In offering private wealth management to families with ultra-high-net-worth individuals, the family office’s main functions include not only investment and financial management but also inheritance management and governance, and any other family affairs, ranging from organising meetings to bill payments. Given the potential in mainland China and the rest of the world, family offices have gained importance in enhancing Hong Kong’s competitive edge as a financial centre (“ Hong Kong’s family wealth managers poised to tap bay area growth ”, September 14). Hong Kong’s mature financial markets, sound legal framework and ample supply of highly skilled labour create favourable conditions for family offices to set up in the city. Its role in the Greater Bay Area , where there is a concentration of wealthy families, also makes it an attractive investment gateway into or out of the mainland for super-wealthy families. According to the Hurun Wealth Report 2019, about 20,000 ultra-rich families that accounted for around fifth of the total were based in the Greater Bay Area. To facilitate the development of family offices in Hong Kong, the government should clarify any ambiguous regulatory requirements and tax considerations. According to the Securities and Futures Commission (SFC), there is no specific licensing regime for family offices for now. Under the Securities and Futures Ordinance, a type 9 licence is required for asset management, but not all family offices have this licence. It depends on the family office’s legal structure – whether the trustee appointed by the family operates the family office as an internal unit, whether the family office is wholly owned by the trustee or the family, etc. Such an approach causes confusion. Also, the government, which does not tax individual capital gains or personal investment income, collects a profits tax on investment income from corporate entities such as personal investment companies, a common vehicle for family offices. The disincentivises the establishment of the family office. As mentioned, although family offices can operate with or without SFC licences , the tax exemption regimes do not necessarily cover those without such a licence. And even for those with SFC licences, an anti-avoidance provision is in place to tax back the shareholders who hold more than 30 per cent interest in a family office, which can hinder their development. Therefore, the government should align family office regulations and expand the relevant tax exemption regimes accordingly. Kenneth Ho, Tin Shui Wai; and Louis Yim, Shau Kei Wan