Hong Kong expands its moves.

On December 19, the Secretary for Financial Services and the Treasury of the Hong Kong Special Administrative Region Government, Mr Hui Ching-yu, officially announced the details of the new “Capital Investor Entry Scheme”. According to the plan, applications will begin to be accepted in the middle of next year. Eligible applicants who invest HK$30 million or more in Hong Kong can apply to enter Hong Kong. Among them, a new “Capital Investor Entry Plan Investment Portfolio” of HK$3 million has been set up for investment projects, mainly related projects that are beneficial to Hong Kong's long-term development, such as innovation and technology.

According to reports, in the context of “robbing enterprises and talent”, the Hong Kong Special Administrative Region government has restarted the “Capital Investor Entry Program” after a lapse of 8 years, with the intention of attracting high-net-worth individuals and enterprises and driving Hong Kong's economic development.

Details of the “Capital Investor Entry Scheme” announced

In fact, at the end of October, the Chief Executive of the Hong Kong Special Administrative Region, Li Jiachao, published the “Chief Executive's 2023 Policy Address,” which mentioned that in order to vigorously seize enterprises, seize talents, and retain talents, the “Capital Investor Entry Plan” will be re-implemented. The details will be announced within the year.

On December 19, according to China Central Radio and Television's Greater Bay Area Voice, the Secretary for Financial Services and the Treasury of the Hong Kong Special Administrative Region Government, Mr Hui Ching-yu, officially announced the details of the “New Capital Investors Entry Plan”.

According to the plan, Hong Kong raised the entry threshold for capital investors from HK$10 million to HK$30 million. Investable assets include financial assets such as stocks and bonds, non-residential real estate, and support for the development of the innovation and technology industry and other key industries.

According to information, the plan will begin accepting applications in the middle of next year. The maximum amount invested in non-residential real estate is HK$10 million. In addition, according to regulations, an investment of HK$30 million must be divided into two parts, of which at least HK$3 million must be included in the “Capital Investor Entry Program Portfolio” to support the development of the innovation and technology industry and other key industries.

In addition, applicants must be foreign nationals aged 18 or above, Chinese nationals who have obtained foreign permanent resident status, residents of the Macao Special Administrative Region, and Chinese residents of Taiwan. Applicants can bring dependents to Hong Kong, including a spouse, same-sex and/or opposite-sex partner, and unmarried dependent children under 18.

Chan Wing-man, Deputy Secretary for Financial Services and the Treasury of the Hong Kong Special Administrative Region Government, pointed out that applicants can be allowed to stay in Hong Kong for 2 years, and apply for an extension of 3 years after the expiration of the 3-year period, that is, a total of “2+3+3”. If the applicant has lived continuously in Hong Kong for no less than 7 years, they can apply to become permanent residents. They can freely dispose of their assets in the future, and also enjoy the “exemption from levies” arrangement for home purchases.

Xu Zhengyu pointed out that there is currently no target for the number of applicants. If we calculate that there were an average of 4,000 applications per year in the past, assuming that all of them are new funds, the capital brought to Hong Kong will be 120 billion Hong Kong dollars. Compared to investment immigration programs in other regions, Hong Kong's program threshold is attractive and the investment portfolio is rich. The Hong Kong plan will not collide with the High Talent Connect Program. Because of the “different customer base”, the entry program for new capital investors attracts high-net-worth individuals, while High Talent Attracts professionals with individual skills.

Restart after a lapse of 8 years

The entry plan for Hong Kong capital investors announced this time is a plan that Hong Kong has launched again after a lapse of 8 years.

Going back to the past, as early as 2003, in order to revive the depressed economy hit hard by “SARS,” the Hong Kong Special Administrative Region Government first introduced the “Capital Investor Entry Program”. The purpose is to allow investors interested in investing no less than HK$6.5 million in capital in Hong Kong but not participating in business in Hong Kong to settle in Hong Kong.

In October 2010, the HKSAR Government made adjustments to this immigration policy. After the revision, the filing requirement was raised from HK$6.5 million to HK$10 million, and required that the amount invested in real estate be excluded.

Since then, in 2015, the Hong Kong Special Administrative Region Government has halted this policy. At the time, a spokesman for the Hong Kong Special Administrative Region Government said that when the “Capital Investors Entry Program” was implemented in 2003, it coincided with the economic downturn in Hong Kong, and there was a need to attract foreign investment to Hong Kong to stimulate economic growth. Considering the economic situation of the Special Administrative Region, the focus should no longer be on attracting capital investors to Hong Kong, but rather on attracting talents, professionals, and creative entrepreneurs to Hong Kong.

On August 18, 2023, G19 members of the Hong Kong Legislative Council of China met with the Chief Executive of the Special Administrative Region, Lee Ka-chao, and submitted a number of joint initiatives on the “2023 Policy Address”, including speeding up the implementation of a new version of the “Capital Investor Entry Plan”, with a proposed investment threshold of not less than HK$30 million.

According to reports, the Hong Kong region, as a window to China and even Asia, needs more enterprises, talents, and high-net-worth people to drive Hong Kong's economic development. However, the improvement of Hong Kong's welfare and education system, very friendly corporate and personal taxes, and various policies that are at the forefront still have great investment appeal for high-net-worth individuals.

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