Developing Hong Kong as the charity hub of the world: It's not just about money, but educating on the essence of philanthropy

The Hong Kong government is keen to develop the city into a leading charitable hub, coordinating philanthropic funds from global family offices and philanthropists, with beneficiaries in Hong Kong, mainland China, and across the globe. However, a number of challenges remain, including the absence of specific legislation governing charitable organisations, the lack of a single regulatory body, and limited transparency in information disclosure. Furthermore, the types of recognised charitable donations and tax deductions are restricted. Industry experts believe the authorities should set out a clearer vision and strategy, offer more incentives and case studies, and emphasise that charity is not just about money—it’s also about educating the public on the essence of philanthropy.  

Hong Kong has a rich charitable tradition, with organisations like Tung Wah Group of Hospitals, Po Leung Kuk, and Lok Sin Tong founded in the 1870s and still serving the community today. According to figures from the 2022/23 fiscal year, 10,042 charitable organisations were granted tax-exempt status by the tax authority. Donations from individuals and businesses to these tax-exempt charities rose from HKD 11.8 billion in 2020/21 to HKD 14.3 billion in 2021/22. This HKD 2.5 billion increase in tax-exempt donations indicates broad public support for charitable causes. 

Chan Mei Yong, Head of Charitable Advisory and Philanthropy at HSBC Global Private Banking in Asia-Pacific, describes Hong Kong as having a “charitable gene.” Family offices are increasingly becoming platforms for managing family wealth, with many established family foundations actively involved in philanthropic giving. 

Professor Penny Pang, Director of the Asian Family Business and Family Office Research Centre at the Hong Kong University of Science and Technology, estimates that conservatively over a third of tax-exempt charities are family-owned. She notes that, following Japan, Hong Kong has the highest number of longstanding family businesses in Asia, which have been accumulating wealth and engaging in philanthropy over time. 

To boost competitiveness, she believes these families focus not only on wealth and business succession but also on values—particularly “altruism” over “self-interest.” “Sustainable development comes from sharing prosperity with the world through charity and impact investing,” she says, suggesting that consolidating Hong Kong’s position as a charitable hub would attract more family offices to the city. 

Luo Chai-wan, Chair of the Executive Committee of the Private Wealth Management Association, notes that Hong Kong has helped many wealthy families manage cross-generational charitable efforts and offers a comprehensive range of financial products. Serving as a “super connector” between mainland China and the world, it can adopt a “hybrid finance” model for philanthropic work to enhance its competitiveness. 

In March of 2023, the government issued a policy statement on developing family office businesses in Hong Kong. By May 2024, Invest Hong Kong had helped 89 family offices establish or expand their presence in the city, with over 130 more expressing plans to develop operations locally. Deloitte’s “Hong Kong Family Office Market Research” estimated that, by the end of last year, there were 2,703 single-family offices in Hong Kong. The total number is even higher when including multi-family offices and embedded family offices. 

Karen Cheung, Director of Business Development at Equiom in APAC and an independent trustee, noted that most family offices being set up in Hong Kong are established by high-net-worth individuals from the mainland. Currently, their primary focus is on investment and profit-making, while interest in philanthropy is still maturing. She stressed that transparency must be prioritised to develop Hong Kong into an international charitable centre. 

Lawyers Chan Lin-ki and Huang Hsiu-shan noted the current absence of specific laws or a single regulatory body overseeing charitable organisations in Hong Kong. Nor is there a legal definition of “charitable organisation.” They propose gradually enhancing regulation, establishing a legal definition for charitable organisations to improve accountability and transparency, and thereby boost donors’ confidence that their contributions are effectively utilised. 

According to records, the Hong Kong Law Reform Commission recommended setting up a Charitable Affairs Committee as a regulatory body as early as 2011. At present, non-profit organisations or charities typically obtain tax-exempt status through Section 88 of the Inland Revenue Ordinance or register as companies or societies with the Companies Registry or the Police Department. Regulation depends on the nature and activities of each organisation—temples, for example, are regulated by the Home Affairs Bureau, and educational charities by the Education Bureau. 

