Family offices of the future: Hong Kong’s new economic ecosystem
The alliance between family offices and innovative start-ups paints a promising picture of the city’s dynamic investment landscape
Wealth preservation is the core function of many family offices. Indeed, more than a few ultra-high-net-worth (UHNW) families – defined as having a net worth of at least US$30 million – favour a relatively conservative approach in their asset allocation and portfolio construction.
However, for the more than 2,700 single-family offices already operating in Hong Kong, there are alternative routes to building a portfolio that will not only preserve their wealth, but increase it over time.
By adjusting their focus, family offices can take full advantage of the extensive and diverse range of investment opportunities Hong Kong offers, such as start-up funding and digital assets.
Here, Hong Kong has much to offer. The city’s traditional advantages – its tax policies, its strategic location within the Greater Bay Area (GBA) and its long-standing reputation as a trusted legal and financial hub – are well known. However, when considering the establishment of family offices, a key consideration is the city’s unparalleled support for entrepreneurial talent.
The Hong Kong government has committed more than HK$100 billion to innovation and technology development by funding support for infrastructure, research and development, talent pooling, enterprises, business upgrading, re-industrialisation and fintech.
Hong Kong hosted 4,694 start-ups last year, an increase of 10 per cent from the previous year – and 40 per cent more than in 2020. The leading industry continues to be fintech, followed by information, computer and technology, with health and medical, sustainable and green technology, and biotechnology, an emerging component in the life sciences, also performing well.
One of the critical factors in establishing Hong Kong as Asia’s tech hub is the city’s strong network of incubators, accelerators and an ever-expanding cohort of angel investors and venture capitalists.
“For us, Hong Kong serves as a dynamic hub for venture capital and start-ups, offering nurturing opportunities for innovative businesses,” says Sanjay Kothari, vice-chairman of KGK Group, a global name in the gems and jewellery sector. “As a gateway to global capital markets, the city allows us to tap into significant investment pools, opening doors to new business prospects and long-term financial growth.”
“Hong Kong’s framework and its legal and financial systems have provided us with effective tools for structuring inheritance and succession planning,” Kothari says. “This allows us to maintain the integrity of our family’s business and assets while fostering future growth. The city’s ability to continuously evolve, particularly through its focus on innovation and its integration with the GBA, will keep it at the forefront of global development.”
Certainly, Hong Kong’s strategic location as a gateway to the GBA is one of its key strengths. In its Global Innovation Index 2024, the World Intellectual Property Organization ranked the Shenzhen-Hong Kong-Guangzhou technology cluster second globally for the fifth consecutive year, a measure of how the region excels in both research paper publications and patent applications.
Hong Kong’s commitment to excellence and innovation is also driving the advance of digital assets. The government has already put in place a licensing regime for trading platforms with clear conditions and due diligence for virtual asset products.
The city intends to strengthen its digital asset exchanges as it seeks to develop its digital trading ecosystem and become a hub for new fintech innovation and virtual-asset financial services. The Securities and Futures Commission approved five licences last year and three licences in 2025, bringing the total number of licenced virtual asset firms to 10. Further innovation is in the pipeline with legislation for stablecoin, greater adoption of blockchain, a regulatory framework for over-the-counter trading of digital assets and responsible applications of AI in the financial services industry.
Indeed, Hong Kong is already well on the way to establishing itself as an international fintech hub. In 2023, the city was home to around 1,100 fintech companies, covering a range of industries, including digital assets, cryptocurrency and blockchain applications.
“The open economy and business-friendly policies allow for diverse investment opportunities, and the proximity to mainland China has given us an advantage in terms of market access,” Kothari says. “Our decision to establish our base in Hong Kong was influenced by the city’s strategic position, ease of doing business and high quality of life.”
Indeed, the appeal of Hong Kong for family offices is about more than financial returns, it is also about the standard of living. The city is home to top-ranked universities, more than 50 international schools, cosmopolitan surroundings, multicultural dining options and a welcoming international community, set against a scenic backdrop of rolling mountains, country parks and pristine beaches.