Asia's New Family Office Race Isn't About Tax Rates

For the past decade, Asia's financial centers have competed for family offices with essentially the same playbook: lower tax rates, looser thresholds, faster setup.

This year, the playbook began to change.

Through the association's international networks, I have spent this year exchanging views with partners across Asia, and my strongest observation is this: several major financial centers, almost at the same moment, moved "impact" from an optional add-on for family wealth to the core of their policy design. Their approaches differ, but the logic behind them is strikingly consistent.

Hong Kong: the regulator writes the report itself

On March 10 this year, the Hong Kong Institute for Monetary and Financial Research, a research body within the Hong Kong Monetary Authority's system, published a report with a title unusually direct for an official document: "Beyond Wealth: Advancing Hong Kong's Family Office Ecosystem through Philanthropy, Impact Investing and Risk Management."

The data run like this: among surveyed family offices in Hong Kong, the share engaged in philanthropy is expected to rise from 45% to 64%, and the share engaged in impact investing from 30% to 43%; another 91% of respondents already invest in Hong Kong. The policy recommendations include making use of the Greater Bay Area's cross-industry networks, promoting "private social investment," and strengthening talent development.

In my view, the most important thing about this report is not the numbers but where it comes from.

Very few regulators in the world have had their own research arm put "philanthropy" and "impact investing" at the center of the growth path for the family-office ecosystem. The effect is one of framing: when the regulator says "the next step for family offices is philanthropy and impact," the financial industry's product and service design naturally adjusts.

Nor does the report stand alone. Hong Kong also has FamilyOfficeHK, the dedicated team within Invest Hong Kong, handling attraction; the Hong Kong Academy for Wealth Legacy handling talent; a philanthropy research institute advancing research on Asian philanthropy; and the government-hosted "Wealth for Good" summit providing international visibility. This year's legislative amendments also added carbon credits and emission allowances to the qualifying assets of family-owned investment holding vehicles. Attraction, talent, research, philanthropy and a flagship forum: all five are being done together.

Singapore: no mandate, but easier for those who do it

Singapore's approach is more subtle, because it does not talk about morality at all.

The Monetary Authority of Singapore's 13O and 13U tax incentives for family offices carry a "capital deployment requirement": a fund must invest at least 10% of its assets under management, or S$10 million (whichever is lower), in local investments. Besides local equities, bonds and private equity, qualifying investments explicitly include climate-related investments and blended-finance arrangements involving Singapore financial institutions.

The key is the multiplier design: concessionary capital invested in blended finance counts at 1.5 times, and highly concessionary capital at 2 times; grants to blended-finance structures count at 2 times toward local business spending.

Note the logic: Singapore does not require any family to do impact investing; it simply makes it easier for families that do to meet the thresholds for tax incentives. In Singapore, an impact allocation is not "giving more"; it is "qualifying" and "lowering costs."

The supporting infrastructure is just as complete. The Philanthropy Asia Alliance under Temasek Trust has passed S$1 billion in commitments and hosts the annual Philanthropy Asia Summit, while the government-backed Wealth Management Institute (WMI) runs a family-office community and hosts an "Asia Changemakers" centre.

Japan: first, draw a shared map

Japan has taken a different road, but one that deserves just as close a look.

Impact investment in Japan has reached ¥18.65 trillion, up 8% from the previous year. More interesting is where the growth came from: 85% came from existing institutions increasing their positions. This is not a market propped up by a rush of new players, but one where participants keep deepening their commitments, a classic sign of a maturing market.

Japan got three things right at the same time. The Financial Services Agency and the Ministry of Economy, Trade and Industry set up an "Impact Consortium," bringing regulators, financial institutions, corporates and academia to the same table. The GSG Impact national partner in Japan publishes an annual market survey so that everyone looks at the same data. And the Government Pension Investment Fund (GPIF) has built an impact orientation into its sustainable investment policy, with public money leading by example.

Without a shared thermometer, there can be no shared goal. Japan's starting point was, in fact, a survey published every year.

The market: family offices are "polarizing"

These are not just policy statements. The market really is moving.

A survey published in August by Hong Kong's Sustainable Finance Initiative drew on 121 family-office representatives and asset owners in Asia-Pacific and beyond: 86% already have some sustainable allocation, and the share allocating more than half of their assets to it jumped from 17% last year to 27% this year.

Even more notable is the shift in method: 31% now take a "systems investing" approach, overtaking opportunistic allocation for the first time, while the carve-out approach that used to be common fell from 18% to 13%. In other words, Asia's family offices no longer treat impact as a small slice in a corner of the portfolio; they are starting to make it the logic of the whole allocation.

The organization's chief executive, Katy Yung, put it precisely: family offices are not just committing to impact; they are polarizing around it. Those who have started are going deeper, while those who have not are still at the door.

The survey is also honest: only 36% said returns met or exceeded expectations, and 54% felt it was still too early to judge. This is not as romantic as it sounds, and it does not need to be dressed up.

What Asian families lack most is measurement

In early September, a study by the Bridgespan Group in collaboration with a Hong Kong philanthropy research institute, the Rockefeller Foundation and the Gates Foundation surveyed 186 wealthy individuals and families across 20 economies. Two sets of figures stand out for Asian families.

The first is structure: about 94% of Asian wealth is first- or second-generation (versus 85% globally), and about 95% of Asian families still control the business that created their wealth (versus 68% elsewhere). Asian families are younger than Western ones, and closer to industry.

The second is a gap: more than 80% of Asian families report only "outputs" (how many schools were built, how many teachers were trained), while "outcomes," such as how much learning actually improved, are uncommon across all groups.

In other words, Asian family philanthropy does not lack money; it lacks measurement. And this is the most fundamental difference between impact investing and traditional philanthropy: the former requires defining outcomes at the outset and tracking them continuously.

Three roads, one logic

Hong Kong defines direction through research and an ecosystem, Singapore lowers costs through incentives, and Japan builds a shared language through a national platform. The three roads look different, but they rest on the same logic:

Policy does not change people's motives; it changes the cost of the path.

This also means the competition among Asia's financial centers is changing its question: from "whose tax rates are lower and thresholds looser" to "whose capital can prove what it has created."

Taiwan's place in this race

Two years into its push to become an Asian asset management center, Taiwan has real results to show: financial-industry assets under management have grown by NT$10.62 trillion, 52 regulatory adjustments have been completed, and the number of banks offering high-net-worth wealth management has risen from 12 to 21. Banks' family-office advisory business and a tax consensus on century-long trusts are also falling into place.

But in this new race, Taiwan has not yet made "impact" part of its own language.

Taiwan has one condition others lack. That 95% in the Bridgespan study (Asian families still controlling the businesses that created their wealth) is even more pronounced in Taiwan, where more than 70% of listed companies and more than 90% of unlisted companies are family businesses. Many financial centers attract mobile financial capital; what Taiwan has are families that hold industrial capability, supply-chain relationships and manufacturing know-how. Once this kind of capital changes direction, it can change not just a portfolio but an entire industrial chain.

Taiwan does not need to copy any of these roads. But one question is worth answering first: in Asia's new race, do we want others to remember Taiwan for lower thresholds, or for capital that can prove what it has created?

The author is an executive director of the Taiwan Impact Investing Association, a partner of Sustainable Impact Capital (SIC), and chairman of DoublePortion Capital.