New Open-ended Fund Company Regime Effective 30 July 2018

Published 11 July 2018 by Charltons

New Hong Kong Corporate Fund Regime to Take Effect 30 July 2018

Hong Kong’s new corporate fund regime allowing investment funds to incorporate as open-ended fund companies (OFCs), as an alternative to the currently permitted unit trust form, will take effect on 30 July 2018, subject to the legislative process.  Currently, a Hong Kong open-ended investment fund cannot be established in corporate form due to restrictions on capital reduction under the Companies Ordinance (Cap. 622) (the CO).  Internationally, however, corporate fund structures are more popular and are available in most international fund centres.  The introduction of the new open-ended fund company structure is thus aimed at encouraging more funds to domicile in Hong Kong and to boost Hong Kong's position as a full service international asset management centre.