Overview and core advantages of Hong Kong Limited Partnership Fund (LPF)
Hong Kong’s Limited Partnership Fund Ordinance (Chapter 637) will be officially implemented on August 31, 2020，Aims to attract private investment funds (including private equity and venture capital funds) to register and operate in Hong Kong。As a highly competitive fund structure，The Hong Kong Limited Partnership Fund (LPF) is not only structurally equivalent to the Cayman Islands Exempted Limited Partnership (ELP)，More on tax、Demonstrated significant advantages in compliance costs and geopolitical risk prevention。Hong Kong Xintong's legal team is committed to providing you with one-stop LPF establishment andArchitecture constructionServe。
LPF is investing、Great contractual freedom in terms of profit distribution and divestment。Partners are free to agree on the method of payment of capital in accordance with the Limited Partnership Agreement (LPA)、Income distribution waterfall mechanism (Waterfall) and the duration of the fund，No need to be bound by the capital maintenance principles of traditional corporate structures。
Qualifying LPFs can apply for the Unified Fund Exemption System (UFE) under the Hong Kong Inland Revenue Ordinance，Its profits derived from qualifying transactions are exempt from Hong Kong profits tax。also，LPF as a Hong Kong local entity，Easier to obtain Hong Kong tax resident status (TRC)，Thereby enjoying the benefits of the Comprehensive Avoidance of Double Taxation Agreements (CDTA) signed between Hong Kong and many countries/regions。
The LPF is on the public register of the Hong Kong Companies Registry (CR)，Only the fund name needs to be disclosed、Name and address of general partner (GP) and investment manager。Limited Partner (LP) Status、The amount of capital contribution and the specific financial data of the fund do not need to be disclosed，Protect investor privacy to the greatest extent。
Hong Kong provides a seamless fund redomiciliation mechanism。Already in the Cayman Islands、Limited partnership funds established in offshore jurisdictions such as the BVI，You can directly transfer to Hong Kong to become an LPF through simple procedures.，And the re-registration process will not interrupt the legal personality of the original fund.，Nor does it trigger new stamp duty or profits tax。
Legal conditions for establishment of Hong Kong Limited Partnership Fund (LPF)
At least one GP must be appointed，Unlimited liability for fund debts。GP can be a natural person over 18 years old、Hong Kong Private Limited Company、non-Hong Kong company、Hong Kong Limited Partnership Fund (LPF) or Limited Liability Partnership (LLP)。GPs are not required to hold a Hong Kong Securities and Futures Commission (SFC) license，However, it is necessary to fulfill the final management responsibility of the fund。
There must be at least one LP。LP can be a natural person、company or partnership。The LP's liability for fund debts is limited to the amount of its committed capital contribution，And the LP shall not participate in the daily management of the fund and act on behalf of the fund externally (except for the safe harbor clause)。
The GP must appoint an investment manager to perform the day-to-day investment management functions of the fund。The investment manager can be the GP himself、A natural person over 18 years old or a Hong Kong registered company。If the investment manager engages in "regulated activities" as defined in the Securities and Futures Ordinance in Hong Kong (such as Type 9 asset management)，You must apply for the corresponding license from SFC。
GPs must appoint an anti-money laundering officer for the LPF，Responsible for enforcing the due diligence and record-keeping requirements under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615)。The responsible person must be a Hong Kong licensed trust or company service provider (TCSP)，Such as Hong Kong Information Communication)、Hong Kong Certified Public Accountant or Hong Kong Legal Practitioner。
LPF must appoint an independent auditor，Annual audit of the fund’s financial statements。The auditor must be a practicing accountant or accounting firm registered under the Professional Accountants Ordinance of Hong Kong。
The LPF must have a registered office address in Hong Kong，For receiving statutory communications and keeping statutory registers (e.g. register of partners、Anti-money laundering records, etc.)。Hong Kong Xintong can provide you with compliant Hong Kong registered address services。
Registration process of Hong Kong Limited Partnership Fund (LPF)
Hong Kong Xintong compliance experts confirm the fund structure (identity of GP/LP/IM) with the client，Conduct fund name search，Ensure that the proposed name does not conflict with existing entities，and the name must contain the words "Limited Partnership Fund" or "LPF"。
Have a professional legal team draft or review the Limited Partnership Agreement (LPA)，Clarify the fund’s investment strategy、capital subscription、Profit distribution (Waterfall)、Management fees and rights and obligations of GP/LP。
Collect KYC documents from all partners and executives，The Hong Kong registered lawyer cooperated by Hong Kong Information Network formally submitted the LPF registration application form (Form LPF1) and related fees to the Hong Kong Companies Registry (CR)。
After approval by the Company Registry (usually takes 4 working days)，A "Limited Partnership Fund Registration Certificate" and a "Business Registration Certificate" (BR) will be issued。At this time, LPF was officially established。
Assist LPF to open fund account in Hong Kong or offshore bank。at the same time，Officially appointed auditor and anti-money laundering officer (AML Officer)，and keep a statutory register at the registered office，Complete all initial compliance actions。
Taxation and annual review of Hong Kong Limited Partnership Fund (LPF)
1. annual return（Annual Return）
