July 21, 2024

Opinion | Immigration scheme will attract the well-off

The city has taken a step to becoming a haven for high-net-worth individuals. A new immigration scheme aims to attract capital and talent by reeling in HK$120 billion worth of investment to Hong Kong per year.

At HK$30 million per applicant, the New Capital Investment Entrant Scheme hopes to bring in investors who will benefit the city’s professional services, especially wealth management.

It is a promising start, though the headline HK$120 billion a year may be a tad too optimistic. The scheme may take some time to establish itself.

The required investment can be in local stocks or other assets for investors and their families to qualify for Hong Kong residency.

Family offices may be set up under the scheme. To be sure, HK$30m is not for the super-rich; and it’s lower than that in Singapore.

How does Hong Kong’s bid to attract super-rich family offices compare to others?

But there is no denying that the appeal is there for well-off people with high mobility and investment incentives outside the city.

The scheme does not include those who reside only in mainland China, but mainlanders with permanent residence status in a foreign country, Taiwanese and residents of Macau are eligible.

It is to be coupled with a tax break introduced in May and other incentives such as the building of art-storage facilities at Hong Kong airport. They are a key part of the government’s strategic plan to attract another 200 family offices in addition to the more than 400 already set up here.

There are some concerns whether Hong Kong is still perceived as attractive and liveable as it used to be because of the recent political turmoil. But as the city has stabilised and returned to normal, outsiders will learn that it is back in business.

Meanwhile, some of the scheme’s restrictions are seen as stringent. For example, the investments must remain in the city’s financial markets for at least seven years. Such rules are necessary if the city does not want immigrants who just park their money here temporarily and then skip town.

Newcomers under the scheme should be able to help drive the economy and create jobs. It is not just a tax haven scheme, but one for economic growth.

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