PRESS RELEASE

(Source : Information Services Department)

     Following is a question by the Hon Grace Chan and a reply by the Acting Secretary for Financial Services and the Treasury, Mr Joseph Chan, in the Legislative Council today (May 27):
 
Question:
 
     In recent years, "venture philanthropy" and impact investing have gradually emerged as new forms of philanthropic and social investments, and last year's Policy Address also proposed to encourage family offices to implement projects that benefited the disadvantaged groups. In this connection, will the Government inform this Council:
 
(1) apart from tax deductions for charitable donations, whether the Government will consider providing tax concessions for enterprises or family offices that engage in philanthropy in other forms (e.g. venture philanthropy, investment in social enterprises or impact investing); if so, of the details; if not, the reasons for that;
 
(2) apart from the "Co-build a Caring Society Funding Scheme" proposed in last year's Policy Address, of the specific measures put in place by the Government to promote engagement in philanthropy by family offices and assist them in connecting with local charitable institutions; if it has not formulated or has no plan to introduce relevant measures, of the reasons for that; and
 
(3) as there are views that issues on "environmental, social and governance" are gaining increasing attention from the business sector, whether the Government will step up efforts to promote diversified philanthropic models relating to social services, such as impact investing and venture philanthropy, as well as relevant talent training; if so, of the details; if not, the reasons for that?
 
Reply:
 
President,
 
     There is no standardised definition in society for "venture philanthropy" and impact investing. According to a relevant research report by the Financial Services Development Council (FSDC) in 2024, impact investing is a form of sustainable investing that integrates social and environmental good alongside investment returns as priorities, with a dual focus on financial return and impact being its key feature. To support the development of different philanthropic models, the Government has all along implemented a range of measures, including providing tax exemption to eligible charitable organisations, facilitating the deployment of charitable capital in Hong Kong through relevant tax arrangements, promoting multi-stakeholder collaboration to strengthen the social support system for vulnerable groups, supporting social entrepreneurs to address social needs through innovative solutions, etc, thereby strengthening social cohesion. Regarding the three parts of the question, in consultation with the Home and Youth Affairs Bureau, the Labour and Welfare Bureau, the Digital Policy Office, the Inland Revenue Department (IRD) and the Hong Kong Academy for Wealth Legacy (HKAWL) under the FSDC, the reply is as follows.
 
(1) Under section 88 of the Inland Revenue Ordinance (Cap. 112) (IRO), charitable institutions are exempt from profits tax (i.e. tax-exempt charitable institutions) subject to the fulfilment of certain conditions in relation to the trade or business carried on by them. To qualify as a tax-exempt charitable institution, the object of the institution must be a solely charitable purpose at law, and the institution must be established for public benefit. To facilitate charitable institutions' application for tax exemption pursuant to section 88 of the IRO, the IRD launched a standard application form and issued guidelines on the drafting of charitable objects in June 2023, so as to assist institutions in preparing compliant application materials, thereby shortening the time required by the IRD to process the applications. Charitable donations made by a taxpayer (including family offices (FOs), as well as companies which engage in "venture philanthropy" and impact investing) to any tax-exempt charitable institution (i.e. approved charitable donations) are deductible from the assessable profits under profits tax, net assessable income under salaries tax, or total income under personal assessment for a year of assessment, provided that the aggregate amount is not less than $100. The total deduction allowable in any year cannot exceed 35 per cent of the donor's assessable profits or income.
 
     On the other hand, to facilitate the deployment of charitable capital in Hong Kong by global asset owners, FOs and philanthropists, the Government has introduced relevant tax arrangements, such as allowing exempt charitable organisations to hold up to 25 per cent beneficial interest in eligible single FOs and/or their family-owned investment holding vehicles (FIHVs) under the existing concessionary tax regime for FIHVs. The Government also proposes to broaden the definition of "fund" under the unified tax regime for funds to include endowment funds, so as to facilitate these funds to utilise the tax exemption regime.
 
(2) and (3) The Financial Services and the Treasury Bureau issued the Policy Statement on Developing Family Office Businesses in Hong Kong in March 2023, setting out the policy stance and measures on developing a vibrant ecosystem for global FOs and asset owners. Among the measures is the HKAWL established under the FSDC, which provides a platform for collaboration, networking, knowledge sharing and talent development for asset owners, wealth inheritors and the FO sector. The HKAWL launched its flagship philanthropic initiative, Impact Link, in March 2024 and has since organised 17 workshops and seminars for over 700 family participants to encourage them to explore and develop philanthropic initiatives. In June 2025, the HKAWL further introduced the Impact Link Online Portal, a dedicated depository platform for invited family philanthropists to discover scalable impact investing initiatives in Hong Kong and other regions. As of end-March 2026, the portal has been joined by 55 family philanthropists, which altogether nominated 12 non-governmental organisations and charitable projects.
 
     On social welfare, the Government actively fosters tripartite collaboration among the Government, the business sector and the community. Under the policy guidance of the Government, the business sector offers support in terms of funding, premises, technology and talent, while non-governmental organisations contribute their strengths in frontline insights, service experience and district networks, jointly promoting and implementing service projects, and to work together to build a more diverse, pluralistic and sustainable social support system. Over the past few years, the Government has launched targeted poverty alleviation schemes under the above collaboration model, including the Strive and Rise Programme, the Pilot Programme on Community Living Room and the School-based After School Care Service Scheme. These projects have achieved remarkable results, reflecting an organic integration of "a capable government" and market forces, and have enabled philanthropic resources in society to generate greater benefits. The Government will continue to support vulnerable groups through the tripartite collaboration among the Government, the business sector and the community, including establishing a platform to encourage FOs involved in philanthropic endeavours to provide resources for implementing projects that benefit disadvantaged groups.
 
     In addition, the Government launched the Social Innovation and Entrepreneurship Development Fund (SIE Fund) in 2013, aiming to connect different sectors of the community, including businesses, non-governmental organisations, academics, philanthropies, etc to address poverty and social exclusion as well as foster the well-being and cohesion of society through innovative solutions. The SIE Fund supports the entire life cycle of innovative ventures, from supporting idea incubation, providing seed funding for implementing prototype and start-up projects, to assisting their eventual scale-up. The ultimate goal is to foster the development of the social innovation ecosystem where social entrepreneurs can thrive and potential talents can be unleashed to develop innovative ideas, products and services that can effectively meet social needs. With a total allocation of $1 billion, around $800 million has been earmarked or allocated to take forward various initiatives since its establishment. The SIE Fund has funded 755 projects, benefitting around 600 000 people in need. To optimise the use of resources and operations, the SIE Fund has appointed a consultant to conduct a strategic review on its funding mechanism and operational approach. The review will be completed by end-2026.
 
     Thank you, President.