Hong Kong Considers Tax Exemption for Crypto Investment of Hedge Funds

"Hong Kong Financial Authorities in Talks for Six Weeks"
"Aim to Secure Competitive Advantage as Cryptocurrency Hub"

Hong Kong regulators are considering tax exemptions for cryptocurrency investments by hedge funds, private equity funds and family offices to strengthen their position as a cryptocurrency finance hub.

The Financial Times reported on Nov. 28 that Hong Kong's financial authorities are currently in talks for about six weeks to provide tax exemptions for private loans, overseas real estate, carbon credits and cryptocurrency investments by high-value investors with special investment types.

The consultation is a special initiative being undertaken by the Hong Kong financial authorities and aims to secure an edge in competition with financial hub competitors such as Singapore and Switzerland.

According to reports, Singapore has introduced a Variable Capital Company regulatory framework since 2020, and currently has more than 1,000 special funds that are making cryptocurrency investments in the region. On the other hand, Hong Kong has encouraged the operation of open fund companies (OFCs) since October last year, and about 450 funds have been released.

"Hong Kong is accelerating the cryptocurrency industry in the region by establishing a tax-free and cryptocurrency licensing system," said cryptocurrency analyst Justin d'Anethan.

권승원 기자 ksw@blockstreet.co.kr