Hong Kong excludes proprietary trading firms from tax concessions on carried interest

Hong Kong just drew a clear line in the sand. Proprietary trading firms, no matter how large or influential, will not benefit from the city’s proposed 0% tax concession on carried interest and performance fees. The Financial Services and the Treasury Bureau made the announcement on August 12, clarifying that remuneration earned through proprietary operations simply doesn’t qualify. For firms like Jane Street, Citadel Securities, and Jump Trading, which trade with their own capital rather than managing outside money, the message is straightforward: you’re not a fund, so you don’t get fund tax breaks. What the tax regime actually does The exclusion is part of a broader legislative push called the Inland Revenue (Amendment) (Preferential Tax Regimes for Funds, Family-owned Investment Holding Vehicles and Carried Interest) Bill 2026. It was introduced to Hong Kong’s Legislative Council in June 2026, with a second reading expected later this year. The bill’s intent is to expand Hong Kong’s existing carried-interest tax regime, which was first introduced in 2021 specifically for private equity. That original framework offered a 0% profits tax rate on eligible carried interest. The new bi...