Launched in March 2024, the New Capital Investment Entrant Scheme (New CIES) represents a strategic initiative by the Hong Kong government to attract foreign investment and foster its position as a global financial hub. This innovative program is part of a broader effort explained in the 2023-2024 Budget and 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 CIES seeks to improve Hong Kong's pool of skilled people and increase investment, strengthening its role as a leading finance and business center.

The scheme is managed by the New Capital Investment Entrant Scheme Office within Invest Hong Kong, which evaluates applicants' financial assets and investments to ensure compliance with the Investment and Portfolio Maintenance Requirements. The Department of Immigration reviews applications for visas, entry permits, and residency extensions under this scheme.

The New CIES opens its doors widely yet with precise criteria, welcoming foreign nationals, Chinese nationals with overseas permanent residency, as well as residents from Macao and Taiwan, while excluding those from Afghanistan, Cuba, and North Korea. Eligible participants are those aged 18 and above, holding net assets worth a minimum of HK$30 million for the two years preceding their application. From March 1, 2024, onward, they must invest at least HK$30 million in allowed investment assets, split between HK$3 million in a designated CIES investment portfolio and HK$27 million across other sanctioned assets. These investments can range from equities and debt securities to certificates of deposit, subordinated debt, interests in limited partnership funds, approved collective investment schemes, and non-residential real estate.

Such investments should be placed in accounts managed by authorized financial intermediaries, with the stipulation that any capital gains over the initial HK$30 million investment cannot be withdrawn, though income generated from these investments remains accessible.

The application process involves net asset verification, filing an application with the Department of Immigration, investment validation by the New CIES Office, leading to the award of a visa or entry permit upon approval. This permit, initially valid for 180 days to facilitate the requisite investments, extends into a 24-month residency permit following investment confirmation. Extensions of up to three years are possible, and after a seven-year residency period, participants may seek permanent residency, potentially selling or liquidating their investments according to the scheme's guidelines.

The New CIES does not add extra requirements related to the applicant's professional experience or educational background within Hong Kong. This initiative aligns with the prolonged Grant Scheme for Open-ended Fund Companies and Real Estate Investment Trusts (REITs) until mid-2027, reflecting the government's dedication to stimulating investment, innovation, and economic development. With a comprehensive approach that includes many government support and funding programs, Hong Kong positions itself as an attractive place for investors looking to explore its vibrant business environment and flourishing financial sector.

The New CIES offers foreign investors a chance to not just invest in Hong Kong, but also secure residency. Simplifying the investment pathway and offering a straightforward route to permanent residency, it boosts Hong Kong's attractiveness to those seeking to leverage its economic strength and strategic Asian location. However, it's essential for investors to seek support from tax consultants and professionals. These experts can help with the application process and manage their financial affairs, especially regarding taxes, to prevent any issues and guarantee a smooth transition. This is particularly important as gaining residency in Hong Kong can affect an investor's tax status and obligations, especially if their economic center shifts to Hong Kong. Additionally, it's important to review the double tax agreement between Hong Kong and the investor's home country to understand any tax implications, highlighting the importance of professional guidance.

At PHC Advisory, we can offer you full support on matters regarding doing business in Asia, or any other issues your business may face. If you would like to know more about policies relevant to your business in Italy or Asia, please contact us at info@phcadvisory.com. 

PHC Advisory is a company of DP Group: an international professional services conglomerate of companies with approximately 100 experienced professionals worldwide. We offer comprehensive services in tax, accounting, and financial consulting, including financial supervision, financial audit, internal audit, internal control over financial reporting, and support for audited financial statements and annual audits, ensuring clients' financial transparency and compliance.

The content of this article is provided for informational purposes only, financial advice must be tailored to the specific circumstances on a case-by-case basis, and the contents of this article do not legally bind PHC Advisory with the reader in any way.

If you want to know more about doing business in China, please have a look at our previous articles: 

• China’s Outbound Payment Tax Filing

• Hong Kong’s 2024-2025 Budget: A Magnet for Europeans