Hong Kong Overtakes Switzerland as China’s Wealth Moves to the Next Generation
Byline: Karen Jones, founder of Citywealth, has more than 20 years’ experience in global private wealth.
Record inflows have put Hong Kong at the top of global wealth management, but advisers on the ground say the more immediate story is mainland China’s taxation of offshore trusts and a market already dealing with second-generation succession.
Hong Kong has overtaken Switzerland as the world’s largest centre for cross-border wealth for the first time, according to Boston Consulting Group’s 2026 Global Wealth Report. Cross-border assets booked in the city rose 10.7% to US$2.9 trillion in 2025, driven by mainland Chinese inflows, stronger equity markets and renewed IPO activity.
In brief
Hong Kong overtook Switzerland as the world’s largest cross-border wealth centre in 2025, with US$2.9 trillion booked in the city, according to Boston Consulting Group.
The Hong Kong Securities and Futures Commission says total assets under management rose 20% to HK$42.2 trillion, while private banking and private wealth management assets increased 24% to HK$12.9 trillion.
Mainland China’s new offshore trust tax rules took effect on 24 July 2026. A 90-day regularisation window for specified historic liabilities closes on 22 October.
Advisers say many families using Hong Kong have already experienced one succession and are dealing with inheritance, governance, family law and second-generation wealth transfer.
New Zealand, Singapore, Malaysia, Dubai, Cayman and the BVI are benefiting as families spread residence, investment, corporate and succession arrangements across several jurisdictions.
Technology and digital-asset fortunes are moving into regulated wealth management, but firms face growing demands around custody, beneficial ownership, recoverability and international coordination.
Article
The wider industry also reached new highs. The Hong Kong Securities and Futures Commission said total assets under management rose by 20% to HK$42.2 trillion in 2025, supported by net fund inflows of HK$2.1 trillion. Private banking and private wealth management assets increased by 24% to HK$12.9 trillion.
More than 54% of total assets were sourced from investors outside mainland China and Hong Kong, while 56% of assets under management were invested beyond those two markets. The figures support Hong Kong’s position as an international financial centre rather than simply a conduit for Chinese wealth.
Yet ask private client advisers what is occupying their time and the answer is not market rankings, IPOs or recovering asset values. It is a new mainland Chinese tax regime for offshore trusts, introduced with only three months for some historic liabilities to be declared and paid.
“Most of the market here is dealing with A21,” says Clifford Ng, co-managing partner of Zhong Lun’s Hong Kong office. “Announcement 21 from China Tax Administration is starting to tax offshore trusts with retroactive effect with the first filing and payment deadline of 22 October.”
Three months to review years of trust activity
Announcement No. 21 was issued by China’s Ministry of Finance and State Taxation Administration on 24 July 2026. A companion measure, Announcement No. 15, sets out the filing, administration and enforcement process. Both took effect immediately.
Together, the measures bring offshore trusts and other overseas arrangements with trust-like functions into a clearer mainland Chinese individual income tax regime. The rules can apply when assets are transferred into a trust, while income is generated within it, when benefits are distributed and when events such as death or a change in tax residence occur.
They apply to Chinese tax residents placing domestic or overseas assets into offshore trusts, together with certain arrangements involving non-residents, Chinese assets or effective control by a resident individual.
The immediate concern is the 90-day window allowed for dealing with some historic tax positions. According to tax analyses published by KPMG China and Dentons Rodyk, mainland taxpayers have until 22 October 2026 to declare and pay specified liabilities without late-payment interest. The provisions include certain transfers made from 1 January 2023, while income arising in older trusts before 2026 may also have to be declared.
This is a mainland Chinese tax measure, not a change to Hong Kong’s tax system. Its effects are nevertheless being felt in Hong Kong because many China-linked families use the city’s lawyers, trustees, private banks and family office advisers to manage international structures.
For those families, the issue is not simply whether an offshore trust remains effective under Cayman, BVI or another governing law. Advisers must establish what was transferred into the trust, what income arose within it or its underlying companies, who exercised control, what benefits were provided to family members and whether sufficient records and liquidity are available to meet a mainland Chinese tax bill.
