Hong Kong New Limited Partnership Fund Regime 12 May 2020

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Wendy Cheng

Country Head – Hong Kong

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The Hong Kong Government recently announced the introduction of a new registration regime to enable funds to be constituted as Limited Partnerships in Hong Kong. The Limited Partnership Fund (LPF) regime, which was introduced to the Legislative Council (Legco) for first reading on Wednesday, 25 March 2020, seeks to attract private equity and venture capital funds to establish and operate in Hong Kong.

The new LPF will be an opt-in registration scheme administered by the Companies Registry (the Registry). It will cater for the operational needs of investment funds with elements of investor protection built in.

Constitution and structure

  • An LPF will be a fund that is structured in a Limited Partnership form and will be used for the purpose of managing investments for the benefit of its investors. The proposed LPF structure is not in itself a legal person.
  • A fund qualifying for registration under the LPF regime must be constituted by at least one General and one Limited Partner under a written Limited Partnership Agreement.
  • The LPF must have a registered office in Hong Kong.
  • Application should be made by the General Partner (GP) and submitted by a Hong Kong law firm or solicitor to the Registrar.
  • The name of the LPF must be in English, Chinese or a name consisting of both an English and Chinese and end with the words “Limited Partnership Fund”, “LPF” or “有限合夥基金”. The name cannot already exist, constitute a criminal offence or be offensive.
  • The GP of an LPF has unlimited liability in respect of the debts and obligations of the fund and ultimate responsibility for the management and control of the fund.
  • The Limited Partner(s) (LP) will not have day-to-day management rights or control over the underlying assets held by the LPF and hence their liability will generally be limited up to the commitment they make to the fund. They, however, will have the right to participate in the prescribed/agreed safe harbour activities[1].
  • There are no minimum capital requirements.
  • An existing fund, established under the Limited Partnership Ordinance (Cap.37) (LPO) and meeting the eligibility requirements, can register as an LPF with no impact to stamp duty, right or liabilities of the fund after registration.

Operating requirements

The General Partner must:

  • Appoint an Investment Manager (IM), which can be a Hong Kong resident over 18 years old, a company[2] or a registered non-Hong Kong company.
  • Appoint an auditor[3] independent of the GP to audit the financial statements of the LPF.
  • Ensure proper custody arrangements for the assets of the LPF.
  • Appoint an Appointed Representative (AR) – if the GP is either another Limited Partnership Fund or a non-Hong Kong Limited Partnership without a legal personality, which can be a Hong Kong resident over 18 years old, a company[4] or a registered non-Hong Kong company.
  • Appoint either an authorised institution, licenced corporation, accounting professional or legal professional (who may be the GP) as the responsible person to carry out anti-money laundering and counter-financing of terrorism measures (AML/CFT measures).
  • File an annual return with the Registrar of Companies (Registrar).

Record Keeping

  • LPFs will be required to keep and make available to the Registrar (but not for public inspection) the below records which must be kept at the registered office or any place in Hong Kong made known to the Registrar.
  • Audited financial statements:
    • Register of partners, and controller of each partner
    • Relevant AML records of the client and partner
    • Documents relating to transactions
  • The Registrar will maintain a register of all LPFs and make available the details of the LPF, the GP, the AR (if applicable) or the IM, for public inspection. The identity and particulars of the LPs will not be available to the public.


  • An LPF may be subject to profits tax exemption on transactions in qualifying assets and transactions incidental to carrying out of qualifying transactions.
  • An interest in an LPF should not be defined as “stock” under section 2 of the Stamp Duty Ordinance (Cap. 117) and therefore stamp duty should not apply. Accordingly, an instrument under which an interest in an LPF is contributed/ transferred or withdrawn is not chargeable with stamp duty.
  • In parallel to the introduction of the LPF regime, Hong Kong also announced a consultation on the treatment of a potential concession for carried issued by private equity funds.

The LPF is scheduled to come into force on Monday, 31 August 2020.

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[1] With the meaning given by section 2(1) of the Companies Ordinance (Cap. 622)
[2] As defined under Section 2(1) of the Professional Auditors Ordinance
[3] With the meaning given by section 2(1) of the Companies Ordinance (Cap. 622)
[4] Some examples of safe harbour activities include serving on a board/committee of the LPF, advising or approving the general partner/investment manager on the business, accounts, valuation or assets of the LPF, taking part in a decision about the admission/withdrawal of any partner, the term of the LPF, the appointment of investment manager, changing the investment scope of the LPF and so forth.