Since Hong Kong’s Financial Secretary announced during February’s Budget Speech that the Hong Kong Capital Investment Entrant Scheme (CIES) – a residence by investment program that was extremely popular among mainland Chinese until its suspension in 2015 – would return, speculation has been rife as to what the new program would look like.
Chief Executive John Lee revealed this week during his second annual policy address that the government would bring back the program at a price tag of HKD 30 million, or three times the investment requirement the program had before its suspension. Eligible investment types will be stocks, bonds, and funds, expressly excluding residential real estate, while it remains unconfirmed whether commercial property will qualify, as the Legislative Council’s Group of 19 had recommended.
The new threshold matches precisely that predicted by Hannah Ma in her September 24 article in IMI.
The Chief Executive said the reintroduction of the scheme would help “strengthen the development of our asset and wealth management business, financial services, and related professional services.”
Before suspending the program, Hong Kong received several thousand applications each year. Questions will now remain as to whether the scheme can command sufficient interest at the higher price point.
Chief Executive Lee has been under pressure to stem the exodus of capital and talent in the wake of mass departures in the last few years. At least 140,000 inhabitants have left Hong Kong since 2020, and the city-state is on the verge of logging its fourth straight year of population decline.
The demographic decline, while in part explained by a rapidly aging population, has coincided with Beijing's implementation of the controversial national security law, which criminalized the promotion of secessionism and gave the government wide-ranging powers to ban what in Hong Kong had previously been considered free speech.
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