Update: relocating a fund or investment platform

Fund managers and platform operators across the principal offshore and Middle Eastern centres are moving Hong Kong to the top of their relocation shortlist. The inward company re-domiciliation regime (Hong Kong's mechanism allowing an eligible non-Hong Kong company to migrate its legal seat to Hong Kong while preserving corporate identity) commenced in 2025, adding a structural option that was not available in earlier cycles. The immediate questions are sequencing, tax residence, and where management and control will genuinely sit once the move is complete.

Three triggers are converging. The re-domiciliation window is open and the rules are still being tested in practice – early movers have an advantage in terms of regulatory familiarity. The Pillar Two minimum top-up tax, effective for fiscal years beginning on or after 1 January 2025 for in-scope groups with consolidated revenue at or above EUR 750 million, is reshaping the cost of holding offshore. And the foreign-sourced income exemption regime under the Inland Revenue Ordinance, in force from 1 January 2023, now requires genuine economic substance – a requirement that a relocated fund platform is well-placed to satisfy if structured correctly from day one.

Who is affected across the corridor?

The relocation pressure is felt across several categories of operator. Fund managers currently domiciled in the Cayman Islands or the BVI and deploying capital into Greater China are the most immediate group. They face a combination of substance requirements in the offshore centre and evolving investor expectations on operational location. A Cayman-domiciled manager with a Hong Kong-based investment team already faces a management-and-control question: if decisions are made in Hong Kong, the offshore domicile may not hold for tax or regulatory purposes in every relevant system.

Family-office investment platforms structured through the UAE are a second group. The UAE's own tax and substance rules have changed materially in recent years, and the Hong Kong territorial tax system – profits tax at 8.25% on the first HK$2,000,000 of assessable profits and 16.5% above, with no capital gains tax and no withholding tax on dividends – remains a structurally different proposition. The absence of a forced-heirship regime and Hong Kong's common-law trust infrastructure add a succession dimension for principals with mixed asset bases.

European and Central Asian fund sponsors with Greater China portfolio exposure are a third category. For them, Hong Kong functions as both a regulatory hub and an enforcement platform: an award or judgment obtained in Hong Kong can engage the mutual-enforcement arrangements with Mainland courts that have been progressively strengthened since the Mainland Judgments Ordinance (the Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Ordinance, Cap. 645) took effect on 29 January 2024.

For a structured assessment of your fund or platform's relocation options across the relevant jurisdictions, write to us at info@lockhartyip.com. Our desk covers the full corridor: offshore centre to Hong Kong, UAE to Hong Kong, and European hub to Hong Kong.

What to do now

The sequencing of a fund or platform relocation to Hong Kong is where most transactions stall. The management-and-control test – the basis on which Hong Kong tax residence is typically established – must be satisfied from a defined point in time. That point is not the date of re-domiciliation or new incorporation. It is the date on which board decisions, investment committee meetings and day-to-day oversight genuinely occur in Hong Kong.

Operators who structure the entity first and relocate the decision-making later create a gap that regulators in multiple jurisdictions can exploit. The correct sequence runs in the other direction: establish the substance, demonstrate the management and control, then complete the formal migration. For fund platforms subject to licensing by the Securities and Futures Commission, the regulatory engagement must be mapped before, not alongside, the corporate restructuring. For stablecoin or virtual-asset platforms, the Hong Kong Monetary Authority's fiat-referenced stablecoin licensing regime – which commenced in 2025 – introduces an additional layer of pre-move diligence that operators should complete before committing to a timeline.

Three immediate actions follow from this position. First, assess where management and control currently sits and where it will sit after the move: the gap between the formal domicile and the operational reality is the primary audit and tax risk. Second, map the foreign-sourced income exemption position under the Inland Revenue Ordinance: the substance conditions for a relocated fund platform are specific and should be satisfied from the first day of operation in Hong Kong, not added retrospectively. Third, verify the current commencement date and eligibility conditions of the inward re-domiciliation regime before beginning any corporate restructuring steps – the rules are live but early practice is still developing.

Our practice covers each stage: capital relocation strategy, IP and intangible-asset positioning (see our analysis of relocating IP and intangible assets into Hong Kong), and specific corridor work including relocating a holding company from the UAE to Hong Kong. If an earlier filing, structure or re-domiciliation attempt produced an adverse or stalled result, a second read can identify the strategic error and the routes still open.

Frequently asked questions

How long does relocating a fund or investment platform to Hong Kong usually take?

The timeline depends on the starting structure, the licensing position and the corridor being used. Under the inward re-domiciliation regime, the corporate migration itself follows a defined statutory process – parties should verify the current timelines with allied counsel before committing to a schedule. Regulatory licensing by the Securities and Futures Commission runs on a separate track and typically adds several months to the overall project. A realistic planning period is measured in quarters, not weeks, once substance, tax residence and licensing requirements are included.

What are the main risks in relocating a fund or investment platform to Hong Kong?

The primary risk is a management-and-control gap: the formal domicile changes but genuine decision-making remains offshore, exposing the platform to tax and regulatory scrutiny in multiple systems simultaneously. A secondary risk is sequencing error – completing the corporate migration before satisfying the economic-substance conditions of the foreign-sourced income exemption regime, or before obtaining the required regulatory licences. In our cross-border practice, we regularly see platforms that have moved the entity but not the operational substance, creating a position that requires remediation under two or more legal systems.

What documents are needed for relocating a fund or investment platform to Hong Kong?

The documentary requirements vary by corridor and by whether the move proceeds by inward re-domiciliation or by establishing a new Hong Kong entity. Core materials typically include constitutional documents from the origin jurisdiction, board resolutions evidencing the decision to relocate, tax-residence certificates and substance-support documentation, and the investment management or fund-administration agreements that will underpin the Hong Kong operation. For licensed entities, regulatory approval documents from the origin regulator may also be required by the Securities and Futures Commission as part of the licensing application.

Speak with Lockhart & Yip

For a scoped view of your matter, contact info@lockhartyip.com. Discuss your matter →

This publication is general information and does not constitute legal advice. For advice on your situation, contact info@lockhartyip.com.

Update: relocating a fund or investment platform to Hong Kong

Who is affected across the corridor?

What to do now

Frequently asked questions

Speak with Lockhart & Yip

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