The Chief Executive-in-Council today (March 11) endorsed the implementation details of the "Capital Investment Entrant Scheme" and the "Admission Scheme for Mainland Talents and Professionals".

Announcing details of the two schemes at a press conference today, the Secretary for Security, Mrs Regina Ip, said, "A major facet of our population policy recently announced by the Chief Secretary for Administration is to attract quality immigrants, including Mainland talents and professionals and to relax immigration rules to attract more overseas investors.

"The two schemes are aimed at attracting the inflow of capital and facilitating local firms to tap on the expertise of Mainland professionals to develop their businesses."

Under existing policy, entrepreneurs may enter Hong Kong to set up or join in a business. But this does not cover persons who have the financial means to make substantial investment in Hong Kong but do not wish to run the business themselves.

"This places Hong Kong at a disadvantage in the global competition for capital investment.

"We will therefore introduce the Capital Investment Entrant Scheme to attract capital investment entrants to come to Hong Kong, i.e. people who have the financial means to make substantial investment in Hong Kong but would not, in the context of the Scheme, run the business themselves