Structures created years ago for succession or asset protection are therefore having to be reviewed against a regime that gives families and advisers three months, rather than several years, to deal with specified historic liabilities.
A second-generation market behind the first-generation story
Outside Asia, China is still widely presented as one of the world’s great first-generation wealth opportunities. The familiar picture is of an entrepreneur creating a fortune, establishing a family office and beginning to consider trusts and succession for the first time.
Advisers working with families in Hong Kong describe a market that is further along. New fortunes continue to be created, but many of the clients now seeking advice have already experienced one transfer of wealth. Their questions concern inheritance, family governance, matrimonial risk and the division of assets between family members living under different legal and tax systems.
“Hong Kong’s ascent to the top of the cross-border wealth league table reflects a structural shift in where mainland Chinese families want their wealth held, advised and eventually transferred,” says Alfred Ip TEP, partner and notary public at Hugill & Ip.
“From a private client perspective, the real story is not the headline AUM figure but the qualitative demand it generates: more complex trust structures, multi-jurisdictional estate plans, and succession advice that bridges common law and civil law thinking.
“The commercial opportunity is real, but so is the execution risk. Firms expanding headcount quickly risk diluting service quality at precisely the moment clients expect more. The families arriving now are sophisticated. They have often experienced one generation of wealth transfer and are not looking for generic solutions.”
“As for regional spillover, Hong Kong’s growth is seeding activity in Singapore, the UAE, and jurisdictions like Cayman and BVI. But Hong Kong retains a unique advantage: proximity to the source of the Chinese wealth and a legal system mainland families trust. That combination is difficult to replicate.”
Ip, whose practice covers private client, probate, trust, family and divorce matters, says it is also inaccurate to treat every family using Hong Kong as a newly wealthy mainland Chinese household.
“Many are Southeast Asian Chinese diaspora, Malaysian, Indonesian, Singaporean, plus some Middle Eastern and South Asian families structured through Hong Kong. Most have already navigated one succession event. That is why the sophistication point holds.”
For advisers, nationality is only part of the equation. A family may have members living in several countries, businesses operating across Asia, trusts governed by offshore law and assets whose ownership is affected by mainland Chinese matrimonial and inheritance rules.
“The tension is primarily between mainland civil law thinking and common law jurisdictions,” says Ip. “The PRC Civil Code matters enormously. Marital property, community of property concepts do not disappear because a trust is governed by Cayman law. Firms that cannot engage with those inflections are structuring in a vacuum.”
Why Hong Kong is Asia’s “divorce capital”
The interaction between family law and wealth planning has helped Hong Kong develop another, less widely discussed, private client specialism.
“Hong Kong remains the ‘divorce capital’ of Asia,” says Ip. “Any party in divorce proceedings on the claimant side of the ancillary relief part will choose Hong Kong rather than another jurisdiction such as China for the same reason that London has always been regarded as a ‘divorce capital’, and it is understandable given its proximity with London in terms of the structure of the divorce regime.”
The comparison matters because Hong Kong’s matrimonial law is rooted in a common law system familiar to international families and advisers. High-value divorce cases can require courts and lawyers to examine trusts, company ownership, inherited assets and arrangements spread across several jurisdictions.
The same assets that form part of succession or tax planning may later become relevant in a divorce, a probate dispute or a disagreement between beneficiaries. These questions cannot therefore be treated in separate legal compartments.
A Cayman trust may be valid under Cayman law, but that does not make mainland Chinese marital-property rules irrelevant. Equally, a succession plan designed without considering divorce, family claims or the residence of beneficiaries may protect less than its creators intended.
In this respect, the growth opportunity for Hong Kong is not simply the administration of more assets. It is the demand for professionals able to connect trust, probate, tax and family law across common law and civil law jurisdictions whilst understanding also The PRC Civil Code.
Hong Kong wealth spreads across jurisdictions
The movement into second-generation planning is also changing where families invest, establish residence rights and place different parts of their wealth.
“Hong Kong’s continued growth as a global wealth hub is creating opportunities well beyond just Hong Kong,” says Dominic Jones, managing director of Greener Pastures New Zealand.
