The 30,500 sq. m museum will be funded with a $450m donation from the Hong Kong Jockey Club, the city's biggest private charity. The Hong Kong outpost will likely have a contemporary style as it will be designed by Rocco Yim, the Hong Kong architect who designed the new Hong Kong government complex.

The Palace Museum is believed to have about 1.8 million items in its collection, with only 10,000 going on display every year. 

Chinese cultural policy restricts the number of 'national treasures' that can be sent abroad, for no more than three months. It is understood that the new museum, which has a different legal system as a Chinese special administrative region, will receive special status to allow it to show at least 1,000 items for extended periods.

For a long time, only the former Portuguese colony, Macau, could boast of regular loans from the Palace Museum. Following the territory's return to Chinese sovereignty in 1999, the Macau Art Museum has presented yearly exhibitions from the Palace Museum collections, bringing in modest visitor numbers. The current show, which opened in mid-December, highlights the practices around flower arrangements in the imperial courts.

Since 2007, the tenth anniversary of the Hong Kong handover, the former British territory has sporadically staged well-attended exhibitions in collaboration with the Palace Museum, drawing crowds of locals and tourists from China. In recent years, the prestigious Chinese University of Hong Kong also began joint exhibition and research programs on its Hong Kong campus, most recently on mughal jades in the Palace Museum collection.

In 2017, the 20th anniversary of Hong Kong's return to China, the city will host  two Palace Museum shows as part of the celebrations. Several 'national treasures' that have never left Beijing before will be part of the exhibitions.