Hong Kong cash-for-residency scheme now expected to bring in HK$15 billion in investments

Forty-seven applicants have each invested HK$30 million (US$3.8 million) through Hong Kong’s cash-for-residency scheme within the required six-month time frame, while HK$15 billion is now expected to enter the city through the programme, authorities have revealed. But economists said it was too early to tell whether the scheme would have a significant impact on the city’s economy and that more government coordination would be required to ensure the programme provided long-term benefits. InvestHK, the government agency in charge of attracting foreign investment, said on Monday that the New Capital Investment Entrant Scheme (New CIES) had received more than 500 applications, up from 339 at the end of June. “The increasing New CIES application figures reflect the strong confidence from high-net-worth individuals in Hong Kong,” InvestHK director general Alpha Lau Hai-suen said. The latest figures were released around two months after the government announced that three people had invested the required HK$30 million and received two-year visas. Lau said at the time that the scheme was expected to draw investments of HK$10 billion based on the 339 applications received. Authorities said they expected the 500 applications to bring in as much as HK$15 billion in investments to the city. For the 47 applicants, at least HK$1.4 billion has been brought in. Hong Kong launched the New CIES – commonly known as the investment migration scheme – on March 1. The scheme is designed to provide a fast track to residency for the wealthy and their families when they make investments of at least HK$30 million. The funds must remain in the city’s financial markets for at least seven years. Most of the amount, HK$27 million or 90 per cent, must be invested in financial assets such as equities on the Hong Kong stock exchange, debt securities, cash deposits, subordinated debts, eligible collective investment schemes and limited partnership funds. The remaining HK$3 million must be invested in areas related to the development of the innovation and technology sector, and strategic industries, which will go into a New CIES investment portfolio managed by the Hong Kong Investment Corporation and used to support the city’s start-ups and IT industry. Investing in residential properties does not count towards the amount. Dr Lee Shu-kam, head of Shue Yan University’s department of economics and finance, described the estimated HK$1.4 billion brought in by the 47 applicants as a “substantial amount” and would help drive investment, consumption and employment. He said investors who obtained the two-year visas would not only bring capital, but were also likely to stimulate the development of related industries, such as property, financial services and the high-end consumer market. “However, the long-term success of this scheme still requires broader support measures and policy coordination,” Lee said. In addition to capital inflows, the government needed to continue its efforts in innovation, technology, and talent acquisition to ensure Hong Kong remained attractive to global investors, he said. “Hence, how to convert it into sustained economic growth remains to be seen,” Lee said. Gary Ng, senior economist at Natixis Corporate and Investment Bank, said the government would need more than just this scheme to have a “meaningful impact” on the financial sector and wider economy. He said every 100 applicants would contribute just 0.01 per cent to the estimated HK$30 trillion under management in Hong Kong’s asset and wealth management sector. “Whether such investment creates more jobs and improves market liquidity is important to assess the progress [of the scheme],” he said. Economist Simon Lee Siu-po said the HK$1.4 billion brought in was “not a big sum” and it was too early to tell whether the scheme was attractive to the upper-income individuals the government was seeking to court. Last year, Singapore raised the investment threshold in its own global investor programme in an attempt to create more jobs and benefit locals due to an influx of wealth. To qualify, investors are now required to put at least S$10 million (US$7.43 million) into a new or existing business, or at least S$25 million through a fund that invests in local companies, up from the previous requirement of S$2.5 million (US$1.85 million). According to the country’s Ministry of Trade and Industry, the programme created more than 24,000 jobs between 2011 and 2022 and generated over S$5.46 billion in business expenditure. In Hong Kong, the threshold for the new scheme is three times higher than an earlier version that ended in 2015 because of speculation in the property market. Under the previous scheme, which was introduced in 2003 after the city was hit badly by a deadly outbreak of severe acute respiratory syndrome, more than 25,000 applications were approved, bringing in investments of about HK$216 billion. Under the new scheme, successful applicants and their dependents may apply to become permanent residents after a period of continuous ordinary residence in Hong Kong of not less than seven years, subject to any other relevant requirements under the Immigration Ordinance.

Hong Kong cash-for-residency scheme now expected to bring in HK$15 billion in investments

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Agency reveals 47 applicants have already invested HK$30 million each through scheme

Agency reveals 47 applicants have already invested HK$30 million each through scheme