New and Revamped: The Capital Investment Entrant Scheme (“New CIES”)

What is the Capital Investment Entrant Scheme? 

The original Capital Investment Entrant Scheme (CIES) was introduced in 2003 to facilitate the entry of individuals seeking residence in Hong Kong through capital investment. Its purpose was to attract capital inflow, stimulate economic growth, and generate employment opportunities, however this scheme ended in 2015. Recently the Hong Kong Government has re-released the scheme offering eligible individuals the opportunity to migrate to Hong Kong. 

The New Capital Investment Entrant Scheme 

The new version of the Capital Investment Entrant Scheme (CIES), which commenced on the 1st of March,2024, aims to attract individuals to Hong Kong through capital investment while considering the latest market developments and policy considerations. Eligible applicants for admission into Hong Kong under the CIES include foreign nationals, Chinese nationals who have obtained permanent resident status in a foreign country, Macao Special Administrative Region residents, and Chinese residents of Taiwan. 

To be eligible, applicants must be 18 years or above at the time of applying and must demonstrate net assets of at least HK$30 million (or equivalent in foreign currencies) for the preceding two years. They should have no adverse immigration record and must meet normal immigration and security requirements. 

Applicants may be allowed to bring in dependents, such as spouses or unmarried dependent children aged under 18 years, provided they can support and accommodate themselves and their dependents without relying on any return on the permissible investment assets, employment, or public assistance in Hong Kong. 

The minimum investment threshold for the CIES is HK$30 million, which must be invested in permissible investment assets. These assets include equities (shares of companies listed on the Stock Exchange of Hong Kong), debt securities (including those listed on the SEHK and issued by the Ministry of Finance of the People's Republic of China), certificates of deposits, subordinated debt, eligible collective investment schemes (such as SFC-authorized funds and real estate investment trusts), ownership interest in limited partnership funds, and non-residential real estate in Hong Kong (subject to a cap of HK$10 million). 

New CIES investment Portfolio 

Under the new CIES, each applicant is required to invest HK$3 million in a new CIES Investment Portfolio managed by the Hong Kong Investment Corporation Limited. The Portfolio focuses on investing in companies and projects related to Hong Kong, particularly in innovation and technology (I&T) industries and other strategic sectors for the long-term development of the economy.  

While there are no guarantees for capital preservation or dividends, distributions may be made at appropriate times based on factors like the progress of the Portfolio, policy objectives, and operational considerations. Detailed design for the Portfolio will be developed, considering legal advice and operational factors. 

Requirements when maintaining your portfolio 

Under the new CIES, portfolio maintenance requirements are in place to ensure that an applicant's investments qualifying their entry and stay in Hong Kong are protected. The applicant must deposit their financial assets into a designated investment account operated by an eligible financial intermediary, such as an authorized institution, a licensed corporation, or an insurer.  

The designated account should be used exclusively for permissible investment assets, and the committed investment should not be reduced while staying in Hong Kong. However, there is no requirement to top up the investment if its market value falls below the minimum threshold. Switching between permissible financial assets and non-residential real estate is allowed if the trading proceeds are fully reinvested and proper records maintained. Cash dividends or interest income can be withdrawn, but the applicant should not withdraw cash or investment from the designated account or use the investment portfolio as collateral for indebtedness.

Non-Residential Investment   

The financial intermediary engaged by the applicant is responsible for customer due diligence and providing periodic reports to the government. Regarding non-residential real estate, there are no restrictions on the number of properties acquired, but only equity investment in real estate counts towards the minimum investment threshold. Mortgage loans can be obtained, but only the equity portion is considered for the CIES. Refinancing is allowed without increasing the loan or realizing capital gains. Selling real estate and reinvesting the proceeds in permissible assets is permitted. Rental income from non-residential real estate is retained by the applicant. Additional equity paid for real estate valued over HK$10 million is not counted towards the qualifying investment, but the applicant can still qualify by investing the entire sale proceeds (after deducting the additional equity) in permissible assets.  

The applicant is required to provide transaction details and documentation to Invest Hong Kong and declare their ownership status and any changes concerning non-residential real estate. 

Application Procedures and more 

InvestHK is responsible for assessing whether the applications meet the financial requirements outlined in paragraphs 4(c) and 6 to 15. On the other hand, the Immigration Department (ImmD) handles the assessment of visa/entry permit applications, extensions of stay, and unconditional stay. These two departments maintain close communication regarding the application process. 

The applicant must first submit an application to InvestHK to assess their compliance with the financial requirements. Once InvestHK verifies that the applicant meets the net asset requirement, they can then submit an entry application to ImmD for a visa/entry permit to enter Hong Kong for residence. After an initial approval from the immigration perspective, ImmD will grant the applicant a visa/entry permit to enter Hong Kong as a visitor for a maximum of 180 days to make the committed investment. 

Upon completion of the committed investment and verification by InvestHK that the investment requirements are met, ImmD may grant formal approval of the entry application. Permission to stay is typically granted for up to 24 months, subject to the condition that the applicant continues to meet the requirements under the new CIES throughout this period. After the 24-month period, the applicant and their dependents can apply for an extension of stay for up to three years. Subsequently, they can apply for further stay extensions for up to three years each, if they continue to meet the requirements under the new CIES. 

After a continuous ordinary residence in Hong Kong of at least seven years, the applicant and their dependents can apply for Hong Kong permanent residency. If the continuous ordinary residence requirement is not fulfilled, but the financial requirements under the new CIES are continuously met for at least seven years (as verified by InvestHK), applicants can apply to ImmD for unconditional stay in Hong Kong. If approved, the applicant will be free to dispose of the invested assets. 

If you need assistance regarding the scheme, feel free to reach out to us through our respective channels or click on the websites below that meet your needs.

Useful Links  

Immigration Department - https://www.immd.gov.hk/eng/services/visas/newcies.html 

Rules for the New Capital Investment Entrant Scheme - 
https://www.newcies.gov.hk/assets/pdf/scheme-rule-en.pdf

InvestHK- https://www.newcies.gov.hk/en/index.html 

For expatriate services regarding migrating to hong kong please take a look at 
CBH-Asia http://www.cbhasia.com/