Hong Kong should attract family offices provided that they are run by “legitimate businessmen” with “legitimate money,” the city’s Chief Executive John Lee has said after a Dubai sheikh’s proposal to set up a family office drew suspicion.
Lee said on Tuesday that cities around the world strove to attract high earners to set up family offices, a type of private wealth management company that manages high earners’ funds. Family offices can create “strong financial benefits” to Hong Kong, the leader said.
“So we will do our best to attract many [family offices] to come, provided that the money [is] legitimate money, no matter whether he is a man in the street, or he comes from a wealthy family or he’s [from] a sovereign fund,” Lee said in response to a reporter’s question at his weekly press conference.
The top official added that Hong Kong should “balance benefits and risks” while attracting family offices.
Lee’s comments marked the first time he personally responded to the saga surrounding the sheikh’s family office plan since controversy arose in recent weeks.
Sheikh Ali Rashed Ali Saeed Al Maktoum, who said he was a nephew of the United Arab Emirates ruler Sheikh Mohammed bin Rashid Al Maktoum, announced in March his plan to set up a family office in Hong Kong to manage up to US$500 million in a Bloomberg interview.
The Hang Seng University of Hong Kong signed a memorandum of understanding with the sheikh’s family office and appointed Al Maktoum as an honorary professor at the end of March.
But shortly after, Maktoum said the family office’s opening had been delayed, citing urgent issues in Dubai. At around the same time, suspicion surrounding Maktoum’s identity and source of wealth arose as local media outlets reported that the sheikh resembled a singer who was popular in the Philippines.
The official website and LinkedIn page of the Dubai Sheikh’s family office was offline when HKFP checked on Tuesday morning. The office’s LinkedIn page also could not be viewed.
‘Always welcome’
In a response to HKFP, a government spokesperson said last Friday that family offices brought opportunities to the financial industry and attracted capital to Hong Kong. Since May 2023, Hong Kong has offered tax exemptions to family offices meeting asset requirements.
“The government has not made any investments in family offices established in Hong Kong, nor will it provide any additional policy benefits or financial support,” the spokesperson said in the Chinese-language statement.
On Tuesday, Lee said that the government would do its best to attract family offices.
“The government should not always be passive in this competitive world for family offices. This is an area every cities are fighting forward to get, provided that they are legitimate businessmen and legitimate asset owners. They’re always welcome,” Lee said.
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