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Document Title Arial Regular 28 - Hong Kong Institute of

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Document Title Arial Regular 28 - Hong Kong Institute of Powered By Docstoc
					Presented by : Mr Andy Y. M. CHAN,
Immigration Officer of Hong Kong Immigration Department
Venue: Hong Kong Institute of CPAs Training Centre,
27/F of Wu Chung House
Date: Friday, 8 May 2009




Capital Investment Entrant Scheme
Disclaimer

 The materials of this seminar / workshop / conference are intended
  to provide general information and guidance on the subject
  concerned. Examples and other materials in this seminar / workshop
  / conference are only for illustrative purposes and should not be
  relied upon for technical answers. The Hong Kong Institute of
  Certified Public Accountants (The Institute), the speaker(s) and the
  firm(s) that the speaker(s) is representing take no responsibility for
  any errors or omissions in, or for the loss incurred by individuals or
  companies due to the use of, the materials of this seminar /
  workshop / conference.


 No claims, action or legal proceedings in connection with this
  seminar/workshop/conference brought by any individuals or
  companies having reference to the materials on this seminar /
  workshop / conference will be entertained by the Institute, the
  speaker(s) and the firm(s) that the speaker(s) is representing.



                                                                           2
Outline

   The Policy and Benefits of the Scheme;
   Eligibility Criteria;
   Permissible Investment Asset Classes;
   Monitoring Mechanism;
   Ring-fencing;
   New Arrangement of Engaging a CPA (Practising) under CIES;
   Common Types of Assets or Equity
   Statistics




                                                                 3
Adjustment of Policy


 To facilitate the entry for residence by capital investment entrants who need
  not be engaged in the business operation here.

 Before the introduction of the Scheme in 2003, the entry of overseas investors
  on employment visas requires personal involvement in business operation.




                                                                              4
Benefits to Participant

 Can reside in HK;
 Can bring in dependants;
 May apply for permanent residence after 7 years of continuous ordinary
  residence; OR
 May apply for unconditional stay in HK after meeting obligations under
  the Scheme for 7 years.




                                                                           5
Eligibility Criteria

Two Routes to Approval:

 via Approval-in-Principle (AIP) first and then Formal
  Approval


 direct Formal Approval (FA)




                                                          6
 Eligibility Criteria

Paragraph 2.1 of the Scheme Rules:-


 (a)   ≧ 18 years on date of application (DOA);


 (b) ≧ HK$6.5M Net assets throughout 2 years preceding DOA
  (absolute beneficial entitlement to assets is a must);




                                                              7
Eligibility Criteria

 (c) to have invested within the specified “investment
  time frame” not less than HK$6.5 million Net in
  Permissible Investment Assets (PIAs) to which he is
  absolutely beneficially entitled;



         6M                         6M

                DOA         AIP
            investment time frame



                                                          8
Eligibility Criteria


 (d) be capable of supporting and accommodating himself (and his
  dependants) without relying on any return on PIAs, employment or
  public assistance in HK;


 (e) have no adverse immigration record and meeting normal
  immigration and security requirements.




                                                                     9
Scope of the Scheme

 Foreign nationals (except nationals of Afghanistan, Albania,
  Cuba and Democratic People’s Republic of Korea);
 Macao Special Administrative Region residents;
 Chinese nationals who have obtained permanent resident
  status in a foreign country;
 Stateless persons who have obtained permanent resident
  status in a foreign country with proven re-entry facilities; and
 Taiwan residents




                                                                     10
Permissible Investment Assets

 Real Estate

   Commercial, industrial or residential properties;

   Pre-completion properties;

   Land.




                                                        11
Permissible Investment Assets

Specified Financial Assets


 Equities listed on Hong Kong Stock Exchange and traded in HK dollars;
 HK dollar denominated        debt   securities   issued   by   specified
  organisations;
 HK dollar denominated certificates of deposits of not less than 12
  month maturity after AIP is granted;
 HK dollar denominated subordinated debt;
 Eligible Collective Investment Schemes (ECIS) – as published and
  updated in ImmD’s website: http://www.immd.gov.hk/




                                                                             12
Monitoring Mechanism

 Switching of investments amongst PIAs is allowed;

 Observe relevant switching conditions.




                                                      13
Principle of Ring-fencing
 Purpose : to avoid abuse of scheme;

 Scope : capital gains but not recurrent income
  (like rents and cash dividends);

 Length of application : 7 years




                                                   14
Change in Value of Investment

During the period of ring-fencing:

 no need to top up investment if it falls below HK$ 6.5 million;

 prohibits withdrawal of any capital gain from investment if market
  value rises above the requisite level.




                                                                       15
New Arrangement of engaging a CPA
(Practising) under CIES



 As set out in paragraph 2.1(b) of the Rules for the Capital
  Investment Entrant Scheme ["the Scheme Rules"], an
  Applicant has to meet the eligibility criteria, among others,
  that he has Net assets or Net equity to which he is absolutely
  beneficially entitled with a Market value of not less than
  HK$6.5 million Net throughout the two years preceding the
  date he lodged his application for Approval-in-Principle or
  Formal Approval.




                                                                   16
New Arrangement of engaging a CPA
(Practising) under CIES

 To streamline the procedure and to shorten the processing
  time, with effect from 16 March 2009, applicants under the
  Capital Investment Entrant Scheme [CIES] may at their own
  cost engage a Certified Public Accountant (Practising) [CPA
  (Practising)] who is a member of the Hong Kong Institute of
  Certified Public Accountants to issue a report to demonstrate
  that they meet the requirement of paragraph 2.1(b) of the
  Scheme Rules.

 The report may be submitted to the Immigration Department
  together with the CIES application form. This is an optional
  arrangement and whether or not a CPA (Practising) is
  engaged will not affect the outcome of the application. The
  new arrangement is also applicable to applications submitted
  before the implementation date.



                                                                  17
Common types of Assets or Equity

 (a)     Bank Assets

  (i)     ascertain the ownership;
  (ii)    convert the foreign currency to HKD;
  (iii)   check the bank statements falling within the specified 2
          years;
  (iv)    ensure the specification for bank reference
          letter.




                                                                     18
Common types of Assets or Equity

 (b) Real Estates

  (i)    review land title document to ensure the ownership;
  (ii)  ascertain the market values of the real estate from the
        property appraisal report;
  (iii) take note of the net value consideration on any and
        every charge, lien and encumbrance secured on that
        property throughout the concerned 2 years;
  (iv) Applicant is required to report any liability be attached
        to that property in the form of a declaration which
        should be submitted together with the Report of
        Factual Findings.



                                                                   19
Common types of Assets or Equity

 (c)     Unlisted Equity Investment

  (i)     obtain the legal document to ascertain the existence of
          the investment;
  (ii)    review the Memorandum or Articles of Association to
          ensure the establishment of ownership and
          shareholding of the Applicant and to obtain the recent
          company search to check the latest ownership status;
  (iii)   acquire any necessary document to verify the change
          of ownership during the specified 2 years;
  (iv)    obtain the audited financial statements which cover
          the 2 years concerned;
  (v)     any personal loan made by the Applicant to a company
          or an individual is not considered.


                                                                    20
Statistics



             21
Statistics
     Up to 30 April 2009, we have received a total of 7,267
            applications from investment entrants.



    3000
    2500
    2000
    1500                                          2,798
    1000                                  1,795
     500                           800                        764
                     465    495
       0     150
            2003     2004   2005   2006   2007    2008    2009
           (10-12)                                         (1-4)
Questions and
   Answers




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