Hong Kong's Updated Capital Investment Entrant Scheme Set For 2024 Launch

Editor2

Moderator
Staff member
Dec 21, 2023
443
1
Introduction

Hong Kong is gearing up for the implementation of its revised Capital Investment Entrant Scheme (CIES), slated to take effect in mid-2024. This scheme is part of the Special Administrative Region's efforts to attract more capital and enhance its talent pool.

Key Updates and Eligibility

The announcement of the revamped investment visa program came in December, following a statement by Financial Secretary Chan Mo-po about revitalizing the scheme. The new CIES raises the investment bar, requiring applicants to invest in Hong Kong's local asset market, excluding property, with a minimum threshold of HK$ 30 million.

Eligibility extends to foreign nationals, Chinese nationals with permanent residency abroad, Macao SAR residents, and Chinese residents of Taiwan, who are 18 years or older. Applicants must have net assets of at least HK$ 30 million and a clean record in Hong Kong and their residence country.

Investment Portfolio Changes

The revised program introduces a diverse investment portfolio, including financial assets like equities, debt securities, and certificates of deposit. Additionally, nonresidential real estate investments, capped at HK$ 10 million, are now permissible. A significant component is the mandatory investment of HK$ 3 million in a CIES Investment Portfolio managed by the Hong Kong Investment Corporation Limited.

Historical Perspective of Hong Kong’s RBI

The CIES, initially launched in 2003 during an economic recession, aimed to attract new capital with an investment requirement of HK$ 6.5 million. The scheme has evolved over the years, with significant changes in 2010, including raising the investment requirement to HK$ 10 million and excluding property investments. Since its inception, the CIES has accumulated about HK$ 314.5 billion in investments.

Comparison with Singapore’s Residency Options

Singapore, known for its strong branding and strategic location, competes closely with Hong Kong in attracting capital and talent. Both cities offer favorable conditions for financial institutions and boast low personal income tax rates. However, Hong Kong's updated CIES, with its lower investment threshold compared to Singapore's Global Investor Programme, positions it competitively in the race to be Asia's financial hub.

Pros:

The revamped CIES is designed to attract significant capital investments to Hong Kong.

Diversified Investment Options: Introduction of a wider range of permissible investments, including nonresidential real estate.

The new scheme is strategically positioned to compete with Singapore’s residency options.

Cons:

The increased minimum investment might be prohibitive for some potential applicants.

This might limit the appeal for those interested in property investments.

The scheme’s stringent eligibility criteria and investment complexities could deter some investors.