Grant Scheme for Open-ended Fund Companies
Updated: Mar 30
The Securities and Futures Commission (SFC) operates a government grant scheme to subsidise the establishment of open-ended fund companies (OFCs) in Hong Kong.
For OFCs successfully established in or relocated to Hong Kong, the scheme covers 70% of eligible fees paid to service providers in Hong Kong, up to a limit of HK$1 million per OFC.
By encouraging a wider range of investment vehicles, the grant scheme reinforces Hong Kong's position as an international asset and wealth management centre.
The scheme will operate for three years and the application period is 10 May 2021 – 9 May 2024.
Eligible Applicants under the Grant Scheme
The subsidy is applicable to OFCs successfully incorporated in Hong Kong, and non-Hong Kong fund companies that successfully relocate to Hong Kong as OFCs.
OFC's investment manager may apply for funding under the grant scheme on behalf of OFC.
Grant Amount Approved under the Grant Scheme
The funding amount for each application is equivalent to 70% of eligible expenses, with a cap of HK$1 million per OFC and a maximum of 3 OFCs per investment manager.
Eligible Expenses under the Grant Scheme
Eligible fees related to the establishment of an OFC and the re-domiciliation of a non-Hong Kong fund house to Hong Kong as an OFC must be paid to service providers based in Hong Kong. Examples of eligible expenses include:
a. Fees charged by law firms or legal advisors for legal work related to the establishment/re-domiciliation of OFCs, including
(i) drafting OFC’s legal and offering documents, and
(ii) work related to authorisation of OFC with the SFC;
b. Fees charged by auditors, accountants or tax advisors for accounting and/or tax services related to the establishment/re-domiciliation of OFC;
c. Fees charged by fund administrators, corporate service providers or company secretaries for incorporation/re-domiciliation services in connection with setting up an OFC, including work done for all filings required for incorporation/re-domiciliation or registration of an OFC;
d. Fees charged by regulatory advisers for work done on the incorporation/re-domiciliation of the OFC and the authorization of the OFC with the SFC; and
e. In the case of listing an OFC, the fee charged by the listing agent.
In general, statutory fees (such as registration or application fees with the SFC) and fees associated with applying to the SFC for licensing or registration of investment managers will not be covered under the grant scheme. Fees incurred for setting up a sub-fund under an existing umbrella OFC and listing fees charged to the Hong Kong Stock Exchange are also excluded.
Only costs related to the establishment of OFCs and the re-domiciliation of non-Hong Kong fund companies to Hong Kong to become OFCs are covered under the grant scheme. Generally, audit fees paid to accounting firms in connection with annual audit reviews will not be considered eligible expenses under the grant scheme.
Minimum Operating Conditions
An OFC which has been awarded a grant cannot commence winding-up or apply 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 awarded if the OFC commences winding-up or applies for termination of registration within 2 years from the date of incorporation or re-domiciliation.
Application Process for a Grant under the Grant Scheme
Applicants should submit to the SFC a duly signed and completed Application Form for the Grant Scheme (“Application Form”) together with all requisite supporting information and documents, including the certificate of incorporation or certificate of re-domiciliation issued by the Companies Registry (“CR”) (in the case of OFCs) and the scanned copies of the invoice(s)/receipt(s) of payment (“Supporting Information”).
During the vetting process, the SFC may from time to time request for the submission of additional supporting information or documents which it deems necessary for facilitating its consideration as to whether a grant should be approved.
When a Grant Scheme Application should be Submitted to the SFC
For private OFCs, formal applications must be submitted to the SFC within 3 months from the date of the certificate of incorporation or certificate of re-domiciliation issued by the Companies Registry.
For public OFCs, applicants may submit to the SFC a duly signed and completed Public Open-ended Fund Companies – Confirmation of Intention to Apply for a Grant under the Grant Scheme for Open-ended Fund Companies as part of their product application submission. The Application Form and Supporting Information must be submitted to the SFC within 3 months from the date on which the authorization of the public OFC becomes effective.
The Requirements for Submitting Documents in support of a Grant Scheme Application to the SFC
Applicants are not required to submit hard copy of documents to the SFC.
Option 1: SFC will accept submission of an un-signed copy of the Application Form and the Public Open-ended Fund Companies – Confirmation of Intention to Apply for a Grant under the Grant Scheme for Open-ended Fund Companies (for public OFCs) (COI) which is required to be completed by an applicant, provided that the Application Form and the COI shall be submitted with an email confirmation (from a person who meets the signatory requirements) that all information and, where applicable, confirmations and undertakings contained in the Application Form and the COI (and all documents submitted relating thereto) are true and accurate.
Option 2: The applicant can submit scanned copy of the Application Form and the Public Open-ended Fund Companies – Confirmation of Intention to Apply for a Grant under the Grant Scheme for Open-ended Fund Companies (for public OFCs)
When the SFC will Take Up an Application Submitted
In general, the SFC will issue a letter (“Acknowledgement Letter”) within 2 business days from the date of receipt of the Application Form and Supporting Information, to inform the applicant that the SFC will process the application.
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