Hong Kong plans to exempt cryptocurrency gains tax for private equity funds, hedge funds, and the super-rich. The region aims to attract investments into the blockchain sector and become a global hub for digital asset trading. A 20-page proposal sent to executives, which the Financial Times accessed, shows that the government is seriously considering imposing the rule.
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If imposed, Hong Kong’s new cryptocurrency tax exemption will provide a safety cushion for billionaire investors. The move will also boost investments and attract the rich and wealthy to the city. Several countries are imposing heavy taxes on cryptocurrency gains, while Hong Kong is easing the burden.
“This is an important step in boosting Hong Kong’s status as a financial and crypto trading hub,” said Patrick Yip, Vice Chairman at Deloitte China. He explained that many institutional offices including hedge funds could open offices in Hong Kong to make use of the tax exemption.
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The tax exemptions will put Hong Kong on par with the US and Singapore as Trump announced recently that he wants to make America the global hub for crypto. “These changes are designed to put Hong Kong on a par with Singapore or Luxembourg. In that there’s no risk of the fund being subject to tax,” said Darren Bowdern, KPMG’s Head of Asset Management.
Hong Kong Cryptocurrency Tax Exemption
The race to dominate the cryptocurrency hub is heating up as the US, Singapore, and Hong Kong are looking to take the top spot. The new rule would most likely be implemented in 2025 and usher the region into a new era of finances.
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Digital assets are a trillion-dollar industry and top financial institutions are now a part of it. The region that controls the major portion of the cryptocurrency market with tax exemptions will soon rule the lot. Only time will tell whether it will be the US, Singapore, or Hong Kong.