Hong Kong is weighing tax concessions for proprietary trading firms such as Jane Street and Citadel Securities as it races Singapore for financial talent.
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Hong Kong's 2026 tax bill widens carried-interest breaks to prop firms
Hong Kong is weighing amendments to a 2026 tax bill that would extend carried-interest concessions to proprietary trading firms such as Jane Street and Citadel Securities, part of a push to defend its standing as an international financial center against Singapore.
The government is considering changes to the Inland Revenue (Amendment) (Preferential Tax Regimes for Funds, Family-owned Investment Holding Vehicles and Carried Interest) Bill 2026 to clarify that traders at proprietary firms qualify for the concessions, according to the Financial Times, citing people familiar with the matter.
The bill, gazetted in June 2026, treats a broader range of investment profits as carried interest for tax purposes rather than limiting the treatment to private equity transactions. Managers at hedge funds, private equity firms, venture capital firms, private credit firms and family offices could cut their tax burden further. The reform effectively widens the pool of compensation eligible for preferential rates, lowering the effective tax cost of running trading and investment operations out of Hong Kong.
The stakes are high for Hong Kong, which is competing with Singapore, itself planning similar concessions. Proprietary trading firms have become emerging giants on Wall Street. Jane Street last year leased six floors in Phase 1 of Henderson Land's New Central Harbourfront flagship project at a monthly rent of $4 million, while Citadel Securities is reportedly expanding its Hong Kong business.
The Singapore rivalry
Hong Kong's move comes as Singapore prepares its own tax concessions to attract funds and family offices, intensifying a long-running contest between Asia's two premier financial hubs. The carried-interest expansion is designed to make Hong Kong more attractive to the managers who allocate capital across hedge funds, private credit and venture strategies. By broadening the definition of carried interest beyond private equity, the reform targets the compensation structures that drive hiring decisions at global trading firms.
The two cities have traded the lead in asset management for years, with Singapore drawing family offices and Hong Kong anchoring the region's equity and derivatives markets. A tax regime that covers proprietary trading would give Hong Kong a distinct edge in a segment where Singapore has been slower to offer concessions, potentially shifting where global trading desks choose to book risk and hire staff.
Real estate and talent spillover
The reform could also lift demand for prime commercial space. Jane Street's $4 million monthly lease at Henderson Land's New Central Harbourfront — among the city's most expensive office deals — shows how tax policy translates into physical footprint. Citadel Securities' reported expansion points to more hiring in the city. For developers such as Henderson Land, whose shares trade on the Hong Kong exchange, a deeper pool of global financial tenants would support occupancy and rents across the central business district.
If the amendments pass, Hong Kong would strengthen its position as a destination for global trading and asset-management talent, potentially drawing more firms and capital away from Singapore. The bill's passage through the Legislative Council, expected later this year, will determine whether the city converts its tax advantage into durable market share.
This article is for informational purposes only and does not constitute investment advice.