Professor Koo Yuk-fai, Director of the Family Business Research Centre at CUHK, pointed out that Hong Kong’s lack of a unified legal and regulatory framework hinders effective oversight of the increasingly diverse range of charitable activities, especially those involving impact investing that may generate profit. He added that reporting and disclosure requirements are relatively low. Improvements in this area—such as introducing third-party ratings and promoting transparency—could encourage more donations. 

Currently, tax-deductible charitable donations in Hong Kong are limited to cash contributions, capped at 35% of assessable profits. In contrast, Singapore, which also aims to be a regional philanthropic hub, amended its legislation in July 2023 to allow tax exemptions for donations to overseas charitable projects and a 250% tax deduction for local charity donations. The Hong Kong Financial Services Development Council has previously recommended removing or adjusting the cap on recognised charitable donations and expanding the scope to include non-monetary contributions. 

Chan Mei Yong noted that many family offices and private donors hold extensive art collections. The proposed changes could encourage donations to museums, accelerating Hong Kong’s development as a cultural and artistic hub. However, she pointed out that further work is needed to clarify how donated items should be valued, which items are eligible, applicable tax incentives, and the capacity of recipient institutions to manage such donations. 

She hopes that the definition of “charitable purposes” in Hong Kong can be modernised to reflect contemporary global challenges such as climate change, food security, and public health. She added that today’s philanthropists are proactively driving change through blended financing, co-funding research and advocacy, or pooling resources from other philanthropists, NGOs, and governments to address environmental issues in the Asia-Pacific. “Concessional capital and interest-free loans are key elements of blended finance, but a clear framework is currently lacking, impeding its development. The role of social enterprises also warrants further discussion.” 

Although the government has publicly stated its intention to make Hong Kong a charitable hub, Professor Koo noted that many local foundations feel insufficiently consulted and have yet to see clear, actionable plans from the authorities on how resources will be effectively deployed to generate social impact. “Charity is not just about money; it’s also about educating the public on the nature of philanthropy. We must move beyond utilitarian thinking and focus on the underlying purpose of giving, adopting a long-term, holistic approach.” 

Chan Wai-yan, Founder and Chief Investment Officer of Day Capital, also criticised the government’s vague rhetoric and called for more tangible incentives. “Otherwise, why would foreign philanthropists choose Hong Kong?” He emphasised the need to create a comprehensive ecosystem—identifying the motivations and benefits for families to carry out charitable work in Hong Kong. 

He proposed active cross-sector collaboration, such as inviting global universities with large numbers of Asian graduates to set up charitable funds in Hong Kong, then partnering with local family offices to create scholarship programmes. Graduates could donate through Hong Kong, and if they own businesses there, they could also enjoy tax benefits. 

The Hong Kong Wealth Legacy Institute and Invest Hong Kong recently co-hosted a private event attended by over 100 representatives of single-family offices from Hong Kong, mainland China, and abroad. 

To become an international philanthropic hub, Hong Kong must better promote its advantages and improve cross-border donation mechanisms. 

Yip Wai-man, Deputy Chairman of Deloitte China, hopes the government will enhance its international promotion of Hong Kong’s strengths: “Hong Kong has no foreign exchange controls, is a free port, and profits generated by family office investments can be tax-exempt—enabling flexibility in charitable activities both locally and globally.” Feng Wenshan, Partner-in-Charge of Deloitte China’s South China Consulting Business, also suggested encouraging small and medium-sized family offices to establish charitable funds, as they tend to have stricter governance and project oversight. 

Professor Koo reiterated that improving cross-border donation channels is key to encouraging more families to set up foundations in Hong Kong. He noted that mainland authorities have tightened regulations on overseas donations in recent years, and some private bankers and foundations report that the process for transferring charitable support from Hong Kong to the mainland is complicated and limited. “For instance, there’s no formal process for supporting water quality research related to Greater Bay Area cooperation, which hinders collaboration.” 

He cited industry suggestions for the government to work with mainland authorities on a “Northbound Trading”-style mechanism that would streamline donation channels for Hong Kong-based charitable organisations. “Given Hong Kong’s robust legal system and the implementation of the National Security Law, it should not be treated the same as US-based charities. Donations should be permitted if they comply with local regulations—this would help unlock more charitable potential.” 

This translation is a faithful representation of the original text. This article was first published in the Sing Tao Daily Newspaper.  

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