The long-awaited limited partnership fund regime in Hong Kong



The Limited Partnership Fund Ordinance (Cap. 637) (the “Ordinance”), which will take effect on 31 August 2020, introduces a new legal structure for private funds to be established in the form of limited partnerships in Hong Kong (the “New Regime”). In this article, we will walk you through the key features of the New Regime and highlight the major differences between a Cayman exempted limited partnership (the “ELP”) and a Hong Kong limited partnership fund (the “LPF”).

Key features of the New Regime


Key features of the New Regime

Meaning of a LPF

A LPF is an arrangement in respect of any property registered as a limited partnership fund under section 12 the Ordinance, where such arrangement is managed as a whole by, or on behalf of, persons operating the arrangement, and the contribution of persons participating in the arrangement, and the profits and incomes from which payments are made to them, are pooled.

Legal personality

The LPF is not a legal person.


General Partner   (“GP”)

·         Responsible for the management and control of the LPF.

·         Only one GP which may be an individual, a Hong Kong private company, a registered non-Hong Kong company, or a domestic or offshore limited partnership.

·         With unlimited liability for all debts and obligations of the LPF.

Limited Partner    (“LP”)

·         Investors who contribute capital to the LPF.

·         At least one LP, which may be an individual, a corporation, a partnership, an unincoporated body, or any other entity or body.

·         With liability limited to the amount agreed to be contributed by the LP if such LP takes no part in the management of the LPF. Certain activities are explicitly excluded in Schedule 2 of the Ordinance to be regarded as management of the LPF, including but not limited to serving on a board or investment committee of the LPF, taking part in a decision of admission or withdrawal of a partner and advising or approving the GP or IM on business, accounts, valuations.

*please note that not all partners (including GP and LP) are corporations in the same group of companies.

Investment Manager   (“IM”)

·         To carry out day-to-day investment management activities of the LPF.

·         GP must appoint in the capacity of the LPF an IM (who may be the GP itself). An IM has to be a Hong Kong resident who is at least 18 years old, a company, or a registered non-Hong Kong company.


Qualified auditor should be appointed to carry out annual audits of financial statements of the LPF.

Custodian (optional)

·         The GP shall ensure proper custody arrangement for the assets of the LPF.

·         Not required to appoint a custodian under the Ordinance. However, if the GP/IM is licensed by SFC to carry out Type 9 regulated activity (asset management),  the SFC’s Fund Manager Code of Conduct will apply and the GP/IM shall (i) exercise due skill, care and diligence in selecting and appointing an independent custodian, or (ii) if self-custody is adopted, the GP/IM shall ensure it has policies, procedures and internal controls in place to separate the custodial functions from the fund’s management functions.

·         The custodian should be (a) a registered trust company, (b) an authorised financial institution or subsidiary of a licensed bank, (c) a banking institution or trust company outside Hong Kong that is subject to prudential supervision, or (d) any other appropriately qualified institution.

Authorized Representative (“AR”)

If the GP is (a) another LPF or (b) a non-Hong Kong limited partnership fund without a legal personality, an AR should be appointed for the management and control of the LPF.

Responsible Person for AML/CFT measures (“RP”)

A RP should be appointed to carry out measures under Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615). No person may be appointed as a RP unless such person is an authorised institution, a licensed corporation, an accounting professional or a legal professional.

Registration of a LPF

Administration Authority

Hong Kong Companies Registry (“CR”).

Application submission

The application for a LPF registration must be submitted on behalf of the GP by a Hong Kong solicitor or law firm.

Registration Certificate

A certificate of registration of LPF will be issued by the CR upon completion of registration and is conclusive evidence that the fund is registered as an LPF.

Business Registration  

GP must also apply for a business registration certificate for the LPF within 1 month after the registration date of the LPF.

SFC registration or authorisation

The LPF is not required to be registered or authorised by SFC unless it is offered to non-professional investors.

Operation of a LPF

Minimum Capital Requirement

There is no statutory minimum capital requirement.

Investment Restrictions

There is no statutory investment restriction.

Registered Office

The LPF must have an office in Hong Kong to which communications and notices may be sent.

SFC licence

To carry out regulated activities in Hong Kong, either the GP or the IM must be licensed by the Securities and Futures Commission of Hong Kong (“SFC”). Should you need advice on obtaining a SFC licence, please feel free to contact us.

Withdrawal of Capital Contribution

Only permitted if the LPF remains solvent following such withdrawal.

Distribution of profits and assets

Only permitted if the LPF remains solvent following such distribution.

