Hong Kong, the Asian financial hub, has consistently attracted talented individuals, entrepreneurs, and investors thanks to its favorable tax policies, a wealth of job opportunities, and a cosmopolitan atmosphere.
On February 22, 2023, during the budget speech delivery, Hong Kong’s Financial Secretary, Chan Mo-po, announced that the government is contemplating the revival of Hong Kong’s formerly renowned but subsequently discontinued investor immigration program, the Capital Investment Entrant Scheme (CIES).
“With a view to further enriching the talent pool and attracting more new capital to Hong Kong,” said the Financial Secretary, “we will introduce a new Capital Investment Entrant Scheme. Applicants shall make investments at a certain amount in the local asset market, excluding property. Upon approval, they may reside and pursue development in Hong Kong.”
The details of the news scheme, said the statement, would be “announced later.”
However, following the initial announcement, no further details have surfaced. Amid speculations circulating in the immigration industry, we will endeavor to estimate how the policy might unfold. But first, let’s take a moment to reflect on the program’s historical context, which offers several insights:
The original Hong Kong Capital Investment Entry Scheme
First introduced on October 27th, 2003, the CIES initially required an investment of HKD 6.5 million in various asset classes, including property. Seven years later, due to a significant surge in application volumes, the government decided to raise the investment threshold to HKD 10 million and eliminate the property investment option.
Finally, in January 2015, the government abruptly terminated the program altogether.
While the program was still active, it had the following general requirements:
The program was open to all nationalities except Afghan, Cuban, and North Korean.
The program was open to applicants of 18 years or older
Financial independence requirement
Applicants had to prove they could support themselves and their families without relying on income from employment or assets in Hong Kong.
Net worth requirement
Applicants needed to demonstrate a net worth of no less than HKD 10 million.
Good conduct requirement
Applicants had to have a clean record in Hong Kong and their country of residence.
Mainland Chinese nationals and stateless persons were only eligible for the program if they already held permanent residence status in another foreign country.
Requirements for renewal
CIES participants were permitted to stay in Hong Kong for two years upon initial approval and providing proof of having made the requisite investment. As long as the investor maintained the investment and otherwise continued to meet the requirements to the satisfaction of the Director of Immigration, he or she would receive an extension of stay for two years at a time. Investors and their dependents were free to work, study, start or participate in any business and reside in Hong Kong during the period of stay.
Requirements for Permanent Residence
Investors and their dependents who have ordinarily resided in Hong Kong as Hong Kong residents for more than seven consecutive years can apply for verification of Hong Kong permanent resident identity cards. Of course, those who came to Hong Kong under the CIES and had maintained investments for seven years but had not been ordinarily resident would not be eligible for PR and could choose to simply extend their temporary permit.
Upon approval of the application for unconditional stay, the investor and his dependents would not be subject to any conditions or duration of stay in Hong Kong and would receive a new Hong Kong Resident Identity Card. If the investor and his dependents were Chinese nationals, they would be eligible to apply for the Hong Kong Special Administrative Region Return Permit .
As of March, 31st, 2019, Hong Kong had approved 35,262 CIES applications.
More than 9 in 10 program participants (32,261 approvals) were mainland Chinese who held PR in other countries. A distant second, Macanese nationals obtained 430 approvals, followed by Taiwanese at 377.
Through its years of activity, the CIES raised a total of HKD 314.5 billion (some US$40 billion), of which 14% took the form of real estate and 86% financial assets.
What's on the cards for Hong Kong's new CIES?
The G19 members of Hong Kong's Legislative Council met with Chief Executive Li Ka-chiu to submit several joint initiatives for the 2023 Policy Address, including the expeditious implementation of the new iteration of the CIES with a proposed investment threshold of no less than HK$30 million.
The G19 recommended that applicants be allowed to use part of their funds to invest in non-residential properties and financing tools related to Hong Kong development and construction, so as to attract capital investors to set up family offices in Hong Kong (a field in which Singapore has become Hong Kong's fiercest rival) and support Hong Kong’s large-scale infrastructure and construction projects.
The group also recommended that the funds attracted by the plan be matched with "co-investment funds" and "strategic innovation and technology funds" to
create a superimposed effect.
Our sources on the ground in Hong Kong indicate we can expect the government to present full details of the new CIES policy on October 25th, coinciding with the release of the Chief Executive's policy address. We consider it highly probable that the new investment threshold will be HKD 30 million in financial assets and that other criteria will align with the previous policy.
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Hannah graduated from Renmin University, one of the top universities in China, with Bachelor degree majoring in English Literature. She joined Globevisa in 2008 and worked in Managing position for more than ten years.
Unique relocation experience from Beijing, Hong Kong, and Singapore has enriched her with empathy of global clients demands.
She was the key person to build up several offices including Singapore, UAE, Turkey, and Vietnam. And her major responsibility is to develop global awareness of Globevisa.