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Hong Kong

The return of wealth flows

Hong Kong’s recovery is the most surprising development in the competitive field. Between 2019 and 2022 the city lived through mass protests, the National Security Law of June 2020, some of the strictest pandemic restrictions in the world and the departure of a significant part of its expatriate population. Many observers concluded that Singapore would inherit Hong Kong’s role as Asia’s leading international financial centre. Four years later, Hong Kong has overtaken Switzerland as the largest booking centre for cross-border wealth, regained the top position among the world’s listing venues and ranked third in the GFCI, just ahead of Singapore. The explanation lies almost entirely in its relationship with mainland China. More than 60 per cent of the cross-border wealth booked in Hong Kong originates from the mainland, and the city’s growth depends on the willingness of Chinese entrepreneurs and families to hold assets outside the mainland but within the reach of Chinese law and Chinese politics.1

The stock market has followed the same pattern. After three weak years, HKEX raised about USD 37.4 billion in initial public offerings in 2025, an increase of more than 230 per cent over the previous year and more than the combined total of the three preceding years. Chinese companies dominated the listings, many of them already listed in Shanghai or Shenzhen and seeking a second listing in Hong Kong to access international investors.2 Equity turnover almost doubled in the same year, and southbound trading through Stock Connect, the channel through which mainland investors buy Hong Kong shares, grew by about 150 per cent.3

Mainland connectivity and family office incentives

The Hong Kong government and its regulators have built a set of channels that connect the city’s financial markets with the mainland. Stock Connect and Bond Connect link the exchanges, while the Cross-boundary Wealth Management Connect scheme allows residents of the Guangdong–Hong Kong–Macao Greater Bay Area to invest in wealth management products across the border. The scheme was enhanced in early 2024, when the People’s Bank of China published revised implementation rules that opened it to licensed securities firms, widened the range of eligible products and updated the eligibility criteria for investors.4 No Western centre can offer comparable access to Chinese savers. For Swiss banks, which operate some of their largest Asian booking platforms in Hong Kong, the channels are an opportunity as much as a threat, because they allow them to serve mainland clients from Hong Kong without competing from Zurich.

Hong Kong has also imitated and in some respects surpassed Singapore’s approach to family offices. Since 2023 it has granted a profits tax concession of zero per cent for eligible transactions of single family offices, subject to a minimum of assets under management. A study commissioned by the government from Deloitte counted 3,384 single family offices at the end of 2025, an increase of more than 25 per cent in two years. According to the Deloitte authors, many of the new entrants came from mainland China, with growing interest from the Middle East and other Asian countries. They emphasised that Hong Kong, unlike Singapore, imposes neither local investment targets nor an approval requirement as a condition of the tax concession.5 The New Capital Investment Entrant Scheme, launched in March 2024, adds a residence route for investors who place at least HK$30 million in eligible Hong Kong assets. By the end of April 2025 it had received 1,257 applications, with expected investment of more than HK$37 billion.6

In the field of crypto-assets and Digital Assets, Hong Kong has chosen an active licensing strategy. The Stablecoins Ordinance, in force since 1 August 2025, requires issuers of stablecoins referenced to fiat currencies to obtain a licence from the Hong Kong Monetary Authority (HKMA), to hold paid-up capital of at least HK$25 million, to back their tokens fully with reserve assets and to redeem them at par within one business day.7 Part J of this volume describes the Swiss approach, which relies on the technology-neutral DLT Act of 2021 and the supervisory practice of FINMA. Both centres compete for the same issuers and custodians, and both face competition from Dubai and Abu Dhabi, which have built dedicated regulators for virtual assets.

