Grounded Ingenuity | Refined Results

February 7 2024
By Timothy Loh

Hong Kong’s New Capital Investment Entrant Scheme – A Boost for Family Offices, Open-Ended Fund Companies and Limited Partnership Funds

On December 19, 2023, the Hong Kong Government announced details of the new Capital Investment Entrant Scheme (“CIES”). Intended to promote the growth of family offices in Hong Kong, the scheme gives eligible investors and their dependents permission to stay in Hong Kong, and upon attaining a period of continuous ordinary residence in Hong Kong of not less than 7 years, they may apply for becoming Hong Kong permanent residents. In exchange, such investors must invest at least HK$30 million (approx. US$3.85mn) in permissible investment assets, including open-ended fund companies (“OFCs”) registered with the Securities and Futures Commission (“SFC”) and limited partnership funds (“LPFs”).

Control Over Investments

Information at this time suggests that applicants for the new Capital Investment Entrant Scheme will maintain a high degree of control over how their assets are invested. Though an applicant under the scheme must place HK$3 million (out of the minimum HK$30 million investment required to be made) into a new CIES Investment Portfolio which will be set up and managed by the Hong Kong Investment Corporation Limited (i.e. a company wholly owned by the Hong Kong Government) to support investments in industries considered to be strategically important to Hong Kong, the applicant can invest the balance into a range of permissible investment assets set out below.

Permissible Investment Assets


Shares of companies that are listed on the Stock Exchange of Hong Kong (“SEHK”) and traded in HKD or RMB


Debt securities listed on the SEHK and traded in HKD or RMB (including debt instruments issued in Hong Kong by the Ministry of Finance of the People’s Republic of China (“PRC”) and local people’s governments at any level in the Mainland);

Debt securities denominated in HKD or RMB, including fixed or floating rate instruments and convertible bonds issued or fully guaranteed by:

  • the Hong Kong Government, the Exchange Fund, the Hong Kong Mortgage Corporation, the MTR Corporation Limited, Hong Kong Airport Authority, and other corporations, agencies or bodies wholly or partly owned by the Government as may be specified from time to time by the Government; or

  • listed companies referred to in the above “Equities” category.

Certificates Deposits

Certificates of deposits denominated in HKD or RMB issued by authorised institutions under the Banking Ordinance (e.g. banks) with a remaining term to maturity of not less than 12 months at the time of purchase, subject to a cap of 10% of the minimum investment threshold (i.e. HK$30 million)

Subordinated Debt

Subordinated debt denominated in HKD or RMB issued by authorised institutions

Eligible Collective Investment Schemes

SFC-authorised funds managed by corporations licensed by or institutions registered with the SFC for Type 9 (asset management) regulated activity

SFC-authorised real estate investment trusts (“REITs”) managed by Type 9 licensed or registered entities

SFC-authorised Investment-Linked Assurance Schemes (“ILAS”) issued by permitted insurers

Registered OFCs managed by Type 9 licensed or registered entities


Ownership interest in LPFs registered under the Limited Partnership Fund Ordinance

Non-Residential Real Estate

Whether commercial or industrial (including pre-completion properties and excluding land) in Hong Kong, subject to a cap of HK$10 million

Though it is not yet clear, there is a possibility that applicants will be able to structure their investments either through family office holding vehicles to qualify for tax incentives or through OFCs or LPFs in which they have a degree of control. LPFs, in particular, provide potential latitude to indirectly extend the range of investments to include private equity and real estate investments which otherwise would not qualify under the scheme if investments were made directly in them.

Portfolio Maintenance Requirements

Similar to the previous Capital Investment Entrant Scheme which was terminated in 2015, portfolio maintenance requirements will be implemented under the new scheme to require an applicant to deposit his or her financial assets in a designated investment account with a single eligible financial intermediary so as to ensure compliance with scheme requirements. Such eligible financial intermediaries include authorized institutions under the Banking Ordinance (e.g. Hong Kong banks), corporations licensed for Type 1 (dealing in securities) or Type 9 (asset management) regulated activities under the Securities and Futures Ordinance (e.g. Hong Kong brokers and asset managers), and insurers permitted to carry on Class C (linked long term) business under the Insurance Ordinance.

An applicant must use the designated investment account exclusively for the transaction of permissible investment assets.

During an entrant’s stay in Hong Kong permitted under this scheme:

  • Investment Losses – Whilst an entrant must not reduce the committed investment of a minimum amount of HK$30 million while permitted to stay in Hong Kong, he or she will not be required to top up the value of investment if its market value falls below the HK$30 million minimum investment threshold.

  • Distribution – An entrant is allowed to withdraw cash dividends and interest income derived from permissible financial assets.

  • Investment Gains – An entrant is not allowed to withdraw any cash or investment from the designated account, or make any arrangements which would extract value or benefit from the designated account, or incur any debt using the investment portfolio as collateral for such indebtedness.

An entrant is free to switch investments from one permissible investment asset class to another, so long as applicable restrictions are satisfied.

Eligibility for the Scheme

Under the new scheme, an applicant must meet the following eligibility criteria:


Foreign nationals, Chinese nationals with permanent resident status in a foreign country, Macao residents and Chinese residents of Taiwan


18 years or above

Net Assets

must apply for a net asset assessment demonstrating that he or she has net assets of not less than HK$30 million (or equivalent in foreign currencies) to which he or she is absolutely beneficially entitled throughout the 2 years preceding the application

No Adverse Record

must demonstrate that he or she has no adverse immigration record and meets normal immigration and security requirements

Application Procedures

An applicant is first required to submit an application to Invest Hong Kong (“InvestHK”) for assessing compliance with the financial requirements. After InvestHK has verified that the applicant fulfils the net asset requirement, he or she may submit an entry application to the Immigration Department for a visa or entry permit to enter Hong Kong for residence.

Immigration Benefits

Successful applicants along with their dependents (including spouse and unmarried children under the age of 18 years) will be granted permission to stay in Hong Kong for an initial period of not more than 2 years. Upon the expiry of this 2-year period, the applicant and his or her dependants may apply for extension of stay in increments of up to 3 years each time, subject to continued compliance with requirements under the scheme.

Upon 7 years of continuous ordinary residence in Hong Kong, successful applicants and their dependents can apply for permanent residency or, if they are unable to fulfill the continuous ordinary residence requirement but have continuously satisfied the financial requirements under the scheme for not less than 7 years as verified by InvestHK, they may apply for unconditional stay in Hong Kong. Once the application is approved, the assets deployed in the scheme can be freely used or disposed of.

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