Alert March 24, 2020 March 24, 2020
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Hong Kong to Revamp Limited Partnership Regime to Attract Private Funds



Hong Kong has a strong reputation as a global and regional hub for the asset management and funds industry and is clearly looking to maintain and improve its competitiveness in this sector. In the recent 2020-2021 Budget, and particularly in the current political and economic climate, the Hong Kong government has been keen to promote economic growth initiatives one of which is promoting the local private equity fund industry (including venture capital, real estate, infrastructure, etc. funds).

The Budget foreshadowed progress in two areas under consultation with industry: a specific Hong Kong limited partnership vehicle designed for private equity funds and the clarification of carried interest tax treatment for private equity funds. While the government continues to consult with industry on potential tax concessions in respect of carried interest, it took a major step toward the creation of a more suitable local private equity fund vehicle by introducing a bill for a ‘Limited Partnership Fund’ (LPF) regime on March 20, 2020.[i] The LPF is significantly improved from the outdated limited partnership which can be formed under the Limited Partnership Ordinance (Cap. 37) (LPO) today.

What are the key features of the new legislation?

Key eligibility requirements and characteristics

  • The fund must be constituted by a limited partnership agreement and have at least one general partner and at least one limited partner.
    • The general partner may be a natural person over 18 years old, a private Hong Kong company, a non-Hong Kong company registered with the Registrar of Companies as a registered non-Hong Kong company, a limited partnership under the LPO, another LPF or a non-Hong Kong limited partnership with or without legal personality.
    • The limited partner may be a natural person, a corporation, a partnership of any kind, an unincorporated body  or any other entity.
  • The fund must have a registered office in Hong Kong for receipt of notices.
  • The application for registration must be submitted by a Hong Kong solicitor/firm.
  • The fund will not have separate legal personality.

Legal Liability

  • In line with the limited partnership regimes of other key funds jurisdictions the general partner has unlimited liability for the debts and obligations of the fund and generally each limited partner is not liable for the debts and obligations of the fund beyond the amount of the limited partner’s agreed contribution unless it takes part in the management of the fund.
  • A ‘white list’ of permitted activities which will not be regarded as limited partners taking part in the management of the fund is included and is broadly similar to other key funds jurisdictions.

Compliance requirements

  • The general partner must appoint an investment manager (which may be the general partner itself or another person which is a Hong Kong resident over 18 years old, a Hong Kong company or a registered non-Hong Kong company) to be carry out the day-to-day investment management functions of the fund.
  • The general partner must appoint an auditor to carry out audits of the financial statements of the fund.
  • The general partner has a duty to ensure proper custody arrangements for the assets of the fund as specified in the limited partnership agreement (however, note that additional custody requirements may apply in relation to the fund manager’s license from the Securities and Futures Commission of Hong Kong (SFC)).
  • The general partner must appoint a responsible person (which may be the general partner or another person) to fulfil certain AML functions. The responsible person must an authorized institution, a licensed corporation, an accounting professional or a legal professional.


  • The fund must maintain certain records in relation to audited financial statements, register of partners, AML information, records of fund transactions and the controllers of the fund partners.
  • Such records of the fund may be inspected by certain Hong Kong government agencies (but there is no indication that they will have access to any other fund documents).
  • The limited partners only have a right to inspect the audited financial statements of the fund.
  • No fund records are available for inspection by the general public.

Can existing limited partnerships become an LPF?

  • Existing limited partnerships under the LPO which fulfil the eligibility requirements for an LPF may apply to migrate to become an LPF.
  • There is currently no prescribed mechanism for redomiciling offshore funds to become an LPF although there is a possibility that this may be introduced in the future.

When will the legislation come into effect?

  • The Limited Partnership Funds Bill is expected to become law on August 31, 2020.

The Road Ahead

These features put the LPF on substantially equal footing with limited partnerships in other key fund jurisdictions such as the Cayman Islands, Delaware, Luxembourg and Singapore. Nonetheless how the LPF regime will evolve and the level of uptake amongst private fund managers will undoubtedly also be impacted by other shifts taking place in Hong Kong. In recent months the SFC has been consulting with the local private equity industry on how Hong Kong licensing requirements apply to private equity firms conducting business in Hong Kong and it released a circular providing further guidance in January.[ii] Given the historically wide variance in practice of Hong Kong private fund managers in respect of SFC licensing, any decision whether to use the LPF will at least partly be informed by whether a manager is, or will become, licensed to carry out SFC-regulated activities in Hong Kong. Furthermore, the attractiveness of the LPF regime in practice will also likely depend on the extent of the Hong Kong government’s tax concessions in respect of carried interest.

