Investors Can Now â€˜Buyâ€™ Residency in Hong Kong!
October 22, 2003.
The HKID introduced a brand new visa category late last month; one which allows foreign nationals to invest a fixed sum of money into the economy of Hong Kong in return for which residency rights in the HKSAR will be granted.
The Capital Investment Entrant Scheme applies to foreign nationals, residents of Macau and Taiwan. Chinese nationals who have obtained permanent residence status overseas and stateless people who have obtained permanent residence in a foreign country with proven re-entry facilities. Mainland residents have been excluded due to foreign currency controls.
Applicants must invest HK$6.5 million into property or financial assets, or a combination of both. Real estate can be comprised of commercial, industrial or residential properties. Financial investments will comprise equities, debt, unit trusts and mutual funds. The money can only be invested in government-approved funds, 11 of which have presently been listed. These are:
Â· Dao Heng Hong Kong Fund
Â· Dao Heng Premium Choice: Hong Kong Fund
Â· Dao Heng Premium Choice: Money Market Fund
Â· Hang Seng Index Fund
Â· Hang Seng HK MidCap Index Fund
Â· Hang Seng China Index Fund
Â· Hang Seng China H-Share Index Fund
Â· Hang Seng Index Leveraged 150 Fund
Â· Hang Seng Hong Kong Bond Fund
Â· Mansion House Hong Kong Trust
Â· Tracker Fund of Hong Kong
The money must remain invested for seven years before the applicants and their families can apply for the Right of Abode.
Participants in the Capital Investment Entrant Scheme will not be allowed to cash in any capital appreciation of their qualifying portfolio. If the value of the portfolio falls below the original HK$6.5 million, no topping up is required. Regular reporting of present portfolio value will be necessary.
Applicants will be subject to security vetting. Those who have committed serious criminal offences will not be accepted. Time line to approval appears to be 4-6 weeks.
Successful applicants will be allowed to bring in their spouses and unmarried dependant children under 18 years.
The initial period of stay granted will be two years, renewable subject to continuing portfolio eligibility.
There will be liberal landing requirements â€“ possibly availing successful applicants up to 24 months to activate their Hong Kong residence after approval (compared to 90 days for most other visa categories).
Renewals have to be effected in Hong Kong.
The Government plans to review the Scheme after 12 months.
Â· It remains unclear if there is a â€˜new moneyâ€™ requirement â€“ i.e. that the investments have to be acquired after the commencement date of October 27, 2003 from funding sources presently outside of the HKSAR.
Â· There is uncertainty as to the mechanism for acquiring a Capital Investment Visa: e.g. will existing Hong Kong residents be able to apply for this type of residence permission on a change of status basis?
Â· The exact extent of the due diligence requirements remain unclear: will the applicant have responsibility for arranging the requisite supporting security clearances or will the Department itself undertake the majority of the work in respect of these prerequisites to approval? What is a â€œseriousâ€ criminal offence?
Â· Whilst it appears that permanent residence is available to successful applicants after 7 years of maintaining the qualifying investment portfolio, the information released to date intimates that there will be no landing requirement for the first 24 months. Will the first 24 months prior to landing represent â€˜ordinary residenceâ€™ irrespective of when the applicant actually first arrives in Hong Kong? Moreover, will the â€˜ordinary residenceâ€™ criteria be liberalized in view of the stated policy of attracting new investment to Hong Kong (as opposed to contributing to Hong Kong society in the â€œnormalâ€ way â€“ starting a business, accompanying as family, taking up employment etc).
Permitted activity under the Capital Investment Visa program has yet to be disclosed. Will Capital Investment Visa holders be able to join the local workforce without any further express permissions? Join in a business?