Hong Kong and Turkey are both making a play for the wealthy expats London and the Gulf are losing

Two financial centers that spent the last decade playing catch-up are now making a coordinated pitch at the same moment — and for the same reason. Turkey rolled out a package of tax incentives for wealthy expats and investors, and Hong Kong proposed a bill that would effectively eliminate tax on performance-related income for some fund managers. Neither move happened in a vacuum: established hubs — London, Dubai, Abu Dhabi, and Singapore — have all gotten less certain over the past year, and both Turkey and Hong Kong smell an opening.

Turkey’s package: minimal inheritance tax, up to 20 years of taxfree overseas income, and an amnesty for undeclared offshore assets.

The tax terms are only half the pitch: Turkey is also selling geography and lifestyle as hard as it’s selling the tax code — a bridge between Europe and Asia, shorter flights home than from the Gulf, milder summers, and a cost of living well below Dubai or London. The pitch is aimed first at wealthy members of the Turkish diaspora in the UK and Germany.

Yes, but: The Istanbul Financial Center opened in 2023 with ambitions to rival the Gulf and still lags on global indices. Two decades of Erdogan-era currency devaluation and inflation have taught Turkey’s own wealthy to move assets out, not in — and the state’s use of corporate seizures, which has turned the state asset-management fund TMSF into a de facto conglomerate controlling more than 1k companies, is the kind of thing that gives institutional money pause.

Hong Kong’s package is narrower but more targeted at capital allocators specifically. The proposed bill would exempt performance-related income — the carried interest that private equity and hedge fund managers earn on top of management fees — from tax. That’s a direct shot at Singapore, which is now in talks to cut its own taxes to keep funds from decamping to Hong Kong. The move lands alongside an IPO revival, with Hong Kong’s headline listing this year, Zhongji Innolight’s USD 6.8 bn raise, being the market’s biggest first-time share sale in seven years.

This all comes as Dubai and Abu Dhabi’s safe-haven status gets tested by the US-Iran conflict and as London feels the squeeze of losing its non-dom regime. Yet neither challenger can match the scale of what it’s competing with: Turkey lacks the institutional density for a real relocation, while Hong Kong’s rebound leans heavily on mainland Chinese capital and a shrinking pool of non-Mandarin-speaking roles. The pitch is limited, but timing is the leverage they’re betting on.

MARKETS THIS MORNING-

Asian markets are mixed this morning, with Japan’s Nikkei and South Korea’s Kospi opening in the green before swinging to the red. Meanwhile, Wall Street futures gained marginally as it comes off a losing session.

THE CLOSING BELL-

The DFM fell 1.5% yesterday on turnover of AED 628.2 mn.The index is down 2.1% YTD.

In the green: Mashreqbank (+0.8%) and Amanat Holdings (+0.7%).

In the red: Sukoon Takaful (-4.4%), Air Arabia (-3.7%), and Emirates Central Cooling Systems Corporation (-3.1%).

Over on the ADX, the index rose 0.1% on turnover of AED 1.1 bn. Meanwhile, Nasdaq Dubai was down 1.1%.