In an effort to become more competitive with other financial centers, the government of Hong Kong says it will lift a 17.5% profit tax on offshore funds by the end of March. Investors Offshore reports that the move will be a “big attraction” to prospective foreign managers, who currently manage three out of five funds in Hong Kong.
Hong Kong government officials say the loss of revenue from eliminating the tax will be minimal as the Treasury has had problems getting transactional information from non-resident investors in order to collect the levy.