Hong Kong's revamped Capital Investment Entrant Scheme (CIES) is set to roll out in mid-2024. The announcement of the latest version of this investment visa program was made in December, with Christopher Hui Ching-yu Hui, Secretary for Financial Services and the Treasury, GBS, JP, anticipating the official launch and the acceptance of the first applications by mid-year.
The anticipation for revisions to the program began a year prior when Financial Secretary Chan Mo-po declared its resurgence. He stated, "To enhance the talent pool and attract fresh capital to Hong Kong, we will introduce a new Capital Investment Entrant Scheme [CIES]. Applicants will need to make investments in the local asset market, excluding property. Once approved, they can reside and pursue development in Hong Kong."
Then, in October, during a Policy Address, Chief Executive Lee Ka-chiu unveiled that the investment threshold for the new CIES would be HK$ 30 million, but no further details were provided at the time. It took ten months from the initial Scheme announcement and two months from the Policy Address for the government to reveal the final program details.
In December, the specifics of the program were finally disclosed. To qualify:
The Evolution of Hong Kong's Residency by Investment (RBI) Option
The CIES was initially launched on October 27, 2003, during a period of economic recession in Hong Kong when the city was seeking a capital influx to stimulate its economy. The CIES required an initial investment of HK$ 6.5 million across various asset classes, including real estate.
Seven years later, in response to a surge in the number of applications, the government raised the investment requirement to HK$ 10 million and discontinued the option for property investments.
Throughout its history, the CIES accumulated a cumulative total of HK$ 314.5 billion (approximately $40 billion), with 14% attributed to real estate investments and 86% to financial assets. It has been nearly nine years since the sudden suspension of the CIES on January 15, 2015. At that time, then-Chief Executive Leung Chun-Ying stated that Hong Kong was more interested in attracting talent than money, promoting talent admission programs like the Quality Migrant Admission Scheme (QMAS).
Hong Kong vs. Singapore Residency Options: Which Is More Appealing?
In recent years, Singapore has excelled in attracting capital and talent, leveraging its strong national brand as a sovereign and independent state. Simultaneously, Hong Kong, with its strategic location as the gateway to China, continues to draw the attention of multinational companies.
Many major financial institutions establish their Asian headquarters in either Hong Kong or Singapore to benefit from well-developed financial regulatory systems. Additionally, both locations offer relatively low personal income tax rates. In recent years, these two cities have engaged in intense competition for the title of "Asia's financial center."
Both locations remain focused on attracting affluent individuals for local investments through their immigration policies. Compared to Singapore's Global Investor Programme, with an investment threshold of SGD 20 million (approximately $15 million), Hong Kong appears to have a competitive edge with a favorable investment amount of HK$ 30 million (less than $4 million).
Certainly, here are some pros and cons of Hong Kong's revamped Capital Investment Entrant Scheme (CIES) and its potential implications:
Pros:
The anticipation for revisions to the program began a year prior when Financial Secretary Chan Mo-po declared its resurgence. He stated, "To enhance the talent pool and attract fresh capital to Hong Kong, we will introduce a new Capital Investment Entrant Scheme [CIES]. Applicants will need to make investments in the local asset market, excluding property. Once approved, they can reside and pursue development in Hong Kong."
Then, in October, during a Policy Address, Chief Executive Lee Ka-chiu unveiled that the investment threshold for the new CIES would be HK$ 30 million, but no further details were provided at the time. It took ten months from the initial Scheme announcement and two months from the Policy Address for the government to reveal the final program details.
In December, the specifics of the program were finally disclosed. To qualify:
- Foreign nationals and Chinese nationals who hold permanent resident status in a foreign country, Macao SAR residents, or Chinese residents of Taiwan aged 18 or above can apply.
- Applicants must possess net assets of no less than HK$ 30 million (or the equivalent in foreign currencies) to which they have beneficial entitlement throughout the two years preceding the application. They should also have no adverse records in Hong Kong or their country/region of residence.
The Evolution of Hong Kong's Residency by Investment (RBI) Option
The CIES was initially launched on October 27, 2003, during a period of economic recession in Hong Kong when the city was seeking a capital influx to stimulate its economy. The CIES required an initial investment of HK$ 6.5 million across various asset classes, including real estate.
Seven years later, in response to a surge in the number of applications, the government raised the investment requirement to HK$ 10 million and discontinued the option for property investments.
Throughout its history, the CIES accumulated a cumulative total of HK$ 314.5 billion (approximately $40 billion), with 14% attributed to real estate investments and 86% to financial assets. It has been nearly nine years since the sudden suspension of the CIES on January 15, 2015. At that time, then-Chief Executive Leung Chun-Ying stated that Hong Kong was more interested in attracting talent than money, promoting talent admission programs like the Quality Migrant Admission Scheme (QMAS).
Hong Kong vs. Singapore Residency Options: Which Is More Appealing?
In recent years, Singapore has excelled in attracting capital and talent, leveraging its strong national brand as a sovereign and independent state. Simultaneously, Hong Kong, with its strategic location as the gateway to China, continues to draw the attention of multinational companies.
Many major financial institutions establish their Asian headquarters in either Hong Kong or Singapore to benefit from well-developed financial regulatory systems. Additionally, both locations offer relatively low personal income tax rates. In recent years, these two cities have engaged in intense competition for the title of "Asia's financial center."
Both locations remain focused on attracting affluent individuals for local investments through their immigration policies. Compared to Singapore's Global Investor Programme, with an investment threshold of SGD 20 million (approximately $15 million), Hong Kong appears to have a competitive edge with a favorable investment amount of HK$ 30 million (less than $4 million).
Certainly, here are some pros and cons of Hong Kong's revamped Capital Investment Entrant Scheme (CIES) and its potential implications:
Pros:
- Attractive Investment Threshold: The increased investment threshold of HK$ 30 million (approximately $4 million) makes it relatively more accessible compared to some other residency programs, such as Singapore's Global Investor Programme, which requires a higher investment amount.
- Diversified Investment Portfolio: The program allows for a diverse range of investment options, including equities, debt securities, non-residential real estate, and more. This flexibility can be appealing to investors looking for various investment opportunities.
- Residency in a Global Financial Hub: Hong Kong is a renowned global financial hub with a strategic location as a gateway to China. It offers a business-friendly environment and access to a vast market.
- Low Personal Income Tax: Hong Kong offers a relatively low personal income tax rate, making it attractive for high-net-worth individuals seeking to manage their wealth efficiently.
- High Cost of Living: Hong Kong is known for its high cost of living, including expensive housing, education, and healthcare. The increased investment requirement may not fully offset these costs.
- Competitive Global Market: While Hong Kong is a major financial center, it faces stiff competition from other global financial hubs like Singapore, London, and New York. Investors have various options to consider.
- Political Uncertainty: Hong Kong has experienced political unrest and changes in its relationship with mainland China in recent years. This could potentially impact the stability and attractiveness of the city for investors.
- Limited Benefits Beyond Residency: Unlike some other investment migration programs, Hong Kong's CIES primarily offers residency benefits. It does not provide a direct path to citizenship or passport, which could limit its appeal to certain investors seeking long-term security.
- Adverse Records Requirement: Applicants are required to have no adverse records in Hong Kong and their country/region of residence. This requirement could potentially disqualify some applicants and create hurdles for those with previous legal issues.
