vibrant financial landscape.
Regulations for Asset Management license in Hong Kong
Securitiues and Futures Commision (SFC), nder the Securities and Futures Ordinance (SFO), which came into effect on April 1, 2003, functions as the regulatory and supervisory body for finance-related entities in Hong Kong. Its objectives include:
- Enhancing Hong Kong’s position as a premier financial hub, promoting it as a secure and robust investment destination on the international stage.
- Regulating and overseeing the securities and futures markets in Hong Kong, ensuring transparency, fairness, and compliance among participants.
- Enforcing stringent compliance with financial laws, establishing and executing regulatory standards to uphold market integrity.
- Issuing licenses to financial entities and ensuring they adhere to the regulatory framework, as well as revoking licenses when compliance fails.
- Protecting investors through rigorous regulatory practices, managing a compensation fund to cover potential financial losses.
Taxation of Asset Management companies in Hong Kong
- There are no capital gains tax and no withholding tax on dividends, interest, and royalties
- A Global Business Category entity holding an Investment Dealer License benefits from a deemed tax credit, which results in a maximum effective tax rate of 3% on its tradable profits
Requirements for Asset Management licensing in Hong Kong
List of required documents
- CVs and Qualifications: Submission of CVs for shareholders and team members, along with qualification papers, demonstrating their expertise and suitability for the asset management industry.
- Compliance and Client Agreements: Preparation of compliance manuals and client agreements to ensure adherence to regulatory standards.
- Business Plan: A detailed document outlining the firm’s strategic vision, service descriptions, market analysis, and financial projections.
- Responsible Officer Forms: Completion and submission of forms for Responsible Officers, including supplemental documents to demonstrate compliance and suitability.
- Licensing Application: Filing of the official application form for the Type 9 license.
- Insurance Quotation: Documentation of adequate insurance coverage as a measure of risk management.
- Business Address Approval: Verification of a physical office in Hong Kong, confirming the operational base and compliance with local requirements.
Share Capital and Government Fees
- Minimum Share Capital: If not holding client assets: Minimum liquid capital of HK$100,000. If holding client assets: Minimum paid-up capital of HK$5,000,000 and minimum liquid capital of HK$3,000,000.
- Bank Account: Opening a local bank account in Mauritius is necessary for depositing share capital and handling transactions.
- Government Fees: The government processing, application, and registration fees for an Asset Management license in Hong Kong application fee for corporations HK$4,740 and application fees for individuals ranging from HK$1,790 to HK$2,950, depending on the role. Annual fees are applicable according to the licensing terms.
Personnel Requirements
- Responsible Officers: At least two individuals must be designated as Responsible Officers (ROs), with at least one serving as an executive director. It is mandatory to have one RO available at all times to supervise activities.
- Manager-in-Charge (MIC): Required to oversee major business functions including overall management oversight, key business line operations, operational control and review, risk management, finance and accounting, Information technology, compliance, anti-money laundering and counter-terrorist financing. One person can serve as MIC for multiple functions.
- Director: Appointment of a Director to ensure governance and compliance with regulatory frameworks. The Director should have proven leadership capabilities and a strong understanding of the asset management sector.
Business premises requirements
- Establishment of a mandated physical office in Hong Kong to accommodate staff, facilitate data storage, and reinforce the operational base, as required by the Securities and Futures Commission (SFC).
Legal services for obtaining Asset Management license in Hong Kong
Basic Package
45,000EUR initial set up
- Name reservation
- Company Incorporation
- Registering share capital
- Legal address for 1 year
- Corporate documents
- AML/KYC policies and other internal documents
- Search for business premises for rent
- Applying for the license and ongoing monitoring
Registration of the Forex Dealer licensed company under the minimum regulatory requirements
Additional services on request
- Business plan preparation according to Hong Kong Acts
- Adaptation of prepared documents
- Accounting services
- Preparation of legal opinion
- Assistance in opening bank account
- Setting up KYC/KYT provider
- Apostilled corporate documents
- Legal support
Ready-Made solution
available on request
- Registered company
- Legal address for 1 year
- No debts, no liabilities – clean company
- Registered share capital
- Active license
- Corporate documents
- Assistance with transfer of ownership
Jegor Kupratsevits
Head of Finance Projects
Overview of requirements to obtain Asset Management license in Hong Kong
- Incorporate under the Hong Kong Companies Act to ensure legal operation within the jurisdiction
- Appoint Responsible Officers (ROs), a Director, and a Manager-in-Charge (MIC) to maintain compliance and oversee key operational areas.
- Ensure that all team members, including ROs, the Director, and MIC, adhere to high standards of integrity and professional conduct.
- Establish a physical office in Hong Kong to support essential operations and reinforce the firm’s commitment to local compliance.
