Private Equity Doesn’t Live by Tax Breaks Alone: Opinion

May 4, 2021, 3:40 AM

Hong Kong’s government says cutting the tax on carried interest to zero will make the city a more attractive base for private equity firms and boost the economy. In normal times, there would be no debate. The change gives the Chinese city an edge over its regional rival Singapore and is opportunely timed, coming just as President Joe Biden proposes to eliminate tax breaks for carried interest (essentially the profits that partners accrue on a fund’s investments) in the U.S. The question is whether the enticement is sufficient to outweigh an expanding list of factors that threaten to dim Hong Kong’s...

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