By Clare Chang, Managing Director, Greater China
IQ-EQ recently convened a panel discussion in Hong Kong featuring senior leaders from Ashurst, EY, Gaorong Ventures, and Phoenix Property Investors. The session provided a timely forum to explore how fund managers across Greater China are responding to evolving regulatory frameworks, tax reforms and shifting investor expectations.
I had the privilege of facilitating a dynamic conversation that surfaced practical insights and strategic responses to the region’s rapidly changing landscape. Below are the key themes that emerged.
1. Rising regulatory and tax complexity
Fund managers are navigating an increasingly complex regulatory environment, particularly in relation to cross-border structuring and substance requirements. Licensing regimes are evolving, and compliance demands are becoming more fragmented and fast-moving.
In response, firms are reassessing legacy structures and transitioning to models that are:
- Transparent and easier to monitor
- Scalable across multiple jurisdictions
- Aligned with international regulatory and tax standards
This shift reflects a broader industry trend toward operational resilience and global best practices.
2. Hong Kong tax reform: cautious optimism
One of the most closely watched developments is Hong Kong’s proposed tax changes. These reforms are expected to impact areas such as carried interest, family office eligibility and fund substance rules.
While the direction of change is broadly welcomed, panellists noted several concerns:
- Uncertainty due to the lack of finalised guidance
- Need for vigilance around implementation timelines
- Long-term benefits from greater alignment with global tax norms
These reforms are part of a broader effort to enhance Hong Kong’s competitiveness as a fund management hub.
3. Investor expectations are reshaping fund platforms
Investor priorities are evolving beyond financial returns. Today’s LPs are demanding greater transparency, governance and operational sophistication.
Key areas of focus include:
- Fee and performance transparency
- Robust governance, including independent oversight
- Scalable infrastructure for cross-border growth and real-time reporting
- ESG integration and tax transparency
These expectations are driving a fundamental redesign of fund platforms and deepening engagement between managers and investors.
4. Strategic responses from fund managers
To stay ahead of these challenges, fund managers are proactively enhancing their operational and compliance capabilities.
Common strategies include:
- Reviewing fund and GP structures to ensure regulatory alignment
- Embedding technology and automation into compliance workflows
- Strengthening governance and reporting frameworks
- Building flexible, scalable operational models to support growth and resilience
Firms that embrace digital transformation and AI-driven compliance tools are expected to gain a competitive edge in 2025.
Key takeaways and actions
- Regulatory and tax pressures – Fund managers must proactively reassess fund and GP structures, engage advisors, and diversify jurisdictions to stay compliant and competitive
- Investor expectations – To meet evolving demands, platforms should embed independent governance, enhance transparency in fees and performance, and integrate ESG and tax reporting
- Operational readiness – Cross-border growth hinges on scalable infrastructure, requiring investment in automation, multi-jurisdictional models, and contingency planning
- Hong Kong tax reforms – While promising, managers must monitor Inland Revenue Department (IRD) updates, prepare for varied reform scenarios, and benchmark readiness with peers to mitigate implementation risks
How we can help
At IQ-EQ, we partner with fund managers across Greater China to deliver tailored solutions in fund structuring, regulatory compliance, tax advisory, and operational support. Our deep local expertise, backed by global capabilities, empowers clients to navigate complexity and scale with confidence.
To explore how we can support your strategy, please reach out to our team.
