By Moustafa Daly
Hong Kong, one of the world’s most developed cities, has announced it will soon be relaunching its residency-by-investment scheme to attract foreign investors, as announced by its Financial Secretary Paul Chan in a recent budget speech.
The island had suspended its previous scheme in 2015, for which the investment threshold was HK$10 million ($1.27 million). Despite having attracted HK$216 billion in foreign investment in its 12-year run, the government ended up scrapping it citing a hike in property prices.
“We don't really need to attract capital investment at the moment. ... What we need now is talent, rather than capital,” said then-Hong Kong Chief Executive Leung Chun-ying, whose administration concluded in 2017.
New economic reality triggers Hong Kong’s RBI program to return
However, with an economic downturn caused by stringent Covid-19 restrictions which were preceded by two years of mass protests and unrest, Hong Kong is now beginning its recovery and is in need to attract foreign investments. Averting past mistakes, “this time around, we specifically said that investment in properties would not be included - this money will go to other financial assets,” he explained.
“The reason for the course being so task-force is to come up with certain requirements to require these people [investors] to set aside some of the money to invest into sectors that we want to promote,” added Chan. “For these people to come here and have the privilege to be our resident… make some contribution to our economy, not just money.”
The investor threshold to be increased for Hong Kong RBI program
“The amount required for investment [in Hong Kong] will be much higher than HK$14 million dollar ($1.78 million). We don’t need to attract everyone, but if the top 5% of wealthy people want to come, it will be a huge volume,” explained Chan - however a final figure is yet to be announced.
Unlike Singapore, whose program is particularly popular among wealthy Chinese, the forthcoming Hong Kong program will not be open to mainland China citizens, as was the case with the previous one.
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