“What we are seeing among high-net-worth families across China and the entire region is a growing focus on diversification. This is not just across asset classes, but jurisdictions as well. Families are continuing to view Hong Kong as a key financial and business centre while still looking to markets like New Zealand for investment, residency and greater geographic optionality.
“That interest is already showing up in the numbers. China and Hong Kong together account for 301 applications to New Zealand’s Active Investor Plus visa since the programme was revamped in April 2025, representing nearly a third of all applications.
“The recent regulatory changes that took place in China are adding another consideration to that planning. The government is increasing oversight of cross-border activity. This is encouraging wealthy families to think more carefully about where they invest, where they establish residency rights and what opportunities they want available to the next generation.
“That does not necessarily mean moving away from China or Hong Kong. It does mean building a more diversified international footprint, and we are seeing New Zealand become part of that conversation.”
Ip sees a similar pattern in other centres but says the jurisdictions serve different purposes rather than competing for an entire family relationship.
“Dubai, Cayman and BVI serve different purposes: Dubai for regional presence; Cayman and BVI for structural flexibility. On the political dimension, families are diversifying precisely to manage concentration risk, whether Beijing or Temasek.”
Hong Kong’s growth, in other words, does not keep every part of a family’s affairs within the territory. A relationship managed from Hong Kong may produce trust and corporate work in Cayman or the BVI, investment and residence activity in New Zealand, an operational presence in Dubai and business holdings across mainland China and Southeast Asia.
Digital fortunes move into the regulated system
The source of the wealth is changing too. Lisa Wu, managing partner of Synergy Consulting Group, says the record figures are being treated as a story about quantity when the composition of the assets may be more important.
“The record HK$42.2 trillion is being read as a volume story, but from what I am seeing, the more interesting shift is in composition. The SFC’s 2025 asset and wealth management survey, published in July, put total AUM up 20% to that record, with private banking and private wealth management assets rising 24% to HK$12.9 trillion.
“In our work with founders, family offices and investment businesses, we are seeing more wealth that was created in technology and digital assets, and some of it is still held in those forms. For me, that creates one of Hong Kong’s biggest commercial opportunities. The city’s regulated digital-asset regime, including the stablecoin framework, is a chance to bring more of that activity inside a supervised perimeter.
“My concern is that firms are onboarding faster than they are building the expertise needed to service those assets properly. In practice the questions are not complicated: who owns the asset, where is it held, on what terms can it be recovered, and what happens if the intermediary fails? The questions are old; the assets are new.
“Volume, speed and unfamiliar asset classes in combination is where I would expect the first failures to surface, particularly around onboarding, beneficial-ownership diligence and coordinating structures across jurisdictions. At SCG, we have grown headcount rather than opened more offices because, from our experience, the constraint is expertise rather than presence. Much of that capability has to be built rather than simply hired.”
Wu says Hong Kong’s rise is already producing work throughout the international financial system.
“We are also seeing Hong Kong’s growth create more business outside Hong Kong, not less. Across the 500-plus client entities our group helps manage, structures extend through the BVI, Cayman Islands, Singapore and the UAE, while operating businesses may sit in Europe, Southeast Asia, Singapore, the US and elsewhere.
“In our experience, a Hong Kong family office relationship often creates work across several other jurisdictions because the fund, holding vehicles and operating companies do not all sit in the same place. Our global work has grown alongside Hong Kong for precisely that reason. The wealth may book in Hong Kong, but the activity disperses.”
“Looking further ahead, I think the biggest opportunity is generational. Many of today’s fortunes were created by founders who are still running the businesses that produced them. The next generation will not necessarily distinguish ‘digital wealth’ from wealth. My view is that the firms which learn how to govern, custody and structure those assets now will be the ones still holding those relationships a decade from now.”
The generational point brings the story back to Announcement 21. Digital assets do not sit outside family ownership, succession or tax merely because they are technologically new. They still need an identifiable owner, an appropriate custodian, reliable records and a plan for control or transfer if the founder dies, loses capacity or becomes resident somewhere else.
