On 24 February 2021, Hong Kong’s Financial Secretary Paul Chan delivered the 2021-22 Budget speech, among other things granting subsidies for open-ended fund companies (“OFCs”) to set up in or re-domicile in Hong Kong and for Real Estate Investment Trusts (the “REITs”) to list in Hong Kong (the “Grant Scheme”). The Securities and Futures Commission (the “SFC”) announced today the launch and implementation of the Grant Scheme.
The table below summarizes the details of the Grant Scheme:-
|From 10 May 2021 to 9 May 2024|
|Eligible applicants||OFCs successfully incorporated in or re-domiciled to Hong Kong on or after 10 May 2021||SFC-authorised REITs successfully listed on the Stock Exchange of Hong Kong Limited|
|Grant amount||70% of the eligible expenses for each application, subject to a cap of $1 million per OFC and a maximum of three OFCs per investment manager||70% of the eligible expenses for each application, subject to a cap of $8 million per REIT|
|Eligible expenses||Eligible expenses must be paid to Hong Kong-based service providers in relation to the incorporation of an OFC, or re-domiciliation of a non-Hong Kong fund corporation to Hong Kong as an OFC
Examples include fees charged by legal advisers for legal work, auditors, tax advisors and fund administrators in relation to the incorporation and re-domiciliation of the OFC
|Eligible expenses must be paid to Hong Kong-based service providers in relation to the listing of the REIT
Examples include underwriting commissions charged by underwriters for the listing of the REIT, fees charged by legal advisers for legal work, auditors, tax advisors in relation to the listing of a REIT, or fees charged by the valuer of a REIT to produce valuation report on the REIT’s properties
|Minimum operation condition||The Government reserves the right to claw back the grant if the OFC commences winding-up or applies for termination of registration within two years from the date of its incorporation or re-domiciliation||The Government reserves the right to claw back the grant if the REIT is delisted or suspended from trading within two years of its listing date|
|Application process||Submit a formal application to the SFC within three months enclosing the following:-
· The date of the certificate of incorporation or re-domiciliation issued by the Companies Registry for private OFCs; or
· The authorization date, duly signed and completed and the form titled “Public OFC – Confirmation of Intention to Apply for a Grant under the Grant Scheme for Open-ended Fund Companies” for public OFCs
Submit a formal application to the SFC within three months from the listing date of the REIT.
Contact us today if you would like to find out more about the Grant Scheme or if you would like assistance applying for the Grant Scheme.