By Siren Chen, Globevisa Group
Hong Kong’s revamped Capital Investment Entrant Scheme (CIES) will become effective mid-2024.
In December, the Special Administrative Region announced the latest version of its investment visa program. Secretary for Financial Services and the Treasury, Christopher Hui Ching-yu Hui, GBS, JP, said the official launch of the new CIES and first applications are expected by mid-year.
New eligibility criteria for Hong Kong’s upgraded investor visa
Expectations about revamps to the program began a year ago, when the city’s Financial Secretary Chan Mo-po announced its comeback, stating that “with a view to further enriching the talent pool and attracting more new capital to Hong Kong, we will introduce a new Capital Investment Entrant Scheme [CIES]. 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.”
Then, in October, during a Policy Address, Chief Executive Lee Ka-chiu disclosed the investment threshold of the new CIES would be HK$ 30 million but provided no other information. It took ten months since the announcement of the Scheme and two months since the Policy Address for the government to announce the final program.
In December, the details finally came out. To qualify:
Foreign nationals and Chinese nationals who obtained permanent resident status in a foreign country, Macao SAR residents, or Chinese residents of Taiwan aged 18 or above can apply.
Applicants must have net assets of not less than HK$ 30 million (or equivalent in foreign currencies) to which he/she is beneficially entitled throughout the two years preceding the application, and have no adverse record in Hong Kong and their country/region of residence.
Apart from the HK$ 20 million increase in the investment threshold, the program introduced a new investment portfolio. For financial assets, equities, debt securities, certificates of deposit (no more than HK$ 3 million), subordinated debt, eligible collective investment schemes, and limited partnership funds are permissible. Notably, nonresidential real estate (no more than HK$ 10 million) is also considered permissible investment assets. Investors must also invest HK$ 3 million in a newly introduced CIES Investment Portfolio managed by Hong Kong Investment Corporation Limited.
Evolution of Hong Kong’s RBI option
Originally launched on Oct. 27, 2003, when Hong Kong was in a recession and looking for new capital influx to stimulate the economy, Hong Kong’s residency by investment (RBI) option CIES mandated an initial investment of HK$ 6.5 million across diverse asset classes, including real estate.
Seven years later, in response to a substantial increase in application numbers, the government changed the investment requirement to HK$ 10 million and discontinued the option for property investments.
Throughout its history, the CIES garnered a cumulative total of HK$ 314.5 billion (approximately $40 billion), with 14% attributed to real estate and 86% to financial assets. It’s been nearly nine years since the sudden halt of the CIES on Jan. 15, 2015. The chief executive at the time, Leung Chun-Ying, said Hong Kong was looking for talent rather than money. The city then promoted talent admission programs like the Quality Migrant Admission Scheme (QMAS).
Hong Kong vs. Singapore residency options: which is most attractive?
In recent years, Singapore has thrived in attracting capital and talent through strong national branding as a sovereign and independent state. At the same time, with a strategic location as the gateway to China, Hong Kong still draws attention to multinational companies.
Many major financial institutions establish their Asian headquarters in Hong Kong or Singapore to benefit from a well-developed financial regulatory system. Additionally, both locations boast relatively low personal income tax rates. In recent years, these two cities have engaged in heated competition for the title of "Asia's financial center."
Attracting affluent individuals for local investments remains a central focus of both immigration policies. Compared to Singapore’s Global Investor Programme, with an investment threshold of SGD 20 million (approximately $15 million), it is likely that Hong Kong will get a head start with a favorable investment amount of HK$ 30 million (less than $4 million).
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