Hong Kong Urged To Re-implement Investment-based Migration Scheme To Compete With Singapore
HONG KONG – Victory Securities’ Chief Executive Katerine Kou called on the local authorities to revive the Capital Investment Entrant Scheme (CIES), a programme that grants permanent residency for people that forked out at least HK$10 million (US$1.3 million) in approved investment assets, reported the South China Morning Post (SCMP) on Wednesday morning (28 December, SGT).
This is due to the widening gap between Hong Kong and Singapore, with the latter outshining the former in attracting family offices, the investment vehicles for the super wealthy to invest and transfer their wealth through generations.
In fact, government statistics show that the number of single family offices surged from 400 in 2020 to 700 in 2021.
“For wealthy families who want to relocate, Singapore is currently the top choice (in Asia) as it wraps its investment migration programme by promoting family offices,” noted Kou, whose company operates in both cities. She added that “Hong Kong needs to catch up.”
Based on a report published by UK investment migration consultancy Henley & Partners, Singapore ranks among the top 5 countries seeing an influx of wealthy investors. On the other hand, Hong Kong and mainland China top the net outflows of high-net-worth individuals (HNWI).
Due to Singapore’s tax perks, political stability, and high standard of living, the city-state has attracted the likes of Haidilao’s co-founders, Tolaram Group from Indonesia, Google’s Co-founder Sergey Brin, and Bridgewater Associates’ Ray Dalio, in addition to property and healthcare moguls from mainland China.
“We have seen a high level of interest from high net worth families to set up their family offices in (Singapore),” commented Shantini Ramachandra, tax leader in Singapore at Deloitte Private.
“This interest goes beyond Asian families. It also comes from families across the world who are looking to gain a foothold in Asia to access Asian investments, with Singapore as a springboard to the ASEAN region,” she added.
Kou explained that re-implementing CIES would complement Chief Executive John Lee Ka-chiu’s goal to lure 200 large family offices to Hong Kong. Together with the plans announced during his Policy Address in October, these will help lure both talents and capital to the city.
Notably, Hong Kong implemented CIES in 2003. The scheme attracted HK$206 billion in capital, before it was suspended in 2015 due to complaints the “hot money” exacerbated speculation in the local real estate market.
In November 2022, Secretary for Financial Services and the Treasury Christopher Hui Ching-yu stated that the authorities are considering industry leaders’ calls to bring back CIES, with legislator Regina Ip suggesting that the scheme could be tweaked to help revive Hong Kong’s economy.