Hong Kong lawmakers are poised to consider a bill that would dramatically expand the tax treatment of carried interest, allowing asset managers across hedge funds, private equity, venture capital, and family offices to pay zero per cent tax on performance fees. Currently, only private equity profits qualify for this concessionary rate. The proposed change would extend eligibility to profits from securities, derivatives, cash, and deposits, fundamentally altering how these firms are taxed.

This move, described by insiders as a potential 'big bang' of tax reforms, aims to make Hong Kong a more attractive hub for asset management, directly challenging rivals like Dubai and Singapore.