Middle East investors turn to Hong Kong amid regional tensions

Middle East banks and wealthy investors are increasing interest in Hong Kong as a safe haven amid geopolitical tensions, according to Alpha Lau Hai-suen, director general of InvestHK, the city’s foreign investment promotion agency.

“A couple of Middle East banks were in the process of setting up offices in Hong Kong with the help of InvestHK,” Lau said, noting that only four of more than 150 licensed banks in the city are currently based in the Middle East, South China Morning Post reports.

“The Middle East money has already shown interest in Hong Kong for some time,” she added. “Recently, I have seen that there are even more practical inquiries as people look to set up operations in Hong Kong.”

Lau cited security concerns as a key factor, pointing to threats from Iran against financial institutions in the region.

“These banks saw Hong Kong as a ‘safe haven’. The city was far away from the war zone and also offered many opportunities for banks and investors, as it served as a gateway to mainland China and other parts of Asia, with low taxation and sound regulation,” she said.

InvestHK is also promoting Hong Kong as a hub for family offices managing wealth, philanthropy, and succession planning. Lau highlighted the upcoming fourth annual Wealth for Good in Hong Kong Summit on March 17, expected to attract over 300 high-net-worth executives.

“It is already the fourth year for Wealth for Good, which has been quite successful,” Lau said. “The annual closed-door meeting allows the attendees to exchange views not only on investments, but also on philanthropy or alternative investments.”

Hong Kong has introduced measures including tax exemptions and investment migration schemes to boost family office activity. At the end of last year, the city hosted 3,380 family offices, a 25% increase over two years, according to Deloitte. Lau said proposed new exemptions and expanded gold storage would further strengthen Hong Kong’s position as a regional investment hub.

By Sabina Mammadli