Financial leaders tiptoe around Beijing’s asset scrutiny, hail Hong Kong’s wealth boom

Global financial leaders who gathered in Hong Kong this week largely sidestepped Beijing’s offshore trust tax crackdown, a lingering near-term hurdle for the city’s otherwise expanding wealth management industry.

Beijing’s move earlier this year to step up scrutiny of wealthy families’ overseas assets was barely discussed openly at a series of financial industry events, including the Global Financial Leaders’ Investment Summit and the PWMA Wealth Management Industry Summit 2026, even as it remains a thorny issue for cross-border wealth management.

Industry heavyweights instead focused on the city’s appeal as an alternative safe haven amid global market volatility and its growing strength as a cross-border wealth hub.

Hong Kong had seen “continued momentum” in wealth management, helped by a record year for assets under management and a surge in net inflows, according to a report released on Thursday by the Private Wealth Management Association (PWMA) and KPMG China. The survey covered most of the association’s 44 institutional members.

Total private wealth assets under management in Hong Kong reached HK$12.9 trillion (US$1.65 trillion), up 24 per cent from a year earlier and “comfortably surpassing” the previous peak of HK$11.3 trillion in 2020.

The sector, however, faced a more complex operating environment amid geopolitical tensions and an evolving cross-border tax and regulatory landscape, the report said.

“Greater tax transparency” and “more rigorous reporting requirements” were increasing the complexity of cross-border wealth arrangements in the short term, the report said, citing respondents.

China’s Ministry of Finance said in July that the country’s 20 per cent personal income tax rate applied to investment gains from offshore trusts, raising concerns about Hong Kong’s role as a wealth destination for affluent mainland Chinese investors.

As evolving cross-border tax regimes in Europe forced wealthy families to “step up their game”, awareness was also “growing substantially” in Asia, said Marc-Andre Sola, founder and chairman of financial services and insurance brokerage firm 1291 Group, during a panel discussion at the PWMA summit on Thursday.

Chinese regulators were taking steps to ensure clarity on taxation by defining what worked from a tax point of view and what did not work, meaning structures that had been used did not work any more and leaving “a lot of room to restructure”, he said.

Still, experts have previously argued that clearer offshore trust taxation rules that eliminate grey-area practices would enhance the long-term credibility of Hong Kong’s trust industry.

Greater tax transparency could “strengthen confidence in Hong Kong over time”, according to the PWMA report.