International: Hong Kong Open-ended Fund Company re-domiciliation process gazetted

In brief

On 2 July 2021, the Government of the Hong Kong Special Administrative Region published the Securities and Futures (Amendment) Bill 2021 ("Amendment Bill") in the Government Gazette. The Amendment Bill contains the changes to the Securities and Futures (Open-ended Fund Companies) Rules ("OFC Rules") to facilitate the re-domiciliation of fund corporations incorporated outside of Hong Kong to become open-ended fund companies (OFC) in Hong Kong.1

The release of the proposed mechanism in the Amendment Bill follows the earlier confirmation of the application process and eligibility criteria for the subsidy of costs to set up or re-domicile OFCs2 and further enhances the OFC regime in Hong Kong. The first reading of the Amendment Bill in the Legislative Council occurred on 7 July 2021, with further readings still to be scheduled prior to the proposed effective date of 1 November 2021 for the amendments. We discuss the proposed re-domiciliation arrangements in more depth below.

In more detail

The proposed re-domiciliation arrangements will provide significant additional opportunity for non-Hong Kong incorporated funds to be relocated to Hong Kong and gain the same status and benefits as other locally incorporated OFCs. We summarise the key steps and intended outcomes of the re-domiciliation process below.

Which funds are eligible to apply for re-domiciliation?

To be eligible, the fund must be a "non-Hong Kong fund corporation", which is defined to mean a collective investment scheme constituted as a corporation that is incorporated outside of Hong Kong as at the application date.

Where will the application for registration be made and is there a specified format?

The registration application will be made to the SFC, in the manner to be specified, and accompanied with any document or information the SFC requires.

Can the application for registration be refused by the SFC for any reason?

Yes, the application must be rejected unless the SFC is satisfied that the requirements under section 112E of the Securities and Futures Ordinance (SFO) can be satisfied. These requirements are in relation to the following aspects of an OFC:

  1. the name;
  2. the registered office;
  3. the directors;
  4. the investment manager;
  5. the custodian; and
  6. any other requirements for registration prescribed by the OFC Rules.

The SFC may also refuse registration if it is not satisfied that the registration is in the interest of the investing public.

What conditions may be imposed by the SFC upon registration?

The SFC may impose any condition that it considers appropriate.

What is the legal effect of


On the re-domiciliation date, the non-Hong Kong fund corporation:

  1. becomes and continues, as a body corporate, as a re-domiciled OFC; and
  2. the SFO applies to the re-domiciled OFC.

Is a new entity created or is there any impact on existing contracts, resolutions or obligations, etc. of the non-Hong Kong fund corporation?

No, the re-domiciliation process does not operate to:

  1. create a new legal entity;
  2. prejudice or affect the identity or continuity of the non-Hong Kong fund corporation as a corporation registered in its place of incorporation;
  3. affect any contract made, resolution passed, or any other thing done by, or in relation to, the corporation;
  4. affect any function, property, right, privilege, obligation or liability acquired, accrued or incurred by, or to, the corporation; or
  5. render defective any legal proceedings commenced or continued by, or against, the corporation.

Are there any negative tax implications from the registration as an OFC in Hong Kong?

The re-domiciliation will not, for Hong Kong purposes, constitute:

  1. a transfer of the assets of the non-Hong Kong fund corporation; or
  2. a change in beneficial ownership of those assets.

Does the re-domiciled fund need to be deregistered in its place of incorporation?

Yes. The non-Hong Kong fund corporation must:

  • as soon as practicable after re-domiciliation, take all reasonable steps to procure its deregistration in its place of incorporation;
  • be deregistered within 60 days from the re-domiciliation date; and
  • submit documentary evidence of the deregistration, in a form satisfactory to the SFC, to the SFC.

The 60-day time limit for completion of the deregistration process may be extended by the SFC subject to any conditions that the SFC considers appropriate.

Next steps

The implementation of the long-awaited re-domiciliation process in association with the cost subsidy scheme provides a further opportunity for fund managers to consider how best to structure/restructure and market their funds. Fund managers should consider:

  • whether they currently have any fund offerings that may be suitable candidates for re-domiciliation;
  • what benefits a re-domiciliation may offer for suitable funds and what, if any, impact that such a step may have on existing or potential investors including whether the fund would continue to be a suitable investment;
  • what approvals would be required from existing investors and regulators in the market of incorporation before any re-domiciliation could be commenced;
  • how the new re-domiciliation arrangements operate and what, if any, changes may be required to the existing fund terms to satisfy the requirements; and
  • whether they may wish to take advantage of the current subsidy to offset the costs to re-domicile any existing funds


We will continue to monitor further developments in the OFC regime, including changes to the legislation to give effect to the re-domiciliation proposal. To discuss how our experience with OFCs can assist you, or if you have any questions on any of the matters above, please do not hesitate to liaise with your usual contact at Baker McKenzie or the lawyers listed in this alert. 


2 Please refer to our earlier alert on this subject available at: Hong Kong: Application process and criteria for subsidy of costs to set up or re-domicile Open-ended Fund Companies announced - Baker McKenzie InsightPlus

Contact Information
Dreyfus Koo
International Associate
Hong Kong
Aaron Dauber
Registered Foreign Lawyer/Knowledge Lawyer
Hong Kong

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