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Fund Structure of Limited Partnership in Hong Kong 


The LPF regime was set up by the Limited Partnership Fund Ordinance (Chapter 637 of the Laws of Hong Kong) (LPFO). Similar to an Exempted Limited Partnership (ELP) in the Cayman Islands, an LPF does now no longer have a separate legal character. It acts via its general partner (GP). The LPF is basically for private equity and venture capital funds. 

An LPF is set up through a limited partnership agreement. The security of the limited liability status of limited partners and the flexibility of contractual terms of an LPF are just like that of an ELP. However, in contrast to an ELP, an LPF doesn’t have the authorization to have multiple GP or to have all of its companions from the same set of companies. 

An LPF should have a registered workplace in Hong Kong LPF. Its application for registration should be submitted by a Hong Kong regulation organization or solicitor. In addition, under the LPFO, the GP of an LPF has, amongst others, the subsequent statutory duties: 

  • To appoint an investment supervisor for the daily investment management functions. 
  • To appoint an auditor; to make sure the right custody of assets.
  • To appoint an accountable individual. 
  • To perform anti-money laundering measures. 

Hence, with regards to an ELP, while not set out with inside the ELP law. Note that the same requirements (consisting of the appointment of an auditor) apply under other relevant Cayman Islands laws and regulations (e.g. the Private Funds Law). 

Terms And Their Meaning Associated With The Structure Of Limited Partnership 


The filing charges for the registration and ongoing maintenance of an LPF are quite lower than most, if not all, other main fund jurisdictions. Initial application and registration charges are HK$3,034 (approx. US$390). The ongoing filing charges vary from HK$26 (about US$4) to HK$105 (about US$14) per item. 


The application of Hong Kong income tax needs to be into consideration in respect of an LPF’s (and/or its supervisor’s) predominant monetary returns, including: 

  • The LPF’s earnings. 
  • The management fee.
  • The carried interest. 

The LPF’s earnings could be exempted from Hong Kong income tax if the LPF satisfies the fund’s income tax exemption under segment 20AN of the Inland Revenue Ordinance (Chapter 112 of the Laws of Hong Kong). On this, the Inland Revenue Department has given its interpretation with inside the Departmental Interpretation and Practice Note No. 61. 


Whilst under the LPFO, it’s far demand for the GP to appoint an investment supervisor. In defining the fund’s investment process, it ought to be there that the investment supervisor must now no longer engage in regulated activity or function in Hong Kong (or keep itself out as such). This should be without the proper license by the Securities and Futures Commission of Hong Kong. 

Commercial consideration 

Given that the LPF regime is incredibly new, one key consideration for an investment supervisor is whether or not the target investors are receptive to the structure of limited partnership. From the experience to date, (a) some PRC investors (in particular, state-owned enterprises) are more inclined to put money into an LPF for policy purposes or otherwise. And (b) nearby investment managers who’re more conscientious about expenses are more inclined to apply LPF for setting up investment funds. 


The LPF regime offers a compelling opportunity for the different well-established structures of limited partnerships in other jurisdictions. However, the important thing consideration is whether target investors are into putting money into any such structure of the limited partnership. Objectively, we can’t see any motive why the LPF regime should not be with a similar structure of limited partnership in different jurisdictions. However, it’s also true that it takes time for the marketplace contributors to familiarise themselves with and take delivery of new regimes consisting of an LPF.

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