High-net-worth customers focus on HSBC, Manulife and Bank of China as interest in Hong Kong’s cash residency system grows

Alpha Lau, director-general of the Hong Kong Investment Authority, said the project had attracted considerable interest and authorities had received applications on the first day, although he did not give exact numbers.

“This shows that high-net-worth individuals are interested in the diverse investment channels that Hong Kong offers and want to settle in Hong Kong with their families.”

CIES, commonly known as the Investment Immigration Programme, provides preferential residence rights for wealthy individuals and their families to invest at least HK$30 million (US$3.8 million) in Hong Kong-listed stocks, bonds, deposits, funds and investment-related products. can be obtained. Insurance contracts or non-residential real estate.

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The city’s three note-issuing banks (HSBC, Standard Chartered and BOCHK) allow CIES applicants to purchase non-residential properties with eligible asset classes and mortgages.

The system requires applicants to contract with one or more financial companies to underwrite their investments. Once the investment requirements are met, companies will be supported in applying for verification with the authorities and being granted the right to stay in the city.

These investors are required to hold the assets for seven years before obtaining permanent residency.

Sami Abuzar, head of investment and wealth solutions at HSBC Hong Kong, said: “The new CIES will attract high-net-worth individuals to Hong Kong and strengthen Hong Kong’s position as a leading hub for international wealth management.” Stated.

“We have already received inquiries and look forward to supporting applicants with our fully integrated transaction banking and wealth management services.”

Hong Kong first introduced CIES after the SARS (Severe Acute Respiratory Syndrome) outbreak in 2003, but it ended in 2015 due to speculation in the real estate market. The revamped system excludes residential real estate.

The previous scheme had about 4,000 applicants a year, Financial Services and Finance Undersecretary Joseph Chan Holim said in January. The current scheme’s threshold amount is HK$30 million, which is three times that of the previous scheme.

If the new scheme attracts a similar number of applicants, the city could see an annual inflow of around HK$120 billion.

“The new CIES will attract more talent and capital to Hong Kong and strengthen Hong Kong’s position as a wealth management hub,” said Sally Liu, deputy director of BOCHK’s personal banking and wealth management department. .

Hong Kong’s group of 600 stockbrokers is also keen to get in on the action.

Catelyn Kou, president of the Hong Kong Securities Association, an industry group, said brokerage firms are doing everything they can to attract CIES customers and sell stocks, bonds and funds.

“With prevailing market uncertainty, high-net-worth clients may be more interested in investing in lower-risk instruments such as bonds, money market funds, and large-cap stocks,” Ko said. Ta.

A spokesperson said Everbright has more than 150 CIES-eligible funds and nearly 100 bonds that cash-oriented resident investors can choose from.

He said the company has received many inquiries from mainland China and Southeast Asia regarding products and procedures related to CIES.

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Another brokerage firm, KGI Asia, also said it has received a significant number of inquiries over the past few days.

“KGI Asia expects that high-net-worth Chinese nationals who have obtained permanent residence abroad will be interested in this scheme,” a spokesperson said.

“We expect a stronger response despite the increased investment eligibility compared to the previous scheme.”

The insurance industry also welcomed CIES. Investment-linked insurance products that combine an insurance contract with an investment fund are subject to CIES.

“The diversification of investment options provides investment opportunities that encourage potential applicants to settle in the city,” said Patrick Graham, CEO of Manulife Hong Kong and Macau.

The Canadian company was the largest seller of investment-related products in the first three quarters of last year, according to the Insurance Agency.