Hong Kong just drew a clear line in the sand. Proprietary trading firms, no matter how large or influential, will not benefit from the city’s proposed 0% tax concession on carried interest and performance fees.
The Financial Services and the Treasury Bureau made the announcement on August 12, clarifying that remuneration earned through proprietary operations simply doesn’t qualify. For firms like Jane Street, Citadel Securities, and Jump Trading, which trade with their own capital rather than managing outside money, the message is straightforward: you’re not a fund, so you don’t get fund tax breaks.
What the tax regime actually does
The exclusion is part of a broader legislative push called the Inland Revenue (Amendment) (Preferential Tax Regimes for Funds, Family-owned Investment Holding Vehicles and Carried Interest) Bill 2026. It was introduced to Hong Kong’s Legislative Council in June 2026, with a second reading expected later this year.
The bill’s intent is to expand Hong Kong’s existing carried-interest tax regime, which was first introduced in 2021 specifically for private equity. That original framework offered a 0% profits tax rate on eligible carried interest. The new bill widens that aperture. Instead of limiting the concession to private equity alone, it extends coverage to a more diverse set of fund managers and family offices.
