Immigration Scheme may scrap foreign residency rule

Department will review requirement for mainlanders wanting to invest in HK under programme – and it could allow participants to buy property here again.

May 25, 2012

The Immigration Department will consider next year whether to seek removal of a requirement for mainlanders to have foreign residency before seeking abode in Hong Kong through an investment scheme.

In a review of the Capital Investment Entrant Scheme it may also consider allowing participants to buy real estate again, which the government stopped in 2010 to cool the property market.

Assistant principal immigration officer Benson Kwok Joon-fung said the mainland’s exchange and exit controls required its citizens to gain foreign residency before joining the scheme.

“We will have a review in 2013. We will see if there is any need to discuss this issue with the mainland [authorities],” he said.

The review would cover the type of investment allowed, including property, and the minimum amount, now HK$10 million.

“We want to enhance the competiveness of this scheme. As you know, many countries are thinking of ways to attract capital,” Kwok said.

Since the scheme started in October 2003, the department has allowed 14,512 applicants and 26,799 of their family members to move to Hong Kong.

Most of the applicants, some 12,297, were mainlanders with foreign residency.

Some 1,573 were foreigners, mainly from Canada, the United States, Australia, the Philippines and Indonesia.

They have invested HK$106.39 billion over the past nine years, with about HK$45.85 billion in shares and HK$40.78 billion in property.

In October 2010, investment in real estate was stopped and the threshold was raised from HK$6.5 million to HK$10 million, creating a surge of applications before the deadline. Some 4,187 applications were approved in 2011 – many of them lodged before the deadline – up from 2,971 in 2010.

Despite the restrictions, the scheme was still attractive as many applicants chose to invest in the stock market, Kwok said.

He said there were an average of 282 applications a month in 2011 – just one less than in 2009.

Only half of the 380 applicants who had stayed longer than seven years in Hong Kong applied for permanent residency or an unconditional stay.

Kwok said others were international investors who might not want to settle in the city.

Thomas Kut, chief executive of Midland Immigration Consultancy, said relaxing the application criteria could help boost the economy. He estimated that 30 to 50 per cent more applicants would come to Hong Kong if they were allowed to invest in real estate and without the need to gain foreign residency.

Kut said they would not affect the property market much as they accounted for only 1 to 2 per cent of property investors in Hong Kong.

“They feel safer investing in bricks rather than stock markets, as they do not know much about the local market,” he said.