Launched in March 2024, the New Capital Investment Entrant Scheme (New CIES) makes investing in Hong Kong easier for eligible individuals. The program is set to create more opportunities for foreign investors, while consolidating Hong Kong’s status as a global financial center.
The Hong Kong government has launched the New Capital Investment Entrant Scheme (hereinafter, “New CIES”), a program designed to attract investors, create more investment opportunities, and strengthen Hong Kong’s role as a global financial hub.
Effective from March 1, 2024, the New CIES allows eligible individuals, including foreign nationals and Chinese nationals with foreign permanent residency, to secure residency in Hong Kong through investments in approved ventures.
In this article we outline the New CIES requirements and key features.
What is the New CIES?
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Announced in the 2023-2024 Budget, the New CIES aims at bolstering Hong Kong’s talent pool and drawing in increased capital investment to the region. It is one of the eight policy measures outlined in the Policy Statement on Cultivating Family Office Enterprises in Hong Kong, released by the Financial Services and the Treasury Bureau in March 2023.
The New Capital Investment Entrant Scheme Office (New CIES Office) within Invest Hong Kong is responsible for evaluating the financial assets and investments of applicants/entrants under the New CIES. It also ensures their continued compliance with the Investment Requirements and Portfolio Maintenance Requirements. Meanwhile, the Department of Immigration (DoI) handles the review of applications for visas/entry permits, extensions of stay, and unconditional stays in alignment with the New CIES.
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What are the eligibility criteria?
Subject to the provisions outlined in the Rules for the New Capital Investment Entrant Scheme (New CIES Rules), applicants must meet the several criteria to be eligible to apply to the DoI for a visa/entry permit to enter or reside in Hong Kong under the New CIES.
The eligibility criteria are highlighted in the table below.
| Eligibility Criteria of the New CIES in Hong Kong | |
| Category | Eligibility requirements |
| Age | Applicants must be 18 or above. |
| Nationality/Residence | The following groups of individuals are eligible to apply:
Foreign nationals; Chinese nationals who have obtained permanent resident status in a foreign country; Macao residents; and Chinese residents of Taiwan.
Notably, nationals from Afghanistan, Cuba, and the Democratic People’s Republic of Korea are not eligible to participate. The list of excluded countries/regions may be periodically reviewed by the Security Bureau and the Immigration Department.
|
| Net asset requirement | Applicants must possess net assets valued at a market value of at least HK$30 million consistently for the two years prior to submitting the application for net asset assessment. |
| Investment in Permissible Investment Assets | Investment of not less than HK$30 million net in Permissible Investment Assets on/after March 1, 2024. |
| No adverse record | Applicants must demonstrate that they have no adverse immigration record and meets normal immigration and security requirements. |
| Capability to independently support themselves and dependents
|
Applicants must prove to DoI that they have the capacity to sustain themselves and their dependents, if any, without depending on any returns from Permissible Investment Assets, employment, self-employment, office, business, or public assistance in Hong Kong.
Additionally, the entry of dependents will be subject to any other policy applicable to such entry at the time. |
What are the “Permissible Investment Assets”?
With reference to investments in Permissible Investment Assets, the HK$30 million investment must include both following types of investments:
- HK$3 million investment in CIES investment portfolio; and
- HK$27 million investment in Permissible Investment Assets.
The CIES investment portfolio refers to an investment portfolio overseen by the Hong Kong Investment Corporation Limited. Its focus is on investing in companies and projects closely linked to Hong Kong, particularly those in the innovation and technology sectors, as well as other strategic industries that contribute to the long-term growth of Hong Kong’s economy.
The investment in Permissible Investment Assets totaling HK$27 million may comprise various financial assets (referred to as Permissible Financial Assets) and non-residential real estate, including:
- Equities
- Debt securities
- Certificates of deposits (subject to a cap of HK$3 million)
- Subordinated debt
- Ownership interest in limited partnership funds registered under the Limited Partnership Fund Ordinance (subject to a cap of HK$10 million)
- Eligible collective investment schemes
- Non-residential real estate (subject to a cap of HK$10 million)
What are the portfolio maintenance requirements?
Applicants must deposit their permissible financial assets into a designated account operated by an eligible financial intermediary. These include:
- Authorized Institutions under the Banking Ordinance (Cap. 155 of the Laws of Hong Kong);
- Corporations licensed for Type 1 or Type 9 regulated activities under the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong); and
- Insurers permitted to conduct Class C business as specified in Part 2 of Schedule 1 under the Insurance Ordinance (Cap. 41 of the Laws of Hong Kong).
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Applicants may maintain a maximum of three accounts, each with a different category of financial intermediary as mentioned above. The account holding the Permissible Financial Assets must be in the applicant’s name.
If the market value of Permissible Investment Assets exceeds HK$30 million, applicants are prohibited from withdrawing any capital gains. However, they are allowed to withdraw cash dividends, interest income, and rental income generated from the Permissible Investment Assets.
What is the application procedure?
When applying to the New CIES, applicants should follow these steps:
- Verification of net asset requirement: Engage a Certified Public Accountant to conduct a net asset assessment and obtain verification from the New CIES Office.
- Grant of approval-in-principle and visa/entry permit: Submit an entry application to the DoI, including certified proof of meeting the net asset requirement issued by the New CIES Office. Upon completing an immigration assessment, an entry permit will be issued for making investments, valid for up to 180 days.
- Verification of investment requirements: Seek verification from the New CIES Office that the investment requirements have been fulfilled.
- Formal approval of application: Submit the certified proof issued by the New CIES Office to the Director of Immigration. Upon approval, a 24-month permission to stay will be granted, contingent upon continuous compliance with New CIES requirements.
- Extension of stay for up to 3 years: After the initial 24-month period, applicants may apply for a 3-year extension, typically granted if all eligibility requirements are met.
- Further extension of stay for up to 3 years: Subsequent 3-year extensions may be sought after the initial extension expires.
Upon continuously residing in Hong Kong for 7 years, the applicant and their dependents, if any, may apply to the DoI to obtain permanent residency in Hong Kong. If granted by the DoI, the applicant is permitted to sell or dispose of the Permissible Investment Assets under the New CIES, while adhering to the terms and conditions of the investments.
Key takeaways
The New CIES focuses primarily on initiating and maintaining the required investment in Hong Kong, without adding extra requirements related to the applicant’s work experience or academic qualifications in the city.
Notably, the launch of the New CIES in March 2024 aligns with the recent extension of the Grant Scheme for Open-ended Fund Companies and Real Estate Investment Trusts (REITs) by the Hong Kong government until mid-2027.
Moreover, companies in Hong Kong can benefit from a myriad of government support and funding schemes. These include funding programs to boost business competitiveness, support research and innovation, cultivate talent, and nurture startups.
All these intertwined moves position Hong Kong as an attractive destination for investment, innovation, and economic growth.
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Dezan Shira & Associates assists foreign investors into China and has done so since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Haikou, Zhongshan, Shenzhen, and Hong Kong. We also have offices in Vietnam, Indonesia, Singapore, United States, Germany, Italy, India, and Dubai (UAE) and partner firms assisting foreign investors in The Philippines, Malaysia, Thailand, Bangladesh, and Australia. For assistance in China, please contact the firm at china@dezshira.com or visit our website at www.dezshira.com.
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