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The New CIES (New Capital Investment Entrant Scheme) is a strategic initiative revamped on 1 March 2024 by the Hong Kong Government aiming to attract high-net-worth individuals, encouraging them to invest and settle in the city. The scheme is comparable to ‘Golden Visa’ schemes, as offered by other countries. By leveraging Hong Kong’s strong position as a global financial hub, the New CIES aims to enhance economic growth, foster wealth management, and strengthen the city’s competitive edge.
Author: Anna Lau, Partner
The primary objective of the New CIES is twofold: attract new capital and enhance Hong Kong’s talent pool. New capital is attracted by inviting high-net-worth individuals, who if successful, inject fresh funds into the local economy. Successful applicants are also likely to actively participate in the city’s economic activities, sharing vital skills through training, thereby enhancing the local talent pool.
To be eligible under the scheme, applicants must be at least 18 years of age and require an absolute beneficial entitlement to net assets with a market value of at least HK$30 million throughout the two years preceding the application. Once proven, the applicant needs to commit to invest a minimum of HK$30 million in permissible assets within Hong Kong and maintain that level for a period of no less than 7 years. After 7 years, a New CIES participant would be eligible to apply for Hong Kong’s permanent resident status, whereby if approved, the rights of abode and employment granted through the New CIES scheme would become superfluous.
As mentioned, the crux of the scheme hinges on the minimum investment of HK$30 million, which if a candidate is eligible, should be invested in at least 2 ways through at most 3 financial intermediaries.
Firstly, a minimum of HK$3 million needs to be placed into a new CIES IP (CIES Investment Portfolio), forming a key ‘new’ component of the revamped CIES. The CIES IP is set up and managed by the HKIC (Hong Kong Investment Corporation). The HKIC is a wholly owned entity of the Hong Kong SAR Government, active for about 2 years now, aiming to optimize the use of financial reserves to promote industry development and enhance Hong Kong’s long-term competitiveness.
The remaining balance of at least HK$27 million can be invested in a range of other permissible investment assets, including:
equities;
debt securities;
certificates of deposit;
eligible collective investment schemes (ECIS);
limited partnership funds (LPFs, capped at HK$10 million);
stock exchange products; and
non-residential real estate (capped at HK$10 million).
Update: As announced in the 2024 Policy Address, with effect from October 16, 2024, an applicant under the New Capital Investment Entrant Scheme (New CIES) is allowed to invest in residential properties, provided that the transaction price of a single property must be HK$50 million or above. The capped amount of HK$10 million that can go towards reaching the remaining balance of at least HK$27 million, remains unchanged.
Chief purpose is to make investments in companies and projects that have a Hong Kong nexus. By supporting the development of I&T industries and other strategic sectors, the CIES IP contributes to the long-term development of Hong Kong’s economy. Additionally, it diversifies investments under the New CIES to mitigate risks moderately.
Investments in local entrepreneurs are permitted as well, in the form of funding business and startups, thereby fostering innovation and job creation. New CIES applicants would see themselves supported by other departments of InvestHK, Hong Kong’s local FDI department, of which the New CIES Office is also a part.
Application under the New CIES is handled by the New CIES Offices (for financial assessment) and the Immigration Department (for visa/entry permit application) respectively. Documents need to be submitted either in English or Chinese. To start the process, the applicant should:
Initiate a Net Asset Assessment with a CPA (Certified Public Accountant) and submit it to the New CIES Office for verification and certification;
Submit an Entry Application to the Director of Immigration accompanied by the certificate issued by the New CIES Office confirming eligibility under the Net Asset Requirement. The Immigration Department, upon approval-in-principle, will then grant a visa/entry permit to the applicant for entering Hong Kong on visitor status (permitting stay for not more than 180 days), allowing the applicant to initiate or complete permissible investments under the scheme;
Once the applicant has made the Investment Requirements, approach the New CIES Office for fulfilment accreditation. The Applicant needs to engage the CPA at his/her own cost to assist in verification of fulfilment of the Investment Requirements;
Upon accreditation by the New CIES Office, apply to the Immigration Department for reviewing his/her immigration file. Upon completion of assessment, the Immigration Department will grant a Formal Approval to the applicant and his/her dependants (if any) who can stay in Hong Kong for not more than 24 months, subject to the continuous compliance of the New CIES requirements throughout the period.
Assuming eligibility requirements under the New CIES scheme are continuously met, extensions of stay may be applied for (on a 2 year +3 year +3 year basis).
As the crux of the scheme hinges around the minimum investment of HK$30 million, the applicant’s compliance will be under continuous monitoring by the New CIES Office, who will request participation in regular assessments of the portfolio maintenance. Non-compliance may result in revocation of the applicant’s visa or entry permit. Any changes in the portfolio must be communicated within 7 working days to the New CIES Office. Annual updates must be communicated by initiative of the applicant / entrant for the duration of the scheme.
With the New CIES setting a value of investments and an absence of adverse records as the only conditions, it is an attractive, albeit elite, entry to establishing oneself in the Hong Kong SAR: requirements on work experience, academic qualifications or language skills are not set.
The New CIES fits well into Hong Kong’s continued efforts in bolstering its position as a financial hub and focal point of asset management and financial services in the region. The revamping of the CIES follows in a strong current that also sees the expansion of the re-domiciliation regime and extension of the Grant Scheme for Open-ended Fund Companies and Real Estate Investment Trusts (Grant Scheme) to mid-2027.
Last but not least, although Hong Kong already had a CIES in place prior to the March revamp (which had been terminated), the New CIES differs from the previous one in:
The new scheme sees an increase in the minimum investment from HK$10 million to HK$30 million;
The new scheme requires the investment in the CIES IP;
The new scheme specifies investments needing to be made in HKD or RMB.
The market so far seems to be sympathetic, with our firm noticing an uptick in requests by existing and new clients to support re-domiciliation (as recently covered in an article on our website) and to establish OFCs and LPFs in Hong Kong.
To find out more about the New CIES scheme, feel free to email or call us.
Disclaimer: This publication is general in nature and is not intended to constitute legal advice. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.
For specific advice about your situation, please contact:
Partner
+852 2388 3899
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