20 December 2023
Immigration
Hong Kong | New capital investment entrant scheme
Impact: Medium
Summary
In response to the Policy Address announced by Mr. John Lee Ka Chiu, the Chief Executive of HKSAR in October 2023 as well as “The Policy Statement on Developing Family Office Businesses in Hong Kong” issued by the Finance Services and the Treasury Bureau in March 2023, the HKSAR Government announced the details of the new Capital Investment Entrant Scheme (“CIES”) in Hong Kong on 20 December 2023. The new CIES aims at attracting high net worth investors and entrepreneurs from the world to enrich the talent pool and to contribute to economic growth and long-term development in Hong Kong. The HKSAR Government has enhanced the investment requirements for the new CIES scheme which will require each eligible applicant to invest a minimum of HK$30 million to permissible financial assets, non- residential real estate and the new CIES investment portfolio managed by the Hong Kong Investment Corporation Limited (“HKIC”). The new CIES will be officially launched and applications will be accepted from the middle of 2024. Further details of the new scheme as well as the application procedures will be provided by the relevant government bodies later.
The Detail
Eligibility
An individual who meets the following general eligibility criteria may apply for the new CIES which is due to launch in mid-2024:
• Aged 18 or above;
• Foreign national (except for those otherwise excluded), Chinese national who has obtained permanent resident status in a foreign country, Macao Special Administrative Regional Resident, or Chinse resident of Taiwan;
• Net assets of not less than HK$30 million to which the applicant is absolutely beneficially entitled throughout the two years immediately before submission of the application.
Minimum Investment Requirements
Applicants must make an investment of a minimum of HK$30 million of which HK$27 million has to be invested in permissible financial assets, such as equities, debt securities, certificates of deposits, subordinated debt and other eligible collective investment schemes, and non- residential real estate. Details of the permissible investment portfolio are available here:
https://gia.info.gov.hk/general/202312/19/P2023121900385_442644_1_1702988180672.pdf
The remaining HK$3 million has to be placed into a new CIES Investment Portfolio which will be set up and managed by the HKIC to make investments in companies or projects with a Hong Kong nexus.
Entry of Dependents
Applicants of CIES may apply to bring their accompanying dependants such as legally married spouse and unmarried dependent child aged under 18 years to Hong Kong as dependants for residence.
Duration of Visa and Extension of Stay
Upon review, the Hong Kong Immigration Department will grant “Approval in Principle” to eligible applicants who can then travel to Hong Kong as visitors for a period of not more than 180 days in order to make the required level of investment in the permissible financial assets. Upon formal approval, successful applicants will be granted initial visas with permission of stay up to two years.
For extension, applicants will need to comply with the relevant portfolio maintenance requirements and rules on any switches of investment. Extension of stay will generally be granted in accordance with a 3-3-year pattern for successful applications.
Hong Kong Permanent Resident (HKPR)
Upon a period of continuous ordinary residence in Hong Kong for not less than seven years, applicants may apply to become HKPRs. If an applicant is unable to fulfil the continuous ordinary residence requirement, while continuously satisfying the financial requirement under the new CIES for not less than seven years, he/she may apply for unconditional stay in Hong Kong which allows him/her to reside in Hong Kong without any limitation.
Applicants are free to dispose the invested asset portfolio upon approval of the HKPR / unconditional stay application.
Observations and Recommended Actions
The introduction of the new CIES is welcome news to the Hong Kong economy and talent market. The new CIES is expected to bring in additional investment funds of HK$120 billion to Hong Kong and will attract entrepreneurs and high net worth investors from around the world to choose Hong Kong as their business destination as well as place of residence. Implementation of the new CIES will strengthen Hong Kong as a hub of asset and wealth management and bring in more business opportunities for various market stakeholders.
With the additional requirements of placing HK$3 million into a new CIES investment portfolio, the scheme not only provides an opportunity for high net worth investors to directly invest in the permissible investment portfolio in the existing financial market, but also supports the development of innovation, technology and other strategic industries in Hong Kong which can contribute to the development of new industries, fostering innovation and enhancing Hong Kong’s competitiveness in the global market in the long run.
From an immigration compliance perspective, upon approval of a CIES visa application, eligible investors as well as their dependants are permitted to reside, work, establish business and study in Hong Kong within the validity of their CIES visas. As such, employers should update their internal policies to include this type of residence visa for right-to-work check purpose in order to timely and properly onboard candidates who hold the CIES visas in Hong Kong.
Individuals who are interested to apply for a visa under the CIES are also advised to consider other relevant implications and plan ahead properly. For example, there may be tax implications in respect of the transfer of assets from their current residing (or other) locations to Hong Kong and the establishment of residency in Hong Kong. Failure to consider holistically may result in non compliance, penalties, or other adverse consequences.
Contact us
For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:
James Clemence
Chief Executive Officer, APAC
james.clemence@vialto.hk
Adam Chiu
Partner
adam.chiu@vialto.hk
Louis Lam
Partner
louis.lam@vialto.hk
Bruce Lee
Partner
bruce.lee@vialto.hk
Steven Lim
Partner
steven.lim@vialto.hk
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