Future-Proofing Family Wealth in Hong Kong

For Sanjay Kothari, Vice Chairman of KGK Group, Hong Kong is the perfect location to grow his family’s 119-year-old business.

The fourth generation of his family to run KGK—a mines-to-brands enterprise in the gems and jewelry industry that was founded in Jaipur, India in 1905 and relocated to Hong Kong in 1962—Kothari moved to the city in 1990, driven by a strategic vision to strengthen the group's presence in Asia's key markets.

KGK has since grown into a global conglomerate with a diverse portfolio that includes gemstone mining, diamond processing, jewelry manufacturing and retail, and real estate.

“We established our base in Hong Kong because of the city’s strategic position in the heart of Asia, ease of doing business, and high quality of life,” says Kothari. “The city also boasts a highly skilled and accessible workforce, making it easy to find the right talent to drive growth.”

Why Hong Kong makes sense for family businesses

Ensuring that family businesses like the KGK Group flourish across generations requires careful management across a number of areas, including wealth preservation and growth, succession planning, taxation, governance and conflict resolution, and philanthropy.

Family offices play a critical role in support of ultra-high-net-worth clients and their family businesses by offering a wide range of tailored financial services. These include tax advice; investment planning, including shifting focus from immediate profits to a longer term perspective shaped by sustainability, innovation, and legacy building; estate planning; technology integration and data protection; support for philanthropic activities; and lifestyle management—which includes travel planning and making schooling arrangements.

Hong Kong has emerged as a premier destination for family offices for several reasons. A leading international financial center—Hong Kong ranked first in Asia and third globally in the 2024 Global Financial Centres Index (GFCI),^[1] an annual gauge of financial competitiveness—and provides family offices with access to mature capital markets and a diverse range of investment opportunities. And with around 80 of the world’s 100 largest banks and 70 of the top 100 global asset managers,^[2] Hong Kong offers family offices access to unrivaled financial talent and expertise.

Hong Kong is also lauded for its business-friendly environment, which is due to the absence of capital controls; its minimum tax regime, with no sales tax, investment withholding tax, capital gains tax, or estate tax; its transparent legal system, with strong investor protections; its currency pegged to the US dollar; and its common law legal system, based on English law.

“The city’s legal structure ensures that our investments are secure, while the streamlined regulatory environment enables us to manage wealth efficiently,” says KGK’s Kothari.

How Hong Kong’s government is fully invested

Family offices are a priority for the Hong Kong government, and it has introduced a raft of measures to attract more wealthy families and individuals. This includes a revamped investment migration scheme^[3] that enables foreign asset owners to reside and invest in the city, and new tax concessions for family owned investment vehicles.

Charles Ng, Associate Director-General of Invest Hong Kong (InvestHK), the government agency responsible for foreign direct investment, recently traveled to Europe to promote Hong Kong as the leading Asia-Pacific hub for family offices. He says many of the families he met with are keen to diversify their investments, and view Hong Kong as an attractive destination for a second family office that will enable them to tap into Asia’s biggest growth opportunities. For instance, the Greater Bay Area (GBA), which includes Hong Kong, Macau, and nine mainland Chinese cities, has a population of more than 86 million people and a combined GDP of $2 trillion.^[4]

“This is a huge opportunity that will only get bigger. The GDP of the GBA, which is currently about the size of Italy’s, is forecast to double in the next 10 years,” says Ng. “As a result, the Hong Kong government has made it easier for family offices and other high-net-worth investors based in the city to access this cross-border opportunity.

A city in constant motion

While Hong Kong's robust financial infrastructure, strategic location, and supportive government policies underpin its longstanding reputation as a world-class destination for family offices, Kothari believes the city’s real star power is that it never stands still and there are always new opportunities.

“I value Hong Kong’s dynamic environment, which has supported our business expansion and family life,” he says. “The city’s ability to continuously evolve, particularly through its focus on innovation and its integration with the GBA, keeps it at the forefront of global development. This adaptability ensures that the city remains a compelling destination for both business and personal endeavors.”

Sources:

[1] Government of Hong Kong [2] Ocorian [3] New CIES [4] HSBC