A Limited Partnership Fund (LPF) is an open-ended fund vehicle introduced under the Limited Partnership Fund Ordinance (Cap. 637), which came into force in August 2020. An LPF is formed by registration with the Companies Registry and must have at least one general partner (GP), who bears unlimited liability and manages the fund, and one limited partner (LP), whose liability is capped at the amount of their capital contribution. The LPF structure has become the preferred on-shore vehicle for private equity and venture capital managers in Hong Kong because it offers flexibility in structuring carry, distributions, and side pockets, while benefiting from the territory's tax efficiency and robust legal framework. Unlike a company, an LPF is not subject to profits tax in its own right — taxation flows through to individual partners. Managers seeking to qualify for the Unified Fund Exemption should ensure the fund's investment activities meet the prescribed conditions under the Inland Revenue Ordinance.

An Open-Ended Fund Company (OFC) is a corporate fund structure governed by the Securities and Futures Ordinance (SFO) and the Companies Ordinance, introduced in 2018 and further expanded to private OFCs in 2021. Unlike an LPF — which is organised as a limited partnership — an OFC is a company whose shares are fully redeemable at the holder's option, making it well suited to open-ended strategies such as hedge funds and long-only equity funds. A private OFC need not be authorised by the SFC but must appoint an SFC-licensed entity as its investment manager and custodian. A public OFC requires SFC authorisation under the SFO. The key practical difference from an LPF is governance structure: OFCs have a board of directors and are subject to company law obligations, whereas LPFs have GP-controlled management and a contractual limited partnership agreement. Both structures benefit from Hong Kong's Unified Fund Exemption from profits tax.

Yes, in most cases. Any person who carries on a business of managing a collective investment scheme or discretionary portfolio of securities or futures contracts in Hong Kong must be licensed under the Securities and Futures Ordinance (SFO). Managing a fund that invests in securities requires a Type 9 (asset management) licence; a fund that trades futures or derivatives may also require a Type 4 (advising on securities) or Type 5 (advising on futures) licence, depending on the activities carried on. There are limited carve-outs — for example, a GP of an LPF that delegates all investment management to an SFC-licensed sub-manager — but these exemptions are narrow and fact-specific. Managers of virtual asset funds require Type 9 licensing with specific SFC approval for VA exposure. Carrying on a regulated activity without a licence is a criminal offence under section 114 of the SFO, with penalties including fines and imprisonment.

Timeline depends on the vehicle type and whether SFC licensing is required. Registration of an LPF with the Companies Registry typically takes two to four weeks once all formation documents — including the limited partnership agreement and prescribed registration form — are in order. A private OFC registration follows a similar timetable. Where the fund manager does not yet hold an SFC licence, the licensing process adds material time: a straightforward Type 9 application currently takes three to six months from submission to approval, though the SFC may take longer for complex structures or where queries arise. If the manager already holds a relevant SFC licence and requires only a variation of conditions or a new fund approval, the incremental approval process is considerably faster. Parallel-tracking the fund documentation and licensing application — with experienced legal counsel coordinating both workstreams — is the most effective way to compress the overall timeline to a first close.

Yes. Both the LPF and private OFC are widely used by family offices to consolidate and deploy family capital in a structured, tax-efficient manner. An LPF is particularly attractive for co-investment arrangements, direct private equity investments, and structures where different family members or branches hold economic interests as limited partners. The OFC is commonly used where a corporate governance framework is preferred, or where the family intends to run sub-funds for different asset classes or generations under a single umbrella. Under the Unified Fund Exemption, both vehicles can qualify for profits tax exemption on investment gains, subject to meeting the prescribed conditions — including the requirement that the investment manager be an SFC-licensed entity. Family offices with a single-family mandate may also qualify for the single family office exemption from SFC licensing under certain conditions, which should be assessed carefully in light of the specific management arrangements.

A private fund marketed to professional investors in Hong Kong will typically require a suite of offering and subscription documents. The cornerstone document is the Private Placement Memorandum (PPM) or Offering Memorandum, which discloses investment strategy, risk factors, fees, governance, redemption terms, and regulatory information. For an LPF, the Limited Partnership Agreement (LPA) governs the relationship between the GP and LPs and sets out economic and governance terms in detail. Subscription agreements and investor questionnaires are used to collect anti-money laundering (AML) and know-your-client (KYC) information required under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO) and the SFC's AML guidelines. Side letters may be negotiated with anchor or strategic investors. For funds marketing to Hong Kong investors — even if domiciled offshore — the SFC's requirements on marketing materials and investor eligibility under the SFO must be observed, including confirmation that investors qualify as professional investors under section 1 of Part 1 of Schedule 1 to the SFO.