The Capital Investor Entry Scheme (CIES) will accept applications on 1st March, 2024 and is expected to enrich Hong Kong’s talent pool and attract new capital.
The government restarted the New Capital Investor Entry Scheme (CIES). Since the opening of the new scheme, Invest Hong Kong has received more than 600 inquiries and several applications, including investors from Southeast Asian countries, the Middle East and South Korea. The authorities pointed out that this is proof that Hong Kong is still attractive in attracting investment.
The New Capital Investor Entry Scheme (CIES) accepted applications on on 1st March, 2024. An investment immigration company stated that as of 8th March, 2024, it had received more than 1,000 inquiries, and more than half had the intention to apply. Many of the inquirers were high-net-worth individuals from Southeast Asian countries.
In the middle, Mr. Wilson Wu, the Director of Southeast Asia Immigration Consultants.
Left hand side, Mr. Tom Lau, Senior Strategy Manager of Southeast Asia Immigration Consultants.
An investment immigration company has also received repeated inquiries recently. Mr. Wilson Wu, the director of Southeast Asia Immigration Limited, pointed out that it has received more than 1,500 inquiries since 1st March 2024, more than half of which have the intention to apply, and 100 are queuing up to submit formal applications. Most inquiries come from Southeast Asia, linked to the rise in local high-net-worth individuals. As for Chinese nationals, some are still waiting and watching, while others have come to Hong Kong through different channels such as the "Top Talent Pass Scheme (TTPS)" program. He mentioned that most of the inquirers are successful entrepreneurs who hope to obtain an additional identity to facilitate business.
Mr. Wilson Wu believes that the standard for permanent residents requires continuous ordinary residence of not less than 7 years. Investors may not be able to meet the conditions, or they may be inclined not to receive permanent residence. "This does not mean that investors under the old scheme will not stay in Hong Kong." Mr. Tom Lau pointed out, Hong Kong has a good business environment, and the degree of recovery is obvious to all. The inquiries received by the company also focus on the situation of children studying in Hong Kong, such as the education system, the types of international schools, etc., as well as the transactions of the "retirement" of the property market. Quantity etc. He believes that under the current environment, investors can be attracted to live in Hong Kong.
Some businessmen from Thai engaged in agricultural trade pointed out that many Southeast Asian have "become rich" and are actively exploring the PRC market. It is more convenient for them to do business into the PRC market with Hong Kong identity and Hong Kong companies. Also cultural tourism based entrepreneurs from mainland China who are interested in investing in Hong Kong, because they have their sights on the tourism market in the Greater Bay Area. Some businessmen suggested that the government could consider relaxing some investment portfolio restrictions to allow investors to choose freely, which would further enhance the attractiveness of the plan.
Ms. Lena Li, Chief Executive Officer of Southeast Asia Immigration Consultants
Hong Kong launched the Capital Investor Entry Scheme as early as 2003. At that time, the economy was in recession and the government hoped to attract external funds to rescue the market. The initial threshold is set at HKD 6.5 million, which must be invested in financial securities or real estate markets and cannot be cashed out within 7 years. In the face of sharp rise in housing prices, the government raised the investment threshold to HK$10 million in 2010 and excluded residential properties from investment options. The relevant plan was finally discontinued in 2015 and was announced to be re-launched last year. Ms. Lena Li, Chief Executive Officer of Southeast Asia Immigration Consultants, said that during the suspension of the program, inquiries about investment immigration have been received. Applications have been submitted for a group of long-awaited clients, and another group of clients are preparing assets. She said that among them are mainly mainland citizens who have obtained permanent residence status in a third country. There are also inquiries from Southeast Asian customers. If there are Indonesian businessmen who have business dealings with Hong Kong, they hope that it will be easier to enter and exit after obtaining Hong Kong status.
Many foreign goods are transshipped to the mainland via Hong Kong, and some businessmen hope to set up companies in Hong Kong.
Hong Kong’s advantage is that it has less demand for cash flow
British wealth advisory firm Henley & Partners released the "Investment Migration Programs 2024" report late last month. Ranking multiple investment immigration programs around the world based on two indices, citizenship and residency, and listing the most attractive programs. Hong Kong ranks 11th in the "Global Residency Plan Index" with South Korea and Monaco, and tied for second in Asia, second only to Singapore.
Mr. William Luong, the investment shareholders of Southeast Asia Immigration Limited
Mr. William Luong said that he had compared investment immigration programs in different regions and believed that European regions generally have high investment thresholds and long distances. “You can’t go there many times a year even if you have to fly back and forth.” The investment threshold in Singapore is higher than that in Hong Kong, and Hong Kong is also more suitable for expanding the mainland market. He said that the entry threshold for investment immigration in Singapore is twice as high as that in Hong Kong. For investors, Hong Kong has relatively less demand for cash flow, which is an advantage.
Data show that Singapore raised the threshold for the Global Business Investor Program (GIP) in March last year. There are currently three investment plans, namely investing no less than SG$10 million (approximately HK$58.65 million) to establish a new local entity business or expand an existing entity business. Invest no less than SG$25 million (approximately HK$147 million) in a local company’s Global Business Investor Program Select Fund (GIP-select fund), and establish and manage a local company of no less than SG$200 million (approximately HK$1.17 billion) ) assets of a single family office, of which SG$50 million must be transferred to Singapore for investment in stocks and funds.
Hong Kong’s New Capital Investor Entry Scheme (CIES) requires an investment amount of at least HK$30 million. Of this, HK$3 million needs to be invested in the "Capital Investor Entry Scheme Investment Portfolio" that supports the development of Hong Kong's innovation and technology industry and other key industries. The remaining HK$27 million can be invested in non-residential properties with HK$10 million, or all of it invested in financial assets. Ms. Lena Li said that most of the investors who inquired already had a certain understanding of financial products and tended to diversify their investments while investing in financial assets and non-residential properties. “They would ask in detail about the market, expenses, and Taxes, as well as returns and income after renting out.”
Actively enhance competitiveness, the Hong Kong government needs both "people" and "capital"
The government stopped the investment immigration program in 2015 because it wanted to adapt to changes in Hong Kong's demographic structure and enhance Hong Kong's competitiveness. Analysis at that time pointed out that most investment immigrants did not settle in Hong Kong, but just spent money to buy status. With the sustained and stable economic development, Hong Kong lacked talents more than funds. In introducing a new capital investor entry program this time, the government also pointed out that in order to further enrich the talent pool and attract new funds, both "people" and "finance" are needed.
InvestHK stated that Hong Kong remains attractive in terms of attracting investment.
According to data, the Capital Investor Entry Program from 2003 to 2015 attracted more than HK$310 billion in investment, of which approximately HK$42.5 billion was real estate investment and the rest was investment in designated financial products.