Companies seek capital without opening everywhere
The opportunities created by Hong Kong’s growth are not confined to private clients. Businesses raising capital or expanding internationally are also looking for structures that connect Hong Kong with other Asian and offshore markets.
Mark Cummings, a partner in Walkers’ Global Corporate and Investment Funds Group in Hong Kong, advises on investment funds, mergers and acquisitions, joint ventures, capital markets and Cayman and BVI special-purpose structures.
“Hong Kong’s recent growth highlights its continued importance as a gateway between international and Asian capital,” he says. “Beyond the headline numbers, one of the key opportunities is the increasing sophistication of businesses seeking to raise capital, expand into new markets and structure operations across multiple jurisdictions.
“We’re seeing companies take a long-term view of growth, with a focus on access to capital, investor confidence and the flexibility to pursue strategic opportunities as they arise. While competition for talent and resources will remain a feature of any expanding market, a strong ecosystem of advisers, financial institutions and investors continues to support Hong Kong’s position as a leading international financial centre and an important platform for business growth across Asia.”
Cummings says these flows connect Hong Kong with mainland China, other Asian economies and international financial centres rather than pointing to one destination. The activity is also spread across sectors.
“We’re seeing interest across a broad range of sectors rather than any single industry. This includes businesses operating in areas such as technology, artificial intelligence, biotechnology and pharmaceuticals, alongside more established sectors that continue to pursue regional and international growth strategies. The common theme is a desire for flexibility, access to capital and the ability to support growth across increasingly international operations.”
Nor does expansion necessarily require advisers or businesses to open a physical office in every market they serve.
“Growth does not necessarily mean firms need to establish offices in every market. Increasingly, clients are looking for advisers with strong regional capabilities and experience coordinating cross-border matters. The focus is often on providing seamless advice across jurisdictions rather than simply expanding physical footprints.”
Wei Ching Teo, a partner in Walkers’ Investment Funds and Corporate team in Hong Kong, advises private equity and hedge fund managers on formation, regulation, governance, acquisitions, disposals, restructuring and end-of-life solutions. She has also advised high-net-worth individuals and corporate trustees on succession, inheritance, trusts and corporate structures.
“Hong Kong’s continued growth as an international financial centre reflects its ability to connect capital, businesses and private wealth across Asia and beyond,” she says. “As wealth creation in the region evolves, we expect clients to remain focused on sophisticated cross-border structuring and corporate governance that support long-term objectives in the context of succession planning and investment opportunities.
“The opportunity extends beyond Hong Kong itself. Increased activity is driving demand for advice and services across a range of investment hubs and Asian markets, creating a more interconnected regional ecosystem. While growth inevitably brings pressure on talent and service delivery, firms with regional or multi-jurisdictional capabilities that combine deep technical expertise with a strong focus on client experience will be best placed to support clients as their needs become more complex and international in nature.”
Teo identifies Singapore, Malaysia and mainland China among the markets connected to the Hong Kong opportunity.
“The point is less about any one location and more about the broader regional ecosystem that supports international investment and private wealth. As activity grows in Hong Kong, there are often related opportunities across other established financial centres and investment hubs in Asia, such as Singapore, Malaysia and mainland China, particularly where families, investors and businesses have cross-border interests.”
“This reflects the increasingly international nature of wealth planning, investment and governance rather than a concentration of activity in a single market.”
Selling Hong Kong beyond finance
The Hong Kong government is promoting the territory’s broader business and lifestyle proposition alongside its financial success. Its 2026-2030 development plan places culture, sport and tourism within a strategy intended to attract businesses, visitors and talent.
According to figures released by the Hong Kong government in September, the territory received 36.67 million visitors during the first eight months of 2026, an increase of about 11% from the previous year. More than 20% of overseas visitors continued from Hong Kong into mainland China during the first half of the year, supporting the government’s effort to market the city as part of a wider multi-destination trip.
The programme includes cultural events, “Film + Tourism” services for overseas and mainland production companies, yacht links with Greater Bay Area cities and further development around Kai Tak Sports Park. The government says Kai Tak has hosted more than 170 sports, cultural and entertainment sessions, attracting more than 2.6 million spectators.