The GP must register within 42 days of each anniversary date of incorporation of the LPF，TowardsHong Kong Companies RegistrySubmission of Annual Return (Form LPF4)，Confirm the registered address of the fund、GP、investment managers andAnti-money launderingLatest information from the person in charge，and pay the annual registration fee。
2. Business Registration Certificate (BR) Renewal
LPF needs to apply to the Hong Kong Inland Revenue Department for renewal of business registration certificate every year，and pay the corresponding business registration fees。Hong Kong Xintong will notify you in advance and handle it on your behalf.，Ensure the legal existence of the fund。
3. Unified Fund Exemption (UFE) and tax filing
Although LPF itself does not have independent legal personality，But for tax purposes，The Inland Revenue Department may require it to submit a profits tax return。If the investment activities of the LPF comply with the requirements of Schedule 16C of the Inland Revenue Ordinance (such as bySFC licensed institutionmanage，or meet certain exemption conditions)，which are derived from qualifying assets such as securities、100% profits tax exemption on trading profits from private company shares)。also，The transfer of LPF partnership interests does not fall within the definition of Hong Kong stocks，Therefore, the transfer of LP shares is exempt from Hong Kong stamp duty.。
Frequently Asked Questions about Hong Kong Limited Partnership Fund (LPF)(FAQ)
Hong Kong LPF and Cayman ELP are highly similar in legal structure，All adopt the GP-LP model and LP enjoys limited liability。The core difference is：LPF registration and maintenance costs are significantly lower than Cayman ELP；LPF is governed by Hong Kong law，It is easier to connect assets and investors in Asia, especially in Greater China.；And in the context of the current international anti-tax avoidance (such as economic substance law)，Hong Kong LPF as an onshore fund，Easier to meet economic substance requirements and obtain tax treaty benefits。
unnecessary。Hong Kong’s Limited Partnership Fund Ordinance does not require GPs to hold an SFC license。but，If the GP also serves as the investment manager of the fund，And engage in "Type 9 (Provision of Asset Management)" regulated activities as defined in the Securities and Futures Ordinance in Hong Kong，then the entity must apply for a corresponding financial license from the SFC。
The investment manager can be the GP himself、A natural person over 18 years old or a Hong Kong registered company。The investment manager is responsible for executing the day-to-day investment decisions of the fund。It should be noted that，If an investment manager conducts asset management business in Hong Kong，Usually required to hold an SFC Category 9 license，Unless it meets specific exemption conditions (such as only providing services to companies within the same group)。
No。Hong Kong’s Limited Partnership Fund Ordinance does not set statutory minimum capital requirements for LPFs。Amount of capital contributed by partners、The form of capital contribution (cash or in kind) and the time of capital contribution are completely stipulated in the Limited Partnership Agreement (LPA)。
According to legal requirements，LPF within 24 months from the date of issuance of registration certificate，Must receive initial capital injection from all partners (including GP and at least one LP)。If the capital injection is not completed within 24 months，The Companies Registry has the power to deregister the fund。
will not be made public。LPF only shows the fund name on the public register of the Hong Kong Companies Registry、Registered address、GP、Information about investment managers and anti-money laundering officers。LP's name、Identity background and capital contribution amount are only stored in the partner register within the fund，Not open to the public，Highly protect investor privacy。
Can。Hong Kong has introduced an overseas fund redomiciliation mechanism from November 2021。in the cayman islands、Limited partnership funds registered in jurisdictions such as the BVI，As long as the establishment conditions of Hong Kong LPF are met，You can apply to the Hong Kong Companies Registry for re-registration.。The redomiciliation retains the fund’s original corporate identity and business continuity.，No need for liquidation and reorganization，and does not trigger new stamp duty。
To enjoy UFE tax exemption benefits，LPF must meet certain conditions：The transaction must be a "qualifying transaction" (such as investing in securities、Private company shares, etc.)，And the transaction must be conducted or arranged by an SFC licensed institution，Or the fund meets the definition of a "qualified investment fund" (if it has a sufficient number of investors and the GP/IM does not enjoy absolute control)。Hong Kong Xintong tax team can conduct a detailed UFE suitability assessment for you。
Yes。It is a statutory requirement that LPF must appoint an independent auditor (must be a Hong Kong Certified Public Accountant)，and audit the fund’s financial statements every year。This is a mandatory requirement to maintain LPF compliance status。
The person in charge of anti-money laundering must be a Hong Kong licensed trust or company service provider (TCSP)，Such as Hong Kong Information Communication)、Hong Kong Certified Public Accountant or Hong Kong Legal Practitioner。This person is responsible for conducting KYC (Know Your Customer) due diligence on investors，and maintain relevant anti-money laundering records，To comply with the requirements of Hong Kong’s Anti-Money Laundering Ordinance。
The annual routine maintenance of LPF mainly includes：1. Submit Annual Return (Form LPF4) to the Registrar of Companies；2. Renewal of Business Registration Certificate (BR)；3. Complete annual financial audit；4. Continuously update partner register and anti-money laundering (AML/KYC) records；5. Submit profits tax returns as required by the Inland Revenue Department。Hong Kong Xintong provides a full set of LPF annual compliance custody services。
