In September 2003, the Immigration Department of the Hong Kong Special Administrative Region (HKSAR) of the People’s Republic of China launched the Capital Investment Entrant Scheme. Before this scheme, individuals looking to gain residency through investment in Hong Kong had to apply under a specific category of the employment visa, called the Employment Visa Based on Investment in Hong Kong (also known as the business investment visa).

Key Advantages of the Hong Kong Residence by Investment Program

• Economic and political stability, along with its strategic location as a major financial and trading hub
• A well-established legal system based on English common law with clear and transparent regulations
• A premier gateway for trade and investment in and out of mainland China
• Recognized as the world’s freest economy
• No restrictions on capital movement in or out of Hong Kong
• A stable, convertible currency pegged to the US dollar
• A global communications centre with top-tier infrastructure
• A world-class international airport and the busiest container port globally
• A favourable taxation system for both individuals and businesses

Key Requirements of the Hong Kong Residence by Investment Program

Individuals seeking residence in Hong Kong have five main options:

1. Quality Migrant Admission Scheme (QMAS): Designed to attract highly skilled or talented individuals to settle in Hong Kong and contribute to its economic growth.
2. Top Talent Pass Scheme (TTPS): Aims to attract talented professionals with extensive work experience and strong academic qualifications from around the world to explore opportunities in Hong Kong.
3. General Employment Policy (GEP): Outlines the requirements for those wishing to enter or stay in Hong Kong for professional employment.
4. Investment as Entrepreneurs: For individuals looking to establish or join a business in Hong Kong as entrepreneurs under the General Employment Policy.
5. Capital Investment Entrant Scheme (CIES): For individuals who invest a minimum of HKD 30 million in Hong Kong.

Quality Migrant Admission Scheme (QMAS)

Applicants must meet certain prerequisites before they can earn points through one of two points-based tests:

1. General Points Test: Requires a passing score of 80 out of 225 points and evaluates applicants in five categories: age, academic or professional qualifications, work experience, language proficiency, and family background.
2. Achievement-Based Points Test: Geared towards individuals with exceptional achievements, such as Olympic medals, Nobel Prizes, or notable national/international awards. Applicants whose work is widely recognized or who have made significant contributions to their field (e.g., receiving a lifetime achievement award) will receive 225 points. If none of the criteria are met, no points are awarded and the application is rejected.

Qualified individuals from Hong Kong’s Talent List are also eligible for bonus points under the QMAS.

Top Talent Pass Scheme (TTPS)

Applicants who meet the following criteria are eligible to apply for residence under the TTPS:

• The applicant holds a bachelor’s degree from an eligible university.
• The applicant has earned at least HKD 2.5 million in the year immediately prior to the application

General Employment Policy (GEP)

Applicants with special skills, knowledge, or experience that are not readily available in Hong Kong may apply to work under the GEP if they meet the following criteria:

• The applicant has a solid educational background, typically a first degree in a relevant field.
• There is a genuine job vacancy available.
• The applicant has a confirmed job offer that aligns with their academic qualifications or work experience, which cannot be filled by the local workforce.
• The remuneration package, including salary, accommodation, medical benefits, and other fringe benefits, is generally in line with the prevailing market rates for professionals in Hong Kong.

Investment as Entrepreneurs

Applicants who meet the following criteria may apply to enter or stay in the Hong Kong Special Administrative Region (HKSAR) as entrepreneurs under the General Employment Policy (GEP):

• The applicant should possess a solid educational background, typically a first degree in a relevant field. They must establish or join a start-up business and be able to make a significant contribution to Hong Kong’s economy. Factors considered include, but are not limited to, the business plan, projected business turnover, financial resources, the number of jobs created locally, and the introduction of new technologies or skills.
• Overseas Chinese nationals holding passports from the People’s Republic of China who satisfy the criteria above, along with the usual immigration requirements, may apply for the HKSAR Investment as Entrepreneurs visa. To qualify, the applicant must have permanent residence overseas or must have lived outside the region for at least one year immediately prior to submitting the application. (“Overseas” refers to locations outside mainland China, the Hong Kong Special Administrative Region, and the Macao Special Administrative Region.)

Capital Investment Entrant Scheme (CIES)

Applicants who meet the following requirements may apply for residence in Hong Kong under the CIES:

• The applicant must invest a minimum of HKD 30 million in Hong Kong.
• The investment must be maintained for at least seven years.
• The applicant should have net assets of no less than HKD 30 million in the two years leading up to the application date.

Process for Applying to Hong Kong Residence by Investment

To obtain any of the visas mentioned above, applicants must submit all relevant application forms and supporting documents to the Immigration Department.

The approval of applications is entirely at the discretion of the authorities and may be influenced by changes in government policies. The Director of Immigration has the absolute authority to refuse any application, even if all eligibility criteria are met. Successful applicants are typically granted a limited initial stay of 24 months, without any other conditions upon entry. Applicants may request an extension of their stay in the Hong Kong Special Administrative Region (HKSAR) before their initial period expires. Such extension applications will only be considered if the applicants continue to meet the eligibility criteria for investment, the Quality Migrant Admission Scheme (QMAS), the Top Talent Pass Scheme (TTPS), the General Employment Policy (GEP), or the Capital Investment Entrant Scheme (CIES).

Taxation in Hong Kong

Taxation in Hong Kong follows a territorial source principle, meaning that Hong Kong companies are only taxed on profits generated within the region. The current tax rate as at October 2024 is 17.5% on assessable profits. There are no withholding taxes on dividends or interest, nor are there taxes on capital gains. However, a withholding tax of 5.25% applies to royalties paid to non-resident recipients that are unrelated to the payers. If the recipients are related parties, a tax rate of 16.5% is applied.

Hong Kong companies are excellent options for international trading or consulting activities that do not have ties to the region, allowing these businesses to operate tax-free. This also applies to companies that own real estate located outside Hong Kong. There is no capital gains tax, and dividends received or distributed by a Hong Kong company are tax-exempt. Additionally, the standard profits tax rate for Hong Kong-sourced income is highly competitive at 16.5%.