Unlock Your Fund's Potential: The Hong Kong OFC Grant Scheme

Unlock Your Fund's Potential: The Hong Kong OFC Grant Scheme | Bestar

Hong Kong OFC Grant Scheme

Unlock Your Fund's Potential: The Hong Kong OFC Grant Scheme

Hong Kong continues to solidify its position as a premier international asset and wealth management center, and a key driver of this growth is the Open-ended Fund Company (OFC) regime. To further incentivize the adoption of this modern fund structure, the Hong Kong Government, through the Securities and Futures Commission (SFC), introduced the Grant Scheme for Open-ended Fund Companies and Real Estate Investment Trusts (REITs).

This scheme offers a significant financial subsidy, making the establishment or re-domiciliation of an OFC in Hong Kong more attractive and cost-efficient for fund managers globally.

What is the Hong Kong OFC Grant Scheme?

The OFC Grant Scheme is a government initiative designed to subsidise the eligible expenses incurred by Open-ended Fund Companies (OFCs) when they are successfully incorporated in or re-domiciled to Hong Kong.

Key Scheme Details (Extended Period)

Originally launched in May 2021, the scheme has been extended, reflecting the government's continued commitment to the fund industry. The following terms apply to applications submitted on or after May 10, 2024, and the scheme operates on a first-come, first-served basis until the funding is fully disbursed or until May 9, 2027:

OFC Type	Eligible Subsidy	Maximum Grant Amount	Investment Manager Limit
Public OFC	70% of eligible expenses	HK$1,000,000	3 OFCs in total
Private OFC	70% of eligible expenses	HK$500,000	3 OFCs in total

Note: For applications submitted on or after April 11, 2025, the grant caps have been revised downwards to HK$300,000 for public OFCs and HK$150,000 for private OFCs, with a limit of only one OFC per investment manager (if they have not previously received a grant). Check the latest SFC FAQs for the most current caps and eligibility.

Eligibility: Who Can Apply?

The grant is available for costs related to:

1. OFCs successfully incorporated in Hong Kong.

2. Non-Hong Kong fund corporations successfully re-domiciled to Hong Kong as OFCs.

The Investment Manager of the OFC (who must be licensed or registered with the SFC for Type 9 regulated activity, i.e., Asset Management) is the party that typically applies for the grant on the OFC's behalf.

Covered Expenses (What the Grant Subsidizes)

The grant covers 70% of expenses paid to Hong Kong-based service providers in relation to the OFC's incorporation or re-domiciliation. Eligible expenses typically include fees charged by:

• Law firms or legal advisers (for legal work, drafting documents).

• Auditors, accountants, or tax advisers.

• Fund administrators or corporate service providers.

• Regulatory consultants.

Excluded Expenses (What the Grant Does Not Cover)

The grant does not cover statutory fees such as:

• Registration or application fees paid to the SFC or Companies Registry (CR).

• Licensing or registration fees for the Investment Manager.

• Costs for establishing a sub-fund under an existing umbrella OFC.

• Annual audit fees or listing fees.

The OFC Structure: A Competitive Edge

The OFC structure, introduced in Hong Kong in 2018, is a corporate fund vehicle that offers significant advantages over traditional unit trust structures and fixed-capital companies, making Hong Kong a preferred fund domicile.

Core Advantages for Fund Managers

• Corporate Form: The OFC is a company structure familiar to international investors, offering limited liability.

  
  

• Variable Share Capital: It allows for shares to be issued and redeemed at a price based on the fund's Net Asset Value (NAV), offering operational flexibility akin to an open-ended fund.

  
  

• Segregation of Liabilities (Sub-Funds): An Umbrella OFC can establish ring-fenced sub-funds, where the liabilities of one sub-fund do not affect the assets of others, providing crucial asset protection.

  
  

• Tax Efficiency: OFCs are typically eligible for the profits tax exemption for funds operating in Hong Kong.

  
  

• Re-domiciliation: Funds set up overseas in corporate form can easily move their domicile to Hong Kong as an OFC, benefiting from the robust local regulatory and professional ecosystem.

How to Apply for the Grant Scheme

Applications are administered by the Securities and Futures Commission (SFC). The process generally requires:

1. Successful Incorporation or Re-domiciliation: The OFC must first be officially registered and/or authorised by the SFC and the Companies Registry (CR).

   
   

2. Submission Timeline: The application must be submitted to the SFC within three months of the date of the OFC's certificate of incorporation, re-domiciliation, or authorisation (for public OFCs).