The debate on legal certainty

Hong Kong’s return has not ended the debate about its legal order. The Basic Law guarantees the common law and an independent judiciary, and the Court of Final Appeal continues to sit with non-permanent judges from other common law jurisdictions. Yet the National Security Law of 2020 and the Safeguarding National Security Ordinance adopted under Article 23 of the Basic Law in March 2024 have changed the perception of the city among Western lawyers and investors. In March 2022 Lord Reed and Lord Hodge, the President and Deputy President of the Supreme Court of the United Kingdom, withdrew from the Court of Final Appeal. Lord Reed stated that the judges could not continue to sit in Hong Kong without appearing to endorse an administration which had departed from values of political freedom. In June 2024 Lord Collins of Mapesbury and Lord Sumption followed, the former explaining his resignation by reference to the political situation in Hong Kong.8

Commercial practitioners generally regard the Hong Kong courts as competent and independent when they decide contract and company disputes. International clients nevertheless ask a different question. They want to know whether assets held in Hong Kong would remain safe in a conflict between China and the West, whether sanctions or countermeasures could reach them and whether the final word on the interpretation of the Basic Law, which lies with the Standing Committee of the National People’s Congress, could be used against them.9 For mainland Chinese clients, this question has a different weight than for Western or Middle Eastern clients, since they already live under Chinese law. For all others it is a reason to diversify. This is where Zurich finds its role in the Asian market: as a second booking centre for Asian families who hold a first account in Hong Kong or Singapore and want part of their wealth in a neutral jurisdiction far from the geopolitical fault lines of the Pacific.

Notes

  1. finews.asia, “Global Wealth Report: Hong Kong Overtakes Switzerland” (n. above). ↩
  2. 3E Accounting Hong Kong, “Hong Kong Leads Global IPOs in 2025 with US$37.4 Billion Raised” (n. above). Six of these secondary listings of mainland companies raised more than USD 1 billion each. ↩
  3. Finance Magnates, “HKEX Regains ‘Top Global Listing Spot,’ Equity Turnover Nearly Doubles in 2025”, 26 February 2026, https://www.financemagnates.com/forex/hkex-regains-top-global-listing-spot-equity-turnover-nearly-doubles-in-2025/. HKEX reported a net profit of HK$17.7 billion for 2025, an increase of 36 per cent. ↩
  4. PwC China, “Enhancements to the Cross-Boundary Wealth Management Connect”, February 2024, https://www.pwccn.com/en/industries/financial-services/banking-and-capital-markets/publications/enhancements-to-cross-boundary-bcm-feb2024.html. The revised rules were published on 24 January 2024. ↩
  5. Caixin Global, “Hong Kong family offices exceed 3,380 as tax incentives attract wealth”, 11 February 2026, https://www.caixinglobal.com/2026-02-11/hong-kong-family-offices-exceed-3380-as-tax-incentives-attract-wealth-102413422.html. The study estimates that single family offices employ more than 10,000 professionals and spend HK$12.6 billion a year in the city. ↩
  6. Hong Kong Government, press release on the New Capital Investment Entrant Scheme, 25 May 2025, https://www.info.gov.hk/gia/general/202505/25/P2025052400034.htm. Of the capital deployed by approved applicants, 36.4 per cent went into SFC-authorised funds and 28.1 per cent into equities. ↩
  7. Davis Polk, “Hong Kong’s licensing and regulatory framework for stablecoins now in effect”, August 2025, https://www.davispolk.com/insights/client-update/hong-kongs-licensing-and-regulatory-framework-stablecoins-now-effect. ↩
  8. Global Legal Post, “Two retired UK judges resign from Hong Kong’s top court”, June 2024, https://www.globallegalpost.com/news/two-retired-uk-judges-resign-from-hong-kongs-top-court-2115075310. Chief Justice Andrew Cheung responded that the court remained committed to the rule of law and judicial independence and that twelve non-permanent judges from common law jurisdictions remained. ↩
  9. Basic Law of the Hong Kong Special Administrative Region, Article 158, https://www.basiclaw.gov.hk/en/basiclaw/chapter8.html. The Standing Committee authorises the Hong Kong courts to interpret on their own the provisions that lie within the limits of the autonomy of the Region. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of September 2025.

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