- Set up a corporate bank account as part of the financial arrangements to manage assets and transactions effectively
Estimated time frames to obtain Asset Management license in Hong Kong
Business name verification
1-5 days
Company formation
up to 2 weeks
Documents preparation
1 month
Investment license obtainment
4-6 months*
Roadmap of obtaining Asset Management license in Hong Kong
For more detailed road map of the project and commercial offer – get in touch with our Forex professional.
Jegor Kupratsevits
Head of Finance Projects
Preparation
Conducting due diligence in collaboration with stakeholders and preparing essential legal documents, business plans, and compliance manuals tailored to Hong Kong’s regulatory environment
Reviewing contracts and issue legal certifications, and compiling all necessary documents for submission to the Securities and Futures Commission (SFC).
HR Service of necessary local compliance team.
Offering options for assembling a high-caliber local compliance team with expertise in financial regulations and asset management.
Ensuring the compliance team meets the SFC’s stringent requirements for industry knowledge and regulatory expertise.
Submission
Submitting the complete application package to the SFC, and initiating the corporate bank account opening process aligned with regulatory requirements.
Following up with the necessary documentation to complete the bank account setup.
Follow up
Maintaining regular communication with the SFC to respond to inquiries and provide any additional information required.
Continuing the process to set up the corporate bank account, ensuring all regulatory documentation is finalized.
Approval
Receiving approval from the SFC and proceeding with company incorporation, convening the initial board meeting to formalize operational procedures.
Securing premises for the company’s operations, establishing a strong business presence in Hong Kong.
Bank account(s) Opening
Submitting SFC approval and the Certificate of Incorporation to the bank to proceed with account formalities.
Coordinating with the bank to finalize the opening of the corporate bank account, completing all necessary formalities.
Advantages of registration Asset Management company in Hong Kong
01
Hong Kong incorporation
is favored due to easier enforcement, record-keeping, financial reporting, and risk management considerations.
02
Market Access
One of the primary benefits is the ability to operate within Hong Kong’s vibrant financial market, renowned for its regulatory framework and international business environment.
03
Operational Flexibility
While holding a Type 9 license in Hong Kong, entities can also engage in related activities like dealing in securities, provided these are incidental to their main asset management function. This broadens the scope of services that can be offered under a single license.
04
Credibility and Trust
Obtaining a Type 9 license in Hong Kong, which requires meeting rigorous regulatory standards, enhances the credibility and trustworthiness of an asset management firm in the eyes of investors.
05
Marketing Flexibility
Having a Type 9 license enables firms to market their funds in Hong Kong, expanding their potential client base and investment opportunities.
Links for legislation related to Asset Management license in Hong Kong
Establishes the comprehensive legal framework for the securities and futures markets in Hong Kong, governing all regulated activities and defining the responsibilities of market participants.
Provides the legal basis for preventing and combating money laundering and terrorist financing in Hong Kong, outlining obligations for financial institutions in detecting and reporting related activities.
III. Companies Ordinance
Regulates the incorporation, operation, and dissolution of companies in Hong Kong, facilitating business and ensuring compliance with corporate governance standards.
Sets out the conduct requirements for managers of funds, ensuring ethical practices and compliance with regulatory standards in asset management.
Provides detailed guidelines to help financial institutions and other regulated entities meet their obligations under the AMLO, enhancing the effectiveness of the AML/CFT regime.
Outlines the procedures and requirements for obtaining and maintaining a license for conducting regulated activities under the SFO, serving as a comprehensive resource for potential and existing licensees.
Detail the criteria and procedures for assessing the suitability of individuals and corporations to hold a license or registration under the regulatory framework, ensuring they meet the necessary integrity and competence standards.
FAQ about Asset Management license in Hong Kong
1. Why choose Hong Kong for setting up your Asset Management firm?
Hong Kong is a globally recognized financial center in Asia. Obtaining a Type 9 license in Hong Kong provides a significant advantage and prestige to customers, establishing a strong presence in the Asian markets.
2. Who can apply for a Hong Kong Type 9 License?
Investment firms and individuals with relevant experience and qualifications in asset management are considered good candidates for the Type 9 License, reflecting Hong Kong's commitment to high standards in financial regulation.
3. How long does it take to get licensed by the SFC?
The licensing process with the Securities and Futures Commission (SFC) generally takes about 4-6 months, depending on the completeness of the application and the current workload of the SFC.
4. I have a license in another country; would it be useful?
Yes, holding a license from another jurisdiction is advantageous as it demonstrates compliance with high regulatory standards, potentially facilitating the licensing process in Hong Kong. For branches, details about the head office and its regulatory status must also be provided.
5. Should I establish an office in Hong Kong?
Yes, establishing a physical office in Hong Kong is necessary. It serves as a key base for keeping important documentation and provides a workplace for your staff. It is also required that at least one Responsible Officer (RO) is always available on-site for regulatory audits.
Each of our projects receives unique and tailored solutions in accordance with the initial objectives and vision of the shareholders.
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