   
   

3. Required Documents: A completed Application Form, along with supporting documentation, including the certificate of incorporation/re-domiciliation and copies of invoices and receipts for the eligible expenses paid to Hong Kong-based service providers.

Critical Note on Clawback: 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 its incorporation or re-domiciliation date.

The combination of the flexible OFC structure and this substantial financial subsidy confirms Hong Kong's commitment to attracting leading fund managers and strengthening its status as a world-class financial hub.

🌟 Maximize Your Subsidy: How Bestar Hong Kong Can Unlock Your Fund's OFC Potential

Unlock Your Fund's Potential: The Hong Kong OFC Grant Scheme

Hong Kong's Open-ended Fund Company (OFC) regime, coupled with the generous OFC Grant Scheme, presents an unprecedented opportunity for global fund managers. To navigate the complex regulatory requirements and successfully secure up to HK$1,000,000 in subsidies, strategic professional support is essential.

Bestar Hong Kong stands as your trusted partner, offering a complete one-stop solution to ensure your OFC is incorporated efficiently and your grant application is maximized.

Bestar’s One-Stop OFC & Grant Solution

The OFC Grant Scheme covers up to 70% of eligible expenses paid to Hong Kong-based professional service providers. By partnering with a dedicated local expert like Bestar, you consolidate these services, streamline the process, and maximize your subsidy claim.

1. SFC Licensing & Setup (The Prerequisite)

The Investment Manager of the OFC must hold a Type 9 (Asset Management) Licence from the Securities and Futures Commission (SFC). This is the critical first step and Bestar's core expertise.

Bestar’s Service	How It Supports OFC Setup
Type 9 Licence Consulting	Full support in preparing, drafting, and submitting the rigorous SFC licence application, ensuring compliance with the "fit and proper" criteria for Responsible Officers (ROs) and Licensed Representatives (LRs).
Corporate Structuring	Advising on the optimal structure (Private vs. Public OFC, Umbrella vs. Standalone) to align with your investment strategy and meet SFC requirements.
Compliance & Manuals	Drafting bespoke compliance manuals, internal control policies, and Anti-Money Laundering (AML) documentation necessary for SFC approval.

2. OFC Incorporation & Registration (The Eligible Expense)

Bestar's corporate services are a cornerstone of the eligible expenses covered by the grant, facilitating the one-stop process with the SFC and the Companies Registry (CR).

Bestar’s Service	How It Maximizes the Grant
OFC Incorporation & Filing	Handling all legal and corporate documentation required for the OFC's registration and issuance of the Certificate of Incorporation/Re-domiciliation.
Re-domiciliation Support	Assisting non-Hong Kong fund corporations in successfully migrating their domicile to Hong Kong as an OFC, a process explicitly covered by the grant.
Mandatory Appointees	Assisting with the appointment of mandatory roles, including Hong Kong directors, and providing professional company secretarial and registered office services.

3. Grant Application Submission (The Maximization Stage)

Navigating the grant application's strict timeline and documentation requirements is crucial to securing the subsidy.

• Eligibility Confirmation: Bestar ensures that the OFC meets all criteria, including the two-year minimum operation period to avoid clawback.

  
  

• Expense Consolidation: We meticulously track and consolidate the fees for all Hong Kong-based professional services (including our own eligible fees) to form a robust claim for the 70% subsidy.

  
  

• Timely Submission: The application must be submitted to the SFC within three months of the OFC's registration/authorisation date. Bestar manages this deadline to ensure no cap is missed.

  
  

• SFC Liaison: Serving as the professional intermediary, Bestar handles all queries and document requests from the SFC regarding the grant application, accelerating the approval process.

  
  

Key Benefits of Partnering with Bestar

By choosing Bestar Hong Kong, your fund management team gains three critical advantages:

1. Compliance Confidence: Mitigate regulatory risk with an experienced team that understands the SFC's Type 9 licensing and OFC Code requirements inside and out.

   
   

2. Cost Efficiency: Leverage our services to qualify for the maximum grant (up to HK$1,000,000 for Public OFCs) by consolidating professional fees that are eligible for the 70% subsidy.

   
   

3. Speed to Market: Utilize our one-stop platform to significantly reduce the time spent coordinating between various legal, corporate, and compliance consultants, accelerating your fund launch.

   
   

Ready to launch your Hong Kong OFC and secure your subsidy?

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