Hong Kong's Financial Services and the Treasury Bureau: New Capital Investment Entrant Scheme expected to attract over HK$150 billion in investment; plans to broaden fund definition and tax incentives.

The Financial Services and the Treasury Bureau (FSTB) of Hong Kong said that the New Capital Investment Entrant Scheme (CIES) has been in implementation for over two and a half years. As of the end of October this year, more than 5,000 applications had been received, and the scheme is expected to bring over HK$150 billion in investment to Hong Kong. More than 3,000 applications have completed investment verification and been formally approved. In a post on its social media page, the FSTB said that since the scheme was implemented in March 2024, it has continued to attract high-net-worth individuals and capital from around the world to settle in Hong Kong, with strong growth recorded in recent years in both capital investors and family offices establishing a presence in Hong Kong. Under the CIES rules, eligible applicants must invest a minimum of HK$30 million in permissible investment assets, of which at least HK$27 million must be allocated to permissible financial assets or real estate (with residential properties counted up to a cap of HK$10 million and non-residential properties counted up to a cap of HK$15 million), while another HK$3 million must be invested in the "CIES Investment Portfolio" established and managed by Hong Kong Investment Corporation Limited. The Hong Kong SAR Government has implemented a series of enhancement measures. To create a more competitive tax environment, it earlier submitted legislative proposals to the Legislative Council on optimizing the preferential tax regimes for funds, family-owned investment holding vehicles, and carried interest. The FSTB noted that, taking into account views received during the scrutiny of the bill, the SAR Government will propose amendments, including relaxing the investment cap for "precious metals" as an eligible investment qualifying for tax exemption to 20%, and broadening the definition of "fund" to include "perpetual funds" without fundraising deadlines. The authorities expect these measures to respond to industry demands and provide greater flexibility and convenience for funds and family offices, with the target of passing the relevant bill within this year.