Hong Kong Relaxes CIES Net Worth Requirement Amid Other Changes

Siren Chen
Shenzhen

On January 7, 2025, Invest Hong Kong (InvestHK) announced new updates to its Capital Investment Entrant Scheme (CIES), easing asset verification requirements and expanding investment options for prospective applicants.

Understanding these changes requires examining the original policy’s framework.

Key requirements of the 2024 policy

Under the previous rules, principal applicants must:

1. Hold personal assets worth HK$30 million or more for at least two consecutive years.
2. Invest HK$30 million in government-designated projects within 180 days of passing the asset and identity verification to obtain Hong Kong residency.

The asset verification stage stymied many applicants despite the process’ apparent simplicity. Applicants faced two major challenges:

Sole ownership requirement

The previous policy required that applicants hold HK$30 million in assets solely in their name for over two years.

The policy excluded all jointly owned assets, including properties shared with spouses or other parties.

Continuous ownership for two years

Frequent trading of stocks and funds created difficulties for applicants holding financial assets.

If their asset value fell below HK$30 million balance even for a single day during the two-year period, the applicants were disqualified.

The new policy

InvestHK has said it listened to feedback from stakeholders and investors and has updated the program to include:

Acceptance of jointly held assets

Applicants can now qualify through shared ownership of assets, including properties, bank accounts, and business assets, that they have held for at least six months.

Official documentation determines the principal applicant’s ownership proportion of each asset type. For example:

Real estate & bank accounts: Land Registry offices and banks must certify ownership percentages for real estate and bank accounts.

Business assets: Applicants can now invest in private Hong Kong companies to support the program’s integration with family offices. These companies must meet five conditions six months before investors apply.

1. Registration and incorporation in Hong Kong
2. Full ownership by the applicant
3. Holdings limited to permissible investment assets
4. Operation as a Family-owned Investment Holding Vehicle (FIHV) or its Special Purpose Entity, with:
   • Two full-time Hong Kong employees
   • HK$2 million minimum annual local operating costs
5. Management by an Eligible Single Family Office that:
   • Oversees family FIHV assets under Schedule 16C of the Inland Revenue Ordinance
   • Maintains minimum aggregate assets of HK$240 million

Defining qualifying family members

Schedule 16E, Section 4 of the Inland Revenue Ordinance now defines eligible family members as the principal applicant’s spouse, children, and parents.

Inclusion of family office investments

Family offices now qualify as an investment option, accepting investments up to HK$27 million under the program.

The new criteria apply to all applications from March 1, 2025. The new standards accept asset proof dating back to September 2024

Continuous improvement

The government continues to tinker with the CIES.

InvestHK had amended the policy on October 16, 2024, to include residential properties as investment options for high-net-worth individuals.

Hong Kong has also appointed four fund managers, splitting HK$600 million between them.