NEW CIES

The Government of the Hong Kong Special Administrative Region (the “Government”) recently announced the New Capital Investment Entrant Scheme (the “Scheme”). The Scheme is designed to encourage asset owners to move to the city and take advantage of its varied investment options. The New CIES Office, part of Invest Hong Kong, evaluates the financial assets and investments of applicants and ensures ongoing adherence to investment and portfolio rules. Meanwhile, the Immigration Department manages visa and residency applications related to the Scheme. The following is a summary of the Scheme:

Eligibility Criteria

• Age: Applicants must be at least 18 years old when applying.
• Scope: The Scheme is open to:
  • Foreign nationals
  • Chinese nationals with permanent residency in a foreign country
  • Macao Special Administrative Region residents
  • Chinese residents of Taiwan
• Net Assets:
  • Applicants must show that for the two years before applying, they have had net assets or net equity worth at least HK$30 million.
• Investment Requirements:
  • Applicants must invest at least HK$30 million in permissible investment assets after the Scheme’s launch date or within 180 days before applying, whichever is later.
  • This investment must be maintained:
    • From the launch date or 180 days before the net asset assessment application date, up to the application date; or
    • From the launch date or 180 days before the scheme application date, up to 180 days after receiving preliminary approval; or
    • From the date of receiving preliminary approval up to 180 days after.
  • If investing in certificates of deposits, this must be done within 180 days after receiving preliminary approval.
• No Adverse Record:
  • Applicants must not have any adverse immigration record and must meet normal immigration and security requirements.
• Self-support:
  • Applicants must demonstrate the ability to support themselves and their dependents without relying on returns from the investment, employment, or public assistance in Hong Kong.

Minimum Investment Threshold

• Applicants must invest a minimum of HK$30 million in permissible investment assets, which does not include assets acquired before the Scheme’s launch date.

Administration

• The New CIES Office under InvestHK will assess and monitor the financial assets and investments of applicants.
• The Immigration Department (ImmD), under the direction of the Department of Immigration (Doi), will handle visa/entry permit applications and extensions related to the Scheme.

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Timeline of New CIES Application Process and Requirements

1. Pre-Application Phase:

Net Asset Verification:

Applicant provide the supporting documents to us for verification and preparation of the Fulfillment document for Net Asset Requirement.

Applicant must engage submit an application for Net Asset Assessment to the New CIES Office within 14 calendar days from the issuance of the Fulfillment document.

2. Application Submission Phase:

Initial Contact:

Applicant approaches New CIES Office for verification of Net Asset Requirement.

Documentation:

Provide all relevant supporting documents, including a valuation report for non-publicly traded assets.

Communication Channels:

Applicant must provide primary and secondary (if any) email addresses for communication.

3. Post-Verification and Investment Phase:

Net Asset Confirmation:

New CIES Office issues certifying proof of Net Asset Requirement fulfillment.

Entry Application:

Applicant submits an Entry Application to Doi within the certifying proof’s validity period.

Investment Window:

Applicant receives a visa/entry permit valid for up to 180 days.

Applicant must make the committed investment within this timeframe.

4. Ongoing Compliance and Extension Phase:

Investment Verification:

Applicant provides proof of fulfilling Investment Requirements to New CIES Office.

First Extension:

Initial 24-month Stay: Applicant is granted permission to stay for up to 24 months.

3 Months Before Expiry: Applicant approaches New CIES Office to verify Portfolio Maintenance Requirements.

Extension Application: Applicant applies for an extension of stay with Doi before the current stay expires.

Further Extensions: Extensions for not more than three years are granted upon compliance and application following the same procedures.

5. Permanent Residency and Unconditional Stay Phase:

Permanent Residency:

After not less than seven years of continuous ordinary residence, apply for permanent residency.

Unconditional Stay:

Alternatively, after seven years of fulfilling Portfolio Maintenance Requirements, apply for unconditional stay.

Certifying Proof: Obtain verification from New CIES Office before applying to Doi.

6. Review and Compliance Phase:

Review Request:

If disagreeing with the assessment, the applicant may apply for review within 14 calendar days of notification.

Document Submission:

At any stage, DGIP and Doi may request necessary documents to assess eligibility under the Scheme.

Failure to comply with the submission timelines, investment requirements, or to provide necessary documents can result in disqualification from the Scheme or discontinuation of the application.

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Summary of Permissible Investment Assets for CIES

I. Permissible Financial Assets

Applicants/Entrants must invest at least HK$27 million into one or more of the following financial assets:

1. Equities:
   • Shares of companies listed on the SEHK and traded in HKD or RMB.
2. Debt Securities:
   • Listed on the SEHK and traded in HKD or RMB, including those issued by the Ministry of Finance of the People’s Republic of China and local Mainland governments.
   • Debt instruments in HKD or RMB, must be fixed or floating rate, convertible bonds issued or fully guaranteed by:
     • The HK Government, Exchange Fund, HK Mortgage Corporation, MTR Corporation Limited, HK Airport Authority, and other specified governmental bodies; or
     • Listed companies as per Equities.
3. Certificates of Deposits:
   • HKD or RMB-denominated certificates issued by authorised institutions, with a term to maturity of at least 12 months at acquisition, subject to a 10% cap (HK$3 million) of the minimum investment threshold. These must be acquired post-Approval-in-Principle and held beneficially until maturity, at which point they must be replaced with similar or other permissible assets.
4. Subordinated Debt:
   • HKD or RMB-denominated subordinated debt issued by authorised institutions as per Banking (Capital) Rules.
5. Eligible Collective Investment Schemes:
   • SFC-authorised funds, REITs, Investment-Linked Assurance Schemes, and OFCs, all managed by licensed or registered corporations with the SFC for Type 9 regulated activity.
6. Ownership interest in LPFs:
   • Investment in private LPFs and private OFCs is capped at an aggregate of HK$10 million.

II. Non-residential Real Estate

Investment can also be made in non-residential real estate in Hong Kong, including commercial and industrial properties, with a cap of HK$10 million. This excludes residential usage, illegal structures, and temporary dwellings.

III. CIES Investment Portfolio (CIES IP)

In addition to the above, applicants are required to invest HK$3 million into a CIES IP managed by HKIC, targeting investments in companies/projects with a Hong Kong nexus in strategic industries. This investment is locked-up and not guaranteed for capital preservation or dividends.

Compliance

• Applicants must follow the terms for the CIES IP investment and can deposit the required HK$3 million in a designated account with a financial intermediary.
• The HKIC or New CIES Office will provide the procedures for transferring this amount into the CIES IP.
• If the HK$3 million is lost before it can be invested in the CIES IP, the Applicant must replenish the full amount in the designated account.

The summary outlines the permissible investment assets under the CIES, indicating the types of financial instruments and real estate that are eligible for investment, along with the additional requirement to invest in the CIES IP.

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Details of the Scheme are set out in the Government websites:

1. New Capital Investment Entrant Scheme Office: www.newcies.gov.hk
2. Immigration Department: www.immd.gov.hk