Hong Kong’s 30 million investment immigration program is about to open. In the past, Hong Kong stocks have experienced two major rebounds, and licensed institutions are eager to try.
Financial Associated Press, November 4 (Reporter Cheng Mengqi)Hong Kong’s new “Policy Address” mentioned that details of the capital investor entry program commonly known as “investment immigration” will be announced within the year, revealing that the investment threshold has been significantly increased from 10 million Hong Kong dollars in 2015 to 30 million Hong Kong dollars, which can invest in stocks and funds. , bonds and other assets, but does not include real estate.
This news immediately ignited the Hong Kong capital market. You must know that this plan started on October 27, 2003, when Hong Kong’s industries were in recession after SARS. With the start of the plan, from 2003 to the end of 2007, the Hang Seng Index rose from 8,000 points to 31,958 points, a cumulative three-fold increase; in 2008 Financial The crisis brought about adjustments to the Hang Seng Index, and the capital investment entry program also raised the threshold to HK$10 million in 2010. The Hang Seng Index regained 75% of its blood from 2011 to 2015, returning to 28,000 points.
The Hang Seng Index experienced two major rebounds in 2003 and 2011. More importantly, under the huge imagination brought about by the Capital Investor Entry Scheme and the two major rebounds in the Hang Seng Index, Hong Kong institutions and practitioners have already been eager to give it a try.
What impact will the resumption of investment immigration have on the Hong Kong market?
On October 25, 2023, the Hong Kong government released the latest “Policy Address” and officially announced that it will restart the investment immigration program. The background of this plan is that Hong Kong’s economy is still in the midst of multiple “perfect storms”. The international situation, the mainland’s economic recovery, the Federal Reserve’s interest rate hikes, and global monetary tightening have caused extreme sluggishness in Hong Kong stocks, a shortage of liquidity, and Hong Kong real estate prices have almost fallen back. 7 years ago.
Industry insiders told reporters from the Financial Associated Press that Hong Kong’s restart of the investor entry program after eight years is one of the Hong Kong government’s many plans to attract global talents. This policy is also the policy provided by the Hong Kong government through excellent talents and high talents. Another way for global talents to enter Hong Kong. The significance of this move to Hong Kong is reflected in diversifying talent entry channels, attracting global ultra-high-net-worth individuals to invest in Hong Kong’s capital market, and enhancing Hong Kong’s wealth accumulation. This investment is limited to investments in non-real estate stocks, bonds, funds and other liquid financial assets, which will enhance the asset acquisition capabilities of local asset management institutions.
The degree of impact this plan will have on Hong Kong’s capital market is related to the number of people expected to participate in the plan and the amount of funds that actually enter the local capital market. Information disclosed so far shows that funds are limited to investments in funds, stocks, and bonds. For example, investment funds, it is not yet known whether the underlying assets of the fund are limited to the local market. If immigrants through this plan choose to invest in fund products outside the Hong Kong capital market, It will have little impact on the local capital market. However, if the bottom layer of the fund product is limited to the local capital market and the number of applicants is huge, it will bring incremental funds to the local capital market.
Many organizations in Hong Kong are eager to try
Due to Hong Kong’s financial industry license issuance rules, almost any securities firm can provide funds, stocks, and bond products required by the capital investor entry program, and employees of family offices, asset management companies, private banks and even insurance companies in the Hong Kong market can also provide Eager to try this.
An agent from Prudential Insurance Company told reporters that direct investment in specific funds through the investment linkage insurance provided by the insurance company also meets the requirements of the Capital Investor Entry Plan, which is commonly known as the Insurance No. 5 License.
Some practitioners in the family office industry also said that Hong Kong’s family office industry has been ready for a long time. In his opinion, this policy is almost prepared to support the family office industry. According to past statistics, Chinese nationals account for 91% of all applicants for the Capital Investment Entry Program. That’s because the Hong Kong Investment Immigration Program is not available to applicants who only hold a Chinese passport. Applicants who are Chinese nationals and have already obtained foreign permanent residence status can apply for the program. Global identity and tax planning are our strengths. The Hong Kong government hopes to restart the investment immigration program and become an important force in supporting Hong Kong’s financial market. It will enhance the advantages of financial assets and wealth management such as stock markets, bonds, funds, and insurance, thereby enhancing Hong Kong’s attractiveness as a family office hub and creating a global influence Powerful wealth management center.
Hong Kong Investment Immigration Application Data (as of 2015) In addition, regarding how to choose appropriate financial products for the Capital Investor Entry Program, most practitioners recommend that investors carefully select qualifications and compliance after carefully investigating the background of qualified service providers. , complete licenses, and experienced professional team carefully plan the implementation.
Immigration company staff told reporters that since the policy address, there have been many customers inquiring about the Hong Kong capital investor entry plan. He mentioned that in addition to low tax rates and a free business environment, the benefits of Hong Kong status are more in line with the needs of people who want to continue living and doing business in the mainland, because in areas such as the Yangtze River Delta and the Greater Bay Area, it is difficult to obtain a Hong Kong SAR passport and return home. Certificate, almost no different from mainland citizens. The 30 million threshold is not expensive. After all, Singapore’s investment immigration threshold is 10 million Singapore dollars (approximately 55 million yuan).
However, Mr. Chen, who came to Hong Kong through the Capital Investor Entry Program in 2012, chose bond investment and has obtained a permanent resident of Hong Kong, believes that the threshold of HK$30 million is too high and there should not be many people interested.
Investment immigration once triggered two major rebounds in Hong Kong stocks
Tracing the history of Hong Kong’s capital investor entry program, we have to start in 2003, when Hong Kong was deeply affected by SARS and suffered a severe economic recession with an unemployment rate as high as 8.5%. In October of the same year, the Hong Kong government launched an investment immigration policy called the Capital Investor Entry Program, which is mainly aimed at foreigners, Macau residents and Taiwan residents. The investment threshold is HKD 6.5 million. They can invest in financial securities or the real estate market. It is stipulated that cash cannot be cashed out within seven years. .
In 2010, the investment immigration threshold was raised and the investment categories were tightened. The entry threshold for new immigrants was raised from HKD 6.5 million to HKD 10 million, and they were not allowed to invest in real estate. This led to a surge in demand for financial products such as stocks, bonds, funds, and insurance.
With the steady recovery of Hong Kong’s economy and the changes in the internal and external situation at that time, the then Chief Executive of the SAR Government Leung Chun-ying announced that the investment immigration program would be suspended from January 15, 2015.
According to Hong Kong government data, during the 12 years since the Hong Kong Capital Investor Entry Program was implemented, the total investment attracted was HK$314.912 billion, of which the amount invested in real estate was approximately HK$42.588 billion, and the investment in designated financial assets was HK$272.324 billion. Investment immigrants brought an average of HK$314.912 billion to Hong Kong every year. Approximately HK$21 billion in funds have been received. In addition to the Hong Kong stock market, high-interest corporate bonds, fund sales and investment-linked insurance have all benefited.
Looking back, over the past 12 years, the Hong Kong Capital Investor Entry Scheme has achieved the results the government wanted. In terms of the stock market, Hong Kong stocks ushered in a bull market that can be recorded in history and consolidated its status as the financial center of Asia; in terms of the property market, a large amount of international funds poured in. In just 20 months after the capital investor entry program was launched, Hong Kong property prices rose by 55%. %, which is the biggest reason why the Hong Kong industry is eager to try after the investment immigration door reopens in 2023.