A pedestrian passes by the Hong Kong Stock Exchange electronic screen in Hong Kong on June 29, 2023. (PHOTO / AP)

Hong Kong’s new Capital Investment Entrant Scheme is more attractive than similar programs in Singapore and the special administrative region can also lure capital inflows to support its innovation and technology industries, and other strategic sectors, according to the city’s secretary for financial services and the treasury.

“The investment threshold of this plan is higher than that of a similar plan more than 10 years ago. Compared with similar plans in Singapore, the investment threshold is about HK$58 million ($7.43 million) to HK$60 million, reflecting the attractiveness of Hong Kong’s plan,” Christopher Hui Ching-yu said in a local radio program on Wednesday.

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He revealed that InvestHK – the agency tasked with promoting foreign direct investment in the SAR – had talked to potential investors, including those from Southeast Asia and other countries, while investment intermediaries will make their next move after studying the plan’s requirements. “I hope the approval process can start, the sooner the better.”

The purpose is to support the development of innovation and technology industries and other strategic industries that will help the long-term development of Hong Kong’s economy.

Christopher Hui, Secretary for Financial Services and the Treasury, HKSAR

Under the new investment program, applicants are required to place HK$3 million into a new CIES investment portfolio to be set up and managed by Hong Kong Investment Corporation to invest in companies or projects.

“The purpose is to support the development of innovation and technology industries and other strategic industries that will help the long-term development of Hong Kong’s economy,” said the secretary.

As for the maximum amount of HK$10 million that can be invested in non-residential real estate, he explained this is to facilitate different investors who want to start businesses or operations in Hong Kong. Since residential property involves people’s livelihood, the SAR government has decided that only non-residential real estate will be included for investment.

The Hong Kong General Chamber of Commerce – the oldest chamber representing multinational companies operating in the city – hailed the new program, saying it will further enrich the local talent pool and attract more capital to the SAR.

“Besides bringing new impetus to the economy, the plan will make Hong Kong more attractive to international talent and companies. It will also strengthen the development of our asset and wealth management business, financial services, and other related professional services, and bring more business and job opportunities to all segments of industries and service chains,” the chamber said.  

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The HKGCC also supports the establishment of the new CIES investment portfolio, which will promote the development of innovation and technology industries, as well as other strategic sectors.

Under the program, eligible investors can invest HK$30 million or more in permissible investment assets, such as stocks, funds, bonds, and may also purchase non-residential properties in Hong Kong, whether commercial or industrial, capped at HK$10 million. Within the HK$30 million, eligible investors are required to inject HK$3 million into a new CIES investment portfolio to support companies or projects with a Hong Kong nexus.

The government also said it will introduce legislative amendments for the suspension mechanism (suspending payment of buyer’s stamp duty and new residential stamp duty for incoming talents’ acquisition of residential property in Hong Kong) to cover the successful applicants under the new CIES.

Under the new CIES, InvestHK will decide whether the applications fulfill the net asset and investment requirements, and the Immigration Department will assess the applications for visa/entry permits and extensions of stay.

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The administration aims to officially launch the new CIES and invite applications in mid-2024.