The strategy matters to the wealth industry because international financial centres compete for more than assets. Families also consider residence, education, travel connections, cultural life and the ability to operate businesses across several markets. Hong Kong’s pitch rests on combining those attractions with access to mainland China and a common law legal system.
A7 brings a different form of scrutiny
While Announcement 21 is the immediate private client concern, a separate story has raised questions about Hong Kong’s role in international payment flows.
A7 is alleged to be a Kremlin-backed payments network that helped Russian businesses continue moving money internationally despite Western sanctions. Investigators reportedly identified significant flows passing through accounts at major international banks in Hong Kong.
The allegation is not that the banks knowingly facilitated sanctions evasion. The claim is that A7 used front companies, forged trade documentation and shell structures to make transactions appear legitimate. Investigations suggest more than US$6.9 billion moved through the international banking system in this way, with leaked material reportedly showing that many payments ultimately reached Chinese bank accounts.
The wider issue is Hong Kong’s position as one of the world’s largest trade and financial centres, particularly for transactions connected to China. The case is likely to intensify scrutiny from US, UK and European regulators, strengthen demands for due diligence in trade finance and increase attention on the use of intermediaries to circumvent sanctions.
As one City commentator put it: “In many ways, it is a story about the challenge facing Hong Kong itself: balancing its status as a leading global financial centre and gateway to China while operating in an environment of increasing geopolitical tension and sanctions enforcement.
“It struck me as a fascinating example of how financial crime continues to evolve and how criminals look for vulnerabilities in even highly regulated markets and then exploit global payment systems.”
Ng’s assessment is that A7 will have less immediate effect on Hong Kong’s mainstream wealth-planning market than Announcement 21. The two developments nevertheless show different sides of the scrutiny surrounding international capital: one concerned with tax and offshore trusts used by mainland Chinese families, the other with sanctions, trade finance and the movement of money through global banking networks.
From creating wealth to deciding what happens next
Hong Kong’s rise above Switzerland is a significant marker for Asian wealth management. The city now books US$2.9 trillion in cross-border wealth, while its wider asset-management industry has reached record levels.
But the expert comments suggest that the opportunity is being misunderstood when it is presented solely as a first-generation Chinese wealth-creation story.
Entrepreneurs are still creating substantial fortunes, including in technology and digital assets. At the same time, many families advised through Hong Kong have already reached the second generation or experienced an earlier succession. They are dealing with inheritance, family governance, divorce, residence, tax and the division of assets across different legal systems.
Announcement 21 makes that shift more immediate. The first task for some families is no longer deciding whether they should create an offshore trust. It is determining how an existing trust is treated under mainland Chinese tax law, whether historic income or transfers must be declared and how a liability can be calculated and paid before 22 October.
Hong Kong’s position close to mainland Chinese wealth, combined with its common law system and international advisory sector, leaves it well placed to handle that work. The commercial opportunity is considerable, but so is the pressure on firms to provide advice that reflects the family’s tax residence, marital-property position, offshore structures, digital assets and next generation. The rest of the world may still see China chiefly as a market of first-generation wealth creators. In Hong Kong, the work is increasingly more entrenched than the rest of the world perceives.
Key Takeaways
- Hong Kong surpasses Switzerland as the largest global centre for cross-border wealth, with cross-border assets reaching US$2.9 trillion in 2025.
- The implementation of new tax rules on offshore trusts in mainland China complicates wealth transfer for families using Hong Kong.
- Many families are grappling with second-generation wealth issues, including inheritance and governance under varying legal systems.
- Despite rising regulatory scrutiny, Hong Kong remains a crucial hub for wealth management and capital flow in Asia.
- The government’s development plan aims to enhance Hong Kong’s appeal beyond finance by promoting culture and tourism.
Karen Jones is the founder of Citywealth and a wealth management commentator with more than 20 years’ experience across global private wealth, family offices and succession. Before founding Citywealth in 2005, she held publishing roles at The Times and The Sunday Times, London; Legal Business magazine and worked on the Asia Pacific Legal 500.
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