Introduction of the New Capital Investment Entrant Scheme in Hong Kong

On 1 March 2024, the Hong Kong Government introduced a new Capital Investment Entrant Scheme (“New CIES”) to attract individuals seeking residency and development opportunities in Hong Kong. To qualify, applicants must make a significant financial investment in specified local asset classes. The New CIES aims to attract high-net worth individuals and fresh capital, enrich the talent pool and foster the growth of Hong Kong’s financial and professional services sectors, particularly in asset and wealth management.

The original CIES, launched on 27 October 2003, initially required a minimum investment of HK$6.5 million for applicants seeking residency through investment in various permissible asset classes, including property. In 2010, the Hong Kong government raised the investment threshold to HK$10 million due to a significant surge in applications.

In contrast to the original CIES, the New CIES increases the minimum investment threshold to HK$30 million and broadens the categories of permissible investment assets, while excluding property. The New CIES Office under InvestHK will oversee the programme, encompassing the assessment of investment criteria, monitoring compliance, and ensuring applicants meet the required portfolio maintenance standards.

B. Application requirements

The following is a snapshot of the relevant application requirements under the New CIES.

1. Age – i.e. aged 18 or above
2. Nationality
   • foreign nationals; (excluding nationalities as stated in Note 1 of the Eligibility Criteria);
   • Chinese nationals who have obtained permanent resident status in a foreign country;
   • Macau Special Administrative Region residents; or
   • Chinese residents of Taiwan
3. Investment in Permissible Investment Assets

   • An investment of at least HK$30 million (or equivalent in foreign currencies) in Permissible Investment Assets is required. Of this amount, HK$3 million must be allocated to a new CIES Investment Portfolio. This portfolio, managed by the Hong Kong Government-owned Hong Kong Investment Corporation Limited, is designed to support innovation and technology industries deemed beneficial to the long-term development of Hong Kong’s economy. The remaining HK$27 million can be freely invested within the confines of “Permissible Investment Assets”.

   • “Permissible Investment Assets” consist of:

     • (i) Equities – i.e. shares of companies listed on the Stock Exchange of Hong Kong Limited (“SEHK”) and traded in HKD or RMB.
     • (ii) Debt securities:
       • debt securities listed on the SEHK and traded in HKD or RMB (including debt instruments issued in Hong Kong by the Ministry of Finance of the People’s Republic of China (“PRC”) and local governments in Mainland China).
       • debt securities denominated in HKD or RMB, including fixed or floating rate instruments and convertible bonds issued or fully guaranteed by:
     • (iii) Certificates of deposit – i.e. certificates of deposit denominated in HKD or RMB issued by authorized institutions with a remaining term to maturity of not less than 12 months at the time of purchase, subject to a cap of 10% (i.e. HK$3 million) of the minimum investment threshold.
     • (iv) Subordinated debt – subordinated debt denominated in HKD or RMB issued by authorized institutions.
       • SFC-authorized funds managed by corporations licensed by or institutions registered with the SFC for Type 9 regulated activity;
       • SFC-authorized real estate investment trusts managed by corporations licensed by or institutions registered with the SFC for Type 9 regulated activity;
       • SFC-authorized Investment-Linked Assurance Scheme issued by permitted insurers to carry on Class C business as specified in Part 2 of Schedule 1 to the Insurance Ordinance (Cap. 41); and
       • Open-ended fund companies registered under the Securities and Future Ordinance (Cap. 571) and managed by corporations licensed by or institutions registered with the SFC for Type 9 regulated activity.
     • (v) Eligible Collective Investment Schemes:
     • (vi) Ownership interests in Limited Partnership Funds
     • (vii) Non-residential real estate – i.e. investment in commercial and/or industrial (including pre-completion properties and excluding land) real estate in Hong Kong, subject to a cap of HK$10 million.
4. The Registrar of Companies (the “Registrar“) is also empowered to impose any other conditions on a case-by-case basis.

C. Application requirements

The portfolio maintenance requirements must be complied with by the applicant including:

• the Permissible Financial Assets must be deposited into an account operated by an eligible financial intermediary;
• the account for holding the Permissible Financial Assets must be under the applicant’s name; and
• the applicant must ensure the maintenance of the portfolio investments appropriately by preserving HK$30 million and not actively withdrawing the investment.

D. Application process

Stage 1: Initial verification of net assets

The applicant must first approach the New CIES Office to verify their fulfilment of the Net Asset Requirements. Upon successful verification, the New CIES Office will issue a certifying document to the applicant and formally notify the Director of Immigration.

Step 2: Entry application and approval-in-principle

Following net asset verification, the applicant is then required to submit an Entry Application to Director of Immigration.

If approval-in-principle is given after assessment from the immigration perspectives, Director of Immigration will grant a visa/entry permit to the applicant. This permit allows entry into Hong Kong for no more than 180 days to make the committed investment.

Step 3: Assessment on investment requirements

After completing the committed investment within the specified timeframe, the applicant is required to engage with the New CIES Office once again for verification of Investment Requirements fulfilment. Relevant certifying proof will be issued to the applicant and the Director of Immigration will be duly notified.

Step 4: Entry application – formal approval

The applicant must then present the certifying proof to the Director of Immigration, prompting the resumption of the applicant’s Entry Application. If all requirements are met, the Director of Immigration will grant formal approval and issue permission to stay in Hong Kong for a period not exceeding 24 months to both the applicant and their dependants.

Step 5: Portfolio maintenance requirements assessment

Upon expiry of the initial 24-month period, the applicant is required to approach New CIES Office a third time before applying for an extension of stay from Director of Immigration. The New CIES Office will issue certifying proof to the applicant and notify the Director of Immigration accordingly.

Step 6: Extension of stay

Upon receiving the certifying document from the New CIES Office, the applicant and their dependants may apply for an extension of stay through the Director of Immigration. If approved, the extension will be granted for a period not exceeding three years.

Step 7:  Permanent residence and unconditional stay

After maintaining continuous residence in Hong Kong for a minimum of seven years and fulfilling all other relevant requirements stipulated under the Immigration Ordinance (Cap.115), the applicant and their dependants may apply for Hong Kong permanent residence through the Director of Immigration.

Alternatively, if the applicant has continuously met the Portfolio Maintenance Requirements for at least seven years but is unable to fulfill the continuous residence requirement, they and their dependents may apply for unconditional stay through the Director of Immigration following the seventh year.

E. Conclusion

Benefits of the New CIES programme in Hong Kong

The New CIES programme presents a compelling opportunity for high-net-worth individuals seeking to establish a presence in Hong Kong. While this memorandum focuses on the investment requirements and application procedures, it is important to highlight some key advantages for potential applicants:

1. Stamp duty exemption: The programme provides relief from paying Buyer’s Stamp Duty and New Residential Stamp Duty on residential property purchased in Hong Kong.
2. Dependent visas: The programme allows successful applicants to bring their families to Hong Kong on dependent visas, making it easier to relocate and maintain family unity.
3. International business hub: As Hong Kong is a global financial centre, it provides access to international markets, business opportunities and a thriving professional network.

The New CIES programme signifies a strategic initiative by the Hong Kong Government to attract global investment, nurture a thriving financial ecosystem and solidify its position as a leading international asset and wealth management centre. The programme’s benefits extend beyond financial incentives, offering a pathway to residency, access to a dynamic business environment and a family-friendly environment for high-net-worth individuals seeking to establish a presence in Asia.