Hong Kong is set to attract top global fund managers to relocate to the city, as they will no longer need to pay salaries tax on performance-linked bonuses if they meet certain criteria under a proposed law change to be submitted to the Legislative Council, according to industry sources and academia.If passed, the measure would make Hong Kong the first major Asian financial centre to grant tax relief on such bonuses, reinforcing the city’s role as the world’s largest offshore wealth management centre, a source familiar with the proposal said.At present, Singapore’s general salaries tax can reach 24 per cent, the UK’s up to 45 per cent and the US up to 50 per cent, while profit tax in those markets ranges between 17 and 32.5 per cent.In Hong Kong, individuals face salaries tax capped at a standard rate of 15 per cent, while companies pay corporate profits tax at 16.5 per cent.Under the plan, fund staff would be exempt from salaries tax on performance fee income, while fund houses would not need to pay profit tax on such income. The measure would take effect retroactively from April 2025, according to a government paper presented to lawmakers earlier this year.The move will help Hong Kong retain its recently claimed title as the world’s top offshore wealth management centre, according to industry experts. Photo: Jonathan WongThe proposed tax incentive would give Hong Kong the lowest tax rate worldwide for managers of hedge funds, private equity funds and venture capital funds whose income was largely driven by performance fees, the source said.