Hong Kong CIES: 50 Applications in First Month, Application No. 1 Approved in Just 23 Days

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Since December 19, 2023, when the Financial Secretary Hong Kong, Christopher Hui, officially announced the details of the Hong Kong Capital Investment Entrant Scheme (HK-CIES), global investors’ interest in the Hong Kong investment market has risen steadily. On March 1st, after a nine-year hiatus, the renewed CIES finally opened for applications.

The program’s detailed requirements emerged already several months before the program’s opening. Since then, many prospective applicants who were initially hesitant have started seeking investment details from consulting agencies, and nearly 50 distinct groups of applicants have opted for representation.

By the time the program opened for applications on March 1st, therefore, several investment migration consulting agencies were already fully prepared to seize the opportunity and secure the first batch of application slots for their clients.

Earlier this week, InvestHK revealed that in the first month since the launch of the new CIES, it has received more than 50 applications and more than 1,600 inquiries, “reflecting high-net-worth individuals’ confidence in Hong Kong.”

InvestHK noted that HNWIs from many world regions were among the initial 50 applicants and that about 70% of the 1,600 inquiries had come from professional service providers.

“It shows strong confidence among high-net-worth individuals in [a] stable business environment, and the diverse investment opportunities Hong Kong has to offer,” Alpha Lau Hai-suen, the director general of investment promotion, told the South China Morning Post this week.

Hong Kong authorities have previously indicated they expect about 4,000 people a year to participate in the new CIES, which would raise investments of around HKD 120 billion annually.

Professor Terence Chong Tai-leung, executive director of the Lau Chor Tak Institute of Global Economics and Finance at the Chinese University of Hong Kong, told the SCMP that while 50 applications in the first month was a good start considering that demand for such programs tends to start slowly, but also indicated the government’s aim of 4,000 applicants a year was overly ambitious.

A senior economist of an investment bank pointed out that investors might balk at the seven-year path to permanent residency, which is relatively long compared to many similar residence by investment programs globally. He also commented that the “challenging economic climate and geopolitical sentiment may also deter some applicants.”

Hong Kong legislator Doreen Kong Yuk-foon applauded the good start to the program but also encouraged continuous monitoring of the program’s performance and the gathering of feedback from applicants to enable fine-tuning over time. She said the government should review the scheme after six months and compare it to competing programs – especially the very similar Global Investor Program in Singapore – to see how the program could become even more attractive.

The most salient change in the new CIES’s requirements is the tripling of the investment threshold to HKD 30 million, HKD 3 million of which applicants must invest in government-designated innovative technology enterprises. This stipulation implies that applicants need to make more considerations and preparations in terms of asset size and investment than under the original CIES scheme.

Application number one approved in just 23 days

The first applicant, according to InvestHK staff, submitted his application on March 4th, underwent several stages of review, and finally received approval for their net asset evaluation on March 27th, just 23 days later.

The speed of processing for this initial case is attributable to several factors:

First, the applicant promptly chose a professional consulting firm, prepared sufficient application materials, and demonstrated the legitimacy of his source of funds.

Second, the applicant collaborated closely with his agency, adjusting strategies in a timely manner based on policy changes and application procedures to ensure a smooth process.

Third, the applicant demonstrated profound market insights and professional knowledge in selecting investment projects and devising plans, thus enhancing his chances of success in the application.

Investment migration applications in turbulent times like this are no walk in the park. They require applicants to be well-prepared in terms of assets, investments, and the application process and collaboration with professional consulting firms. Through case analysis, we can better understand the key factors for success and provide reference and guidance for investors intending to apply.