9 January 2025

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Under CIES: The Path to Hong Kong Permanent Residency Just Became Easier

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On 7 January 2025, the Hong Kong government announced certain changes to the Capital Investment Entrant Scheme (CIES). The CIES, which was introduced in March 2024, provides a pathway to permanent residency here in Hong Kong for wealthy individuals, provided that the wealthy individual (i) can demonstrate that he or she had a net worth of at least HK$30 million (US$3.85 million) for the two years leading up to the time of application and (ii) deploys HK$30 million (US$3.85 million) in permissible investments, as defined under the CIES. If such assets are held in a compliant manner for seven years, and presuming all other criteria are met, permanent residence status is granted.

 

As a Hong Kong based law firm with family office, fund formation and immigration capabilities, David Cameron Law Office (DCLO) has fielded numerous inquiries regarding CIES since its launch.

 

The major change announced earlier this week is that an applicant only needs to prove net worth of HK$30 million (US$3.85 million) for the six months prior to application, instead of the previous requirement of a two-year period.

 

From DCLO’s perspective, what are the practical implications of this?

 

1. Applicants who have recently come into wealth may now apply. Presumably, however, those who have crossed the HK$30 million (US$3.85 million) mark in the past 6 to 24 months is not a significant population. Moreover, it would seem that HK$30 million (US$3.85 million) is a relatively low threshold, and not one that the high-net-worth individuals (HNWIs) Hong Kong is attempting to attract, would have necessarily crossed recently. Along those lines, the net worth threshold is the same as the amount of assets that would need to be deployed; in all probability, one who had just crossed that threshold would not want to deploy virtually all of his or her assets under CIES.

2. Applicants who have had to restructure their asset holding now do not need to wait as long to apply. It could be the case that an applicant has more than sufficient assets, but they are held in such a way that they do not technically qualify for CIES’s definition of net worth. As is often the case with HNWIs, they may not want direct ownership rights to assets, whether it be for tax or privacy reasons, and therefore may not qualify toward net worth, as far as CIES is concerned. Thus, if they needed to restructure at last some of their asset holdings to meet the CIES threshold of net worth, now they would only need to wait for six months after such restructuring, rather than two years.

3. If someone were planning ahead, he or she could gift or otherwise transfer HK$30 million (US$3.85 million) to someone who wanted to participate in CIES and the waiting time would only be six months. Planning for July 2025 is seemingly much more palatable than planning for January 2027. There is an “anti-avoidance” provision in CIES, meaning one cannot take steps to intentionally avoid the rules, but if the official period is six months, then CIES should not be concerned with anything that happened earlier e.g., a transfer six months and one day ago. CIES has always included an applicant’s “dependents” but that is limited to a spouse and dependent children under 18 years old, so perhaps this is an avenue by which to bring in an adult child, or a grandparent.

 

But let us cast this in a positive light. This is not a bad change, and it does add flexibility. Perhaps it is someone (1) not who has just obtained HK$30 million (US$3.85 million) but someone whose assets in the ‘eligible’ category for CIES has just crossed that threshold. Similarly, perhaps it is someone (2) who only needed to restructure a portion of assets to qualify. Finally, perhaps it is someone (3) who is overly qualified but would only be interested if a certain friend or family member could come along.

 

In any event, it is yet another step in the right direction by Hong Kong.

 

For prior updates on CIES by DCLO, please see:

 

1. Residential Property Added to CIES

2. Launch of CIES

3. Webinar on CIES

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For further information, please feel free to contact the author David Cameron david.cameron@dc-lo.com  ​