Filing of Annual Return

GP must file an annual return with CR within 42 days after each anniversary of the date on which the LPF’s certificate of registration is issued.

Filing of notification of certain changes

A notification of change together with the specified fees (if applicable) should be filed for any reportable changes relating to the LPF.


Disclosure of information of the LPF  

·         Disclosable information includes (i) name, address of the registered office and principal place of business of the LPF; (ii) investment scope of the LPF; and (iii) name and particulars of the existing and former GP, IM, RP and/or AR of the LPF.

·         Non-disclosable information (records kept at LPF’s registered office or any other place made known to CR and may be inspected by Government Authorities only) include (i) register of partners; (ii) audited financial statements of the LPF; (iii) documents, records and files of customers of the LPF for AML/CTF purpose; (iv) documents and records of each transaction carried out by the LPF; and (v) controller of each of the partners in the LPF.

·         Limited partnership agreement is not required to file with the CR.

Winding up

·         The LPF may be dissolved without a court order.

·         The LPF may also be liquidated as an unregistered company for the purposes of Companies (Winding Up and Miscellaneous Provision)(Cap. 32), that means a creditor and a partner may present a winding up petition to the Court in Hong Kong.

Stamp duty

·         The partnership interest of the LPF will not be considered as “stock” so no stamp duty is chargeable for any transfer, contribution or withdrawal of partnership interest in cash or for a cash consideration.

Profit tax

·         The LPF should not incur Hong Kong profits tax on qualifying income earned by it if it satisfies all of the conditions set out in the Unified Fund Tax Exemption regime under IRD practice note DIPN 61.

·         While qualified LPFs may enjoy profits tax exemption, Hong Kong-based managers or advisors arranging or conducting the specified transactions remain chargeable.

·         The Government also plans to offer tax concessions for carried interest issued by LPF operating in Hong Kong, subject to fulfilment of certain conditions.

Major differences between a Cayman ELP and a HK LPF

The “Cayman ELP” in the table below refers to such fund registered under the Cayman Islands’ Private Funds Law, 2020 (the “PF Law”).Please note that most of the existing Cayman ELPs are required to register under the PF Law and are subject to the regulation of the PF Law. The most common exemption is a fund with one investor only.


Cayman ELP



At least one (1).

One (1) only.

Appointment of AR


Yes if the GP is (a) another LPF or (b) a non-Hong Kong LPF with no legal personality.

Custody arrangement for fund’s assets

Proper custody arrangement is required so either a custodian or a person for assets’ title verification should be appointed.

Proper custody arrangement is required but not a must to appoint a custodian.

Valuation of assets

Yes (at least annually).

Not required, but recommended.

Financial statements

Annual audit is required and submission of audited financial statements to the Cayman Islands Monetary Authority (“CIMA”) is required within 6 months of the relevant financial year end.

Annual audit is required but not necessary to submit an audited financial statements with CR.

Official registration fees and annual maintenance fees charged by the relevant authority

More expensive.


·      Formation & Initial registration fees

Around USD20,000, including but not limited to:-

·         Initial ELP registration fee - USD1,900.

·         Annual economic substance notification - USD 450-500.

·         Initial private fund registration and filing fee - USD4,634.

·         Filing of limited partnership agreement - USD366.

HKD3,034                          (HKD2,555 is refundable if the application is unsuccessful).

·      Annual maintenance fees

·         Government fee - USD2,440.

·         Annual economic substance notification - USD 450-500.

·         Annual private fund registration fee – USD4,268.

·         Cayman GP – USD9,000.

Annual return filing - HKD105.

·      Notification of reportable changes 

·         Around USD366 for filing of each updated document with CIMA.

·         Around USD500 for notifying CIMA of any change of directors of the General Partner.

·         HKD26 for each reportable change, such as change in address, location of records and investment scope of the LPF; change of identity, or particulars of GP/AR/IM/RP, etc.


The introduction of the New Regime is going to strengthen the edge of Hong Kong as an international asset management hub and will foster the growth of our local private equity industry. We shall keep a close eye on the implementation of the New Regime starting on 31 August 2020 and will keep you updated when there is future development of the New Regime. For those who are interested in exploring the New Regime, please do not hesitate to contact us.

For enquiries, please feel free to contact us at:

E:                                             T: (852) 2810 1212

W:                                          F: (852) 2804 6311

19th Floor, Three Exchange Square, 8 Connaught Place, Central, Hong Kong

Important: The law and procedure on this subject are very specialised and complicated. This article is just a very general outline for reference and cannot be relied upon as legal advice in any individual case. If any advice or assistance is needed, please contact our solicitors.

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