Revitalizing Hong Kong: The New Capital Investment Entrant Scheme’s Impact and Potential
An article written by Henry Fan IMCM, CEO at Globevisa Group.
According to Press Releases from Invest Hong Kong on July 3, 2024, since the reopening of the new Hong Kong Capital Investment Entrant Scheme (new CIES) for applications on March 1, 2024, more than 300 applications have been accepted. If all these 300 applications are completed on schedule, the Hong Kong Government can obtain an investment of at least HK$10 billion, which is equivalent to US$1.3 billion. Four and a half months have passed, and three applications got formal approved.
History of the Capital Investment Entrant Scheme
Initially launched on October 27, 2003, the original CIES mandated an initial investment of HK$6.5 million across diverse asset classes including real estate, during a recession when Hong Kong sought new capital influx to stimulate the economy. Seven years later, in response to a significant increase in application numbers, the government raised the investment requirement to HK$10 million and discontinued the option for property investments in 2010.
Throughout its operational history, the original CIES accumulated a total of HK$314.5 billion (approximately US$40 billion), with 14% attributed to real estate and 86% to financial assets. Following the abrupt halt of the CIES on January 15, 2015, then Chief Executive Mr. Leung Chun-ying emphasized Hong Kong’s focus on attracting talent over money. The city shifted its attention to promoting talent admission programs such as the Quality Migrant Admission Scheme (QMAS).
Comeback of the CIES in 2023
On 22nd February, 2023, the city’s Financial Secretary Chan Mo-po announced the comeback of the CIES, stating in Budget Speech,
“With a view to further enriching the talent pool and attracting more new capital to Hong Kong, we will introduce a new Capital Investment Entrant Scheme. Applicants shall make investments at a certain amount in the local asset market, excluding property. Upon approval, they may reside and pursue development in Hong Kong.” Attracting affluent individuals for local investments remains a central focus in Hong Kong’s immigration policies.
High hopes from the SAR Government
Mr. Benson Kwok Joon Fung, Director of Hong Kong Immigration Department, explained the new CIES as a part of a bigger plan:
“The Government has introduced various policies to attract talent and capital to Hong Kong, including the New CIES. We have approved the first batch of entry applications and are actively processing other applications. I believe the New CIES will bring new vitality and opportunities to Hong Kong. The Immigration Department will continue to collaborate closely with InvestHK to create an even more business-friendly environment in Hong Kong.”
However, official statistics can be intriguing to tell the government’s determination to attract capital.
Current Status and Popularity of the New CIES
Since InvestHK opened the application for the new CIES from March 1 to June 30, 2024, the official data released is as follows:
– 3,700 enquiries were accepted, and the number of asset applications received was 339, accounting for 9.1% of the inquiries.
– The Hong Kong Immigration Department issued a total of 88 principle approvals, accounting for 25.96% of the total number of applications.
– 3 cases have completed an investment of HK$30 million and have received the official approval letter, accounting for 0.88% of the total number of applications.
– InvestHK has anticipated an expected investment amount of over HK$10 billion to be brought into Hong Kong.
Mrs. Alpha Lau Hoi-chuen, Director-General of InvestHK, expressed her targeted investment amount of the new CIES:
“The New CIES brings a vast pool of talents to Hong Kong, attracting successful businessmen and innovative entrepreneurs, and with current application numbers an expected investment of over HK$10 billion (if more than 300 applications are all approved) to enhance the developmental strengths of Hong Kong’s asset and wealth management industry. InvestHK and the Immigration Department have been working closely together on the New CIES and will continue to deepen co-operation to further strengthen Hong Kong’s appeal as a business hub.”
It is interesting to note that, neither InvestHK nor Mrs. Lau had openly confirmed a set quota or expected application number required by the SAR Government. Also, the 3,700 enquiries received by InvestHK cannot reflect the true popularity of the new CIES as most enquiries go directly to financial institutions and immigration agencies. From this perspective, despite the new CIES having raised the investment threshold compared to before, it remains popular and in high demand. The next question in the Asian immigration landscape will be “Can Hong Kong beat Singapore to regain its status as the Asian financial hub?”
