Tue, April 16, 2024

Hong Kong’s $27M Investment Scheme Targets Global Wealth

Hong Kong and tech companies

Quick Look

  • Hong Kong introduces a revised Capital Investment Entrant Scheme (CIES). It is targeting individuals, with a minimum investment threshold set at HK$27 million.
  • The scheme aims to reinforce Hong Kong’s status as Asia’s leading financial hub. Leveraging the fast-growing wealth in the Greater Bay Area (GBA).
  • Over 9,000 businesses with overseas/China parent companies employ 468,000 staff, highlighting the city’s global business appeal.
  • The new CIES Investment Portfolio requires an additional HK$3 million investment, focusing on innovation and technology.
  • Government initiatives support the booming family office ecosystem. A network launched to facilitate global family offices’ setup and expansion in Hong Kong.
  • Amid demographic shifts and talent pool concerns, Hong Kong eyes population growth and talent attraction through immigration schemes despite political unrest.

In a bold move to solidify its position as the financial nucleus of Asia, Hong Kong has revamped its Capital Investment Entrant Scheme (CIES). This strategic overhaul is designed to attract Ultra-High-Net-Worth (UHNW) individuals and High-Net-Worth (HNW) households, especially from the Greater Bay Area (GBA), where 20% of households fall into these affluent categories. The Commerce and Economic Development Bureau’s recent survey underscores this potential, revealing a robust ecosystem of over 9,000 businesses linked to overseas or China parent companies and employing 468,000 staff.

The revised scheme is set to kick off later this year and will set a high bar for applicants. It requires a minimum investment of HK$27 million in financial assets and non-residential real estate. Furthermore, it introduces a new CIES Investment Portfolio, mandating an additional investment of HK$3 million earmarked for innovation and technology ventures managed by the Hong Kong Investment Corporation.

Scheme Spurs Growth, Eyes Tech Investment

This initiative is not merely about capital infusion; it’s a strategic endeavour to attract global talent and HNW individuals to Hong Kong. This aims to inject fresh capital, enhance the asset and wealth management sectors, and catalyze new opportunities across various industries. The focus on the family office ecosystem demonstrates Hong Kong’s commitment. This is supported by government initiatives and infrastructure. Furthermore, the inclusion of the FamilyOfficeHK team and a dedicated network of service providers underscores this dedication. Hence, it is a testament to Hong Kong’s ambition to become the prime location for global family offices.

Addressing Hong Kong’s Talent Pool Amidst Shifts

Hong Kong’s demographic landscape is at a turning point. Following a population decline during 2020-2022, the city witnessed a modest rebound in 2023, with a 0.4% increase to 7,503,100 residents. This rebound is crucial in the context of the city’s efforts to attract talent and grow its population through immigration schemes like the CIES and the Top Talent Pass Scheme (TTPS), which has already benefited a significant number of mainland Chinese professionals.

However, challenges remain, notably the concern over a decreasing talent pool and a substantial portion of the population considering emigration due to political and freedom-related reasons. Addressing these concerns is vital for sustaining Hong Kong’s economic vitality and innovation capacity.

Hong Kong’s Bid to Remain Top Financial Hub

As Hong Kong embarks on this ambitious journey, it aims to attract global capital and talent. Consequently, the success of the revised CIES and related schemes will be instrumental. These efforts will reinforce its status as a global financial hub. Additionally, by leveraging the wealth growth in the GBA and beyond, Hong Kong focuses on innovation and technology investment. Therefore, it is positioning itself for a future marked by economic growth, diversity, and resilience amidst global uncertainties.

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