Introduction: The Shift in Offshore Structuring
For over two decades, entrepreneurs, investors, and family offices have widely utilized offshore jurisdictions like BVI, Cayman Islands and Bermuda etc to structure their corporate holdings, investment vehicles, and trusts. These structures offered simplicity, privacy, and tax optimization. However, recent international tax reforms and increased compliance obligations have dramatically changed the offshore landscape.
The Organisation for Economic Co-operation and Development (OECD)’s introduction of the 15% global minimum tax (Pillar Two), tighter economic substance requirements, and the Common Reporting Standard (CRS) for financial account transparency have substantially diminished the advantages previously enjoyed by a lot offshore jurisdictions (particular in jurisdictions where there is no or very low tax). Consequently, many international and Hong Kong-based family offices and corporate investors now seek more sustainable, compliant, and transparent structures.
Recognizing these global shifts, Hong Kong recently enacted a significant amendment—the Companies (Amendment)(No.2) Ordinance 2024—which became effective on May 23, 2025, establishing a statutory re-domiciliation mechanism.
Understanding the New Hong Kong Re-domiciliation Law
The new mechanism allows companies incorporated outside Hong Kong to migrate their place of incorporation directly to Hong Kong without dissolving the original company or creating a new legal entity. This process ensures that the re-domiciled company:
- Maintains continuous corporate identity and legal existence.
- Retains ownership of assets, liabilities, and existing contractual relationships.
- Benefits from Hong Kong’s favorable taxation treaties and regulatory environment.
- Avoids the complex processes of asset transfers, contract re-negotiations, or trust restructuring.
Companies applying for re-domiciliation must satisfy Hong Kong authorities regarding corporate governance, solvency, and legitimate business purposes. The company must also deregister from its original jurisdiction within 120 days of obtaining Hong Kong registration (extensions may be granted).
Why Introduce this Law Now?
Hong Kong’s new law addresses several critical factors:
- Global tax reform pressures: Complying with OECD’s BEPS 2.0, particularly Pillar Two, requires jurisdictions to ensure businesses meet global tax standards.
- Increasing compliance cost and complexity in offshore jurisdictions: Increasingly stringent economic substance and regulatory requirements in jurisdictions like BVI and Cayman have escalated administrative complexity and compliance costs.
- Enhancing Hong Kong’s competitiveness: By simplifying the relocation of offshore companies, Hong Kong strengthens its position as an attractive regional hub for investment and wealth management.
- Reducing structural inefficiencies: This law facilitates seamless transitions, mitigating risks associated with restructuring offshore entities.
Strategic Benefits for Corporate Clients and Family Offices
Family Offices and Trust Structures
Family offices structured around trusts using BVI or Cayman entities can now seamlessly transfer holding companies to Hong Kong, offering:
- Enhanced legal stability and clearer regulatory oversight.
- Improved access to Hong Kong’s double taxation treaties, particularly beneficial for investments in mainland China and Asia-Pacific.
- A simpler [and more transparent] ongoing compliance regime compared to traditional offshore jurisdictions.
Corporate Holding Companies
Corporations that currently utilize offshore entities for international holdings, financing arrangements, or intellectual property management may significantly benefit by:
- Streamlining corporate structures, thereby reducing administrative burdens and operating costs.
- Improving access to international banking services and credit facilities due to Hong Kong’s robust financial infrastructure.
- Enhancing credibility and investor confidence by situating in a globally respected jurisdiction.
Investment Funds and Private Investment Vehicles
Fund managers and investment vehicles operating in offshore locations can utilize this new re-domiciliation framework to:
- Benefit from Hong Kong’s favorable tax regime for family investment holding vehicles (FIHV), potentially qualifying for a 0% profits tax rate on qualifying investments.
- Facilitate direct access to Asian markets and enhanced liquidity through Hong Kong’s developed financial and capital markets.
- Leverage Hong Kong’s regulatory recognition, easing client onboarding and investor relations.
How Our Firm Can Assist: A Trusted Partner in Transition
With over 60 years of deep-rooted history in Hong Kong as a professional CPA firm and a licensed trust and corporate service provider, we specialize in structuring tailored solutions for corporate and private clients. Our seasoned professionals have extensive experience serving international and Asian family offices and businesses.
We offer comprehensive advisory and execution services, including:
- Strategic consultation: Detailed evaluation of your existing offshore structure, identifying suitability for re-domiciliation.
- Regulatory coordination: End-to-end management of the re-domiciliation application process, including deregistration from the current jurisdiction.
- Tax planning: Ensuring optimal tax efficiency through careful structuring and utilization of Hong Kong’s extensive tax treaty network and preferential local tax treatment.
- Trust and family governance integration: Seamless transition ensuring no disruption to trust or estate planning arrangements.
- Ongoing compliance management: Post-transition support to ensure continual regulatory compliance, accounting, auditing, and governance alignment.
Conclusion: Proactively Adapting to Global Change
The introduction of Hong Kong’s re-domiciliation law is a timely and strategic move aligned with global regulatory trends. It offers corporate entities and family offices a practical, compliant, and efficient route to adapt proactively, secure their legacy structures, and position strategically for the future.
We encourage corporate and family office clients to proactively explore this opportunity. Early planning and professional guidance will ensure a smooth transition, maintaining structural integrity and enhancing future-proof compliance and tax efficiency.
Please contact us directly for a confidential consultation to discuss how Hong Kong’s re-domiciliation regime can specifically benefit your corporate or family structure.