On October 25, 2023, the Chief Executive of Hong Kong announced the launch of the New Capital Investment Entrant Scheme (New CIES), reviving a program that had been dormant since January 2015. Officially relaunched on March 1, 2024, the New CIES aims to attract high-net-worth individuals to invest in Hong Kong, fostering business and employment opportunities, particularly in the financial services, innovation, and technology sectors.
Eligibility and Investment Requirements
Applicants under the New CIES must demonstrate a net asset value of at least HK$30 million for the two years preceding their application. They must commit to investing the same amount in designated assets within Hong Kong. Notably, investments made prior to March 1, 2024, are ineligible for consideration under the scheme.
Permissible Investments
The investment breakdown under the New CIES includes:
- A mandatory HK$3 million locked into the CIES Investment Portfolio managed by the Hong Kong Investment Corporation Limited, targeting local innovation and strategic industries.
- HK$27 million must be invested in eligible financial assets or non-residential real estate, with specific caps on certain asset types to ensure diversification and support for strategic economic sectors.
Regulations and Opportunities
Investors must adhere to strict guidelines on maintaining and reinvesting their portfolios. Financial assets can be liquidated or realized, but equivalent values must be reinvested in permissible assets to maintain the integrity of the investment commitment.
The scheme not only facilitates investment but also provides a path to permanent residency in Hong Kong after seven years of continuous residence, with additional provisions for unconditional stay and disposal of investments after this period.
Economic Impact and Strategic Enhancements
The New CIES is set to significantly impact Hong Kong’s economy by attracting substantial foreign capital. The initiative coincides with extended incentives for setting up open-ended fund companies and real estate investment trusts, enhancing Hong Kong’s appeal as a financial hub.
Additionally, the broadening of permissible investment assets and increased investment thresholds signal a robust strategy to draw more substantial and diverse investments compared to the original scheme. This strategic shift is expected to bolster Hong Kong’s position in global financial markets and attract family offices, with recent tax concessions and regulatory enhancements further sweetening the deal for potential investors.
Overall, the New CIES represents a sophisticated effort by the Hong Kong government to revitalize its economy by attracting wealthy investors and diversifying its economic base, ensuring long-term growth and stability.
