Hong Kong eases capital entrant rules to win family offices

The Hong Kong government is introducing measures to make its capital investment entrant scheme more widely accessible as part of a move to attract family offices.

In a statement on 7 January the government said investments made through an eligible private company wholly owned by an applicant and assets of family members will be counted towards the new Capital Investment Entrant Scheme starting from  1 March 2025.

The already established scheme, which has seen 240 successful applications in its first 10 months from 1 March 2024, requires people to invest HK$30m to obtain residency.

The secretary for financial services and the treasury, Christopher Hui, said: "The New CIES has attracted high-net-worth individuals, business elites and innovative entrepreneurs. Since the launch of the scheme, we have been liaising closely with the industry and are continuously working on further enhancements.

"The enhancement measures announced today have not only relaxed the net asset assessment and calculation requirements but also allowed investments made through an eligible private company wholly owned by an applicant to be counted towards the eligible investment.

"We believe these measures will encourage more investors to join the scheme and can create synergy with the tax concession regime for family offices, thereby promoting the development of family office businesses in Hong Kong.

"We are committed to providing comprehensive support for family office decision-makers to establish themselves in Hong Kong, further attracting global asset owners and reinforcing Hong Kong's leading position as an international asset and wealth management hub."

The director-general of investment promotion, Alpha Lau, said: "The number of applications for the New CIES in the first 10 months has exceeded the number of applications received for the same period under the previous Capital Investment Entrant Scheme, which was launched in 2003.

"This reflects the strong confidence of investors in Hong Kong. I trust that these measures will enhance the attractiveness of the scheme. We will continue to work closely with professionals and service providers to further promote the scheme to high-net-worth families around the globe."

Details of the enhancement measures and the status of applications under the New CIES are set out below:

1. Enhancement measures with effect from March 1, 2025

(a) Fulfilment of net asset requirement (NAR)

(i) An applicant under the New CIES is only required to demonstrate that he/she has net assets or net equity to which he/she is absolutely beneficially entitled with a market value of not less than HK$30m net throughout six months (two years before the enhancement) preceding the application; and

(ii) Net assets or net equity jointly owned with the applicant's family member(s) can now be taken into consideration for the calculation of the NAR for the respective portion which is absolutely beneficially entitled to the applicant.

(b) Holding permissible investment assets through a Family-owned Investment Holding Vehicle (FIHV) or a Family-owned Special Purpose Entity (FSPE) under an FIHV

Investments made through an eligible private company wholly owned by an applicant will be counted towards the applicant's eligible investment in the New CIES.

An eligible private company refers to a holding company incorporated or registered in Hong Kong which is wholly owned by an applicant in the form of an FIHV or an FSPE under an FIHV managed by an eligible single family office as defined in Section 2 of Schedule 16E to the Inland Revenue Ordinance (Cap. 112).

"The enhancement will create synergy between the New CIES and establishment of family offices in Hong Kong", the statement said.