In any event, the LPF regime will certainly be a welcome option for local private fund managers to consider given that Hong Kong’s long-time regional rival Singapore is already a number of steps ahead in developing legal, tax and regulatory regimes to attract private fund managers. In addition, although the Hong Kong private funds industry has traditionally used offshore jurisdictions such as the Cayman Islands, these offshore jurisdictions inevitably involve a double layer of regulation and administration (e.g. auditors, lawyers and administrators) and have been increasing their regulatory compliance burdens (e.g. AML regulations, economic substance requirements and the proposed Private Funds bill) which could make a local fund vehicle alternative relatively more attractive.

If you would like to discuss how the LPF regime may benefit your business then please contact Gregory Barclay or your usual Goodwin contact.



香港拥有作为国际及地区资产和基金行业中心地位的崇高声誉,一直非常重视巩固和提升在该领域的竞争力。 在当前的政治和经济环境下,香港政府在最近的2020-2021年度《财政预算案》中,致力推出促进经济增长的措施,而其中一项就是推动本地私募股权基金行业(包括风险资本、房地产、基础设施等基金)的发展。




  • 该基金必须由有限合伙协议组成,并至少有一位普通合伙人和至少一位有限合伙人。
    • 普通合伙人可以是18岁以上的自然人、私人香港公司、于香港公司注册处注册的非香港公司、根据LPO注册的有限责任合伙、有限合伙基金、或具有或不具有法人资格的非香港有限责任合伙。
    • 有限合伙人可以是自然人、公司、任何种类的合伙、不属法团的团体或任何其他实体。
  • 该基金必须在香港设有注册办事处以接收通知。
  • 注册申请必须由香港律师/事务所提交。
  • 该基金将不具有单独的法人地位。


  • 普通合伙人必须任命一名投资经理(可以是普通合伙人本身或18岁以上的香港居民、香港公司或注册非香港公司)来执行基金的日常投资管理职能。
  • 普通合伙人必须任命一名审计师对基金的财务报表进行审计。
  • 普通合伙人有责任确保对有限合伙协议中规定的基金资产进行适当的托管安排(但请注意,额外的托管要求可能适用于香港证监会(SFC)所颁发给基金经理的执照)。
  • 普通合伙人必须任命一名负责人(可以是普通合伙人或其他人士)来履行某些反洗黑钱职能。 负责人必须是认可机构、持牌法团、会计或法律专业人士。


  • 该基金必须保留已审计的财务报表、合伙人登记册、反洗黑钱信息、基金交易记录和各基金合伙人的控制人的有关特定记录。
  • 特定香港政府机构可以检查此类基金记录(但没显示可以取览任何其他基金文件)。
  • 有限合伙人仅有权检查基金的已审计财务报表。
  • 没有可供公众查阅的基金记录。


  • 现依据《有限责任合伙条例》所设立的有限合伙若能满足LPF的资格要求可申请转移成为LPF。
  • 当前并没有法定机制让离岸基金转移注册地成为LPF,但将来有可能引入该做法。


  • 《有限合伙基金法案》预计将于2020年8月31日成为正式法律。


这些特征使LPF与其他主要基金管辖区(例如开曼群岛、特拉华州、卢森堡和新加坡)的有限合伙基础上处于平等状况。尽管如此,LPF条例将如何发展、及私募基金经理的接纳程度无疑也将受到香港发生的其他变化所影响。在最近数月,SFC一直就本地受规管活动牌照要求该如何适用于在香港经营的私募基金公司,与本地私募基金行业进行沟通,并于1月发表了一份提供进一步指导的通函 。2鉴于香港私募基金经理就SFC发牌方面的做法历来有颇大差异,任何是否使用LPF的决定都会至少部分取决于该基金经理是否已获发或将会获发在香港进行受SFC监管的活动牌照。此外,LPF条例在实践中的吸引力还可能取决于香港政府对附带权益的税收优惠程度。


如果您对LPF条例如何使您的业务受益欲作进一步查询,请联系Gregory Barclay或其他您通常联系的高赢律师。