New Capital Investment Entrant Scheme (CIES)
The goal of the redesigned Capital Investment Entrant Scheme (New CIES), which was unveiled in the 2023–2024 Budget, is to attract more foreign investment to Hong Kong and expand the talent pool.
The goal of the redesigned Capital Investment Entrant Scheme (New CIES), which was unveiled in the 2023–2024 Budget, is to attract more foreign investment to Hong Kong and expand the talent pool. It is one of the eight policy directives outlined in the Financial Services and Treasury Bureau’s Policy Statement on Developing Family Office Businesses in Hong Kong, which was released in March 2023.
Applications for the New CIES were first accepted on March 1, 2024. The New Capital Investment Entrant Scheme (Rules) detailed rules were released.
This Legal Update, the first in a series of our articles on the New CIES, gives a summary of the eligibility standards and application processes outlined by the Rules. It also includes the kinds of assets that, in accordance with the New CIES, would be considered Permissible Investment Assets, with a special emphasis on non-residential real estate.
Eligibility Requirements for New CIES
To qualify for the Hong Kong New CIES 2024, applicants must meet the following requirements:
Age: Applicants must be aged 18 or above at the time of application.
Net Asset Requirement: Unrestricted right to use net assets having a market value of at least HK$30 million over the two years prior to the application date for the net asset assessment (Net Asset Requirement).
Nationality:
- Foreign nationals (other than nationals of Afghanistan, Cuba and North Korea);
- Chinese nationals who have obtained permanent resident status in a foreign country;
- Macao Special Administrative Region residents; or
- Chinese residents of Taiwan.
Investment: Applicants must make a qualifying investment of at least HKD 30 million in permissible investment assets within six months before submitting the application. Permissible investment assets include but are not limited to designated financial assets, such as stocks, bonds, and certificates of deposits, as well as eligible real estate properties in Hong Kong.
No Adverse Record: Fulfills standard immigration and security procedures and has no adverse immigration records.
Financial Support: Able to sustain and provide for himself and any dependents he may have independently in Hong Kong without receiving any compensation from government assistance, employment, self-employment, or permitted investment assets.
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Benefits of the Hong Kong New CIES
Participating in the Hong Kong New Capital Investment Entrant Scheme offers a range of benefits:
- Residency Status: Successful applicants and their dependents are granted the right to reside in Hong Kong for an initial period of two years, renewable for up to three years at a time, provided they continue to meet the scheme’s requirements.
- Flexibility in Investment Options: The NCIES allows individuals to choose from a wide range of eligible investment assets, including financial instruments and real estate, providing flexibility and control over their investment strategy.
- Access to World-Class Infrastructure: Hong Kong’s world-class infrastructure, robust legal system, and business-friendly environment offer investors a solid foundation for their ventures and open doors to various opportunities.
- Path to Permanent Residency: While the NCIES does not provide immediate permanent residency, successful applicants may be eligible to apply for Hong Kong Permanent Residency after seven years of continuous ordinary residence in Hong Kong.
Investment Options
The CIES offers investors a range of eligible investment options to fulfill the HKD 30 million investment requirement. These options include:
- Designated Financial Assets: Investments in designated financial assets such as stocks, bonds, and certificates of deposit issued by authorized financial institutions in Hong Kong.
- Eligible Real Estate Properties: Investments in eligible residential or commercial properties located in Hong Kong. The properties must be used solely for investment purposes and not for personal use.
It’s important to note that the investment assets must be held for a minimum period of three years from the date of approval of the application. However, investors are allowed to switch between different qualifying investment assets during this period.
Non-Residential Real Estate Investments Under the New CIES
Non-Residential Real Estate
Investments in non-residential real estate are eligible to be considered Permissible Investment Assets under the Rules, up to a maximum of HK$10 million. Stated differently, an applicant may purchase non-residential real estate for a higher amount, but under the New CIES, only HK$10 million will be recognized as Permissible Investment Assets.
Pre-completion non-residential properties and real estate with a mix of commercial and industrial applications are acceptable within the definition of non-residential real estate. Multipurpose real estate used partially for residential purposes is excluded, nevertheless.
Ownership Restrictions
One of the following must be the applicant’s method of holding the non-residential real estate:
- Name of the applicant;
- Through an application-named sole proprietorship; or
- Using a business in which the applicant holds a sole shareholder position.
The applicant or the applicant’s company must be the only owners of the non-residential real estate in order to meet the aforementioned condition. Real estate held jointly will not be included in the list of acceptable investment assets.
Property Resale
The non-residential real estate may be sold by the applicant, but all earnings must be reinvested in new Permissible Investment Assets. The applicant is entitled to withdraw the excess equity paid in the non-residential estate upon its sales if it is valued at more than HK$10 million.
The guidelines set deadlines for certain kinds of reinvestments. For instance, there must be a more than three-month interval between the date of the non-residential real estate contract sale and the date on which the purchase of the reinvested non-residential real estate is completed.
According to the Rules, in order for the Director-General of Investment Production of InvestHK (Director-General) to confirm whether the applicant has reinvested the necessary minimum level of equity in Permissible Investment Assets, all material transactions pertaining to the acquisition, disposal, and charging of the non-residential real estate must be proven to the satisfaction of the Director-General by providing the relevant documents, such as Land Registry records, bank statements, and professional valuation reports. The Director-General must be notified in writing by the applicant within seven working days after the sale of non-residential real estate and the purchase of new permissible investment assets.
Application Procedure for CIES
- Verification of Net Asset Requirement: Have a net asset evaluation performed by a Certified Public Accountant, and get confirmation from the New CIES Office.
- Grant of visa/entry permit and approval-in-principle: Submit your application to the Immigration Department together with the certified proof demonstrating you meet the net asset assessment. If approved-in-principle is granted, you will receive either an entry permit or a visa. With it, you will be able to travel to Hong Kong for up to 180 days in order to make investments under the New CIES.
- Verification of investment requirements: Ask the New CIES Office to confirm that the investment requirements have been fulfilled.
- Formal approval of application: Submit to the Director of Immigration the certified proof that was issued by the New CIES Office. After approval, a 24-month stay permit will be issued, provided that the New CIES standards are consistently met.
- Apply for extension of stay: Upon completion of the first 24-month term, candidates may request a three-year extension, which is normally approved if all qualifying conditions are satisfied.
- Further extension of stay for up to 3 years: After the first extension expires, further 3-year extensions may be requested.
The applicant and their dependants, if any, may apply for permanent residency in Hong Kong after living there continuously for seven years. The applicant may sell or otherwise dispose of the Permissible Investment Assets under the New CIES, subject to the terms and conditions of the investments.
Application Process
1
Book an appointment for a detailed assessment and consultation with our Immigration Specialist.
2
Based on the initial consultation and your profile, we will give you our reviews and advise you about the best option for your immigration needs.
3
Once you’re ready to proceed, we will prepare all necessary documents & complete the application and submit to Hong Kong Immigration.
4
We follow up and reply to inquiries coming from Hong Kong Immigration until the approval of the case. After approval, we deliver the visa to you.
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GET IN TOUCH WITH US
If you are qualified for this program and want us to review your profile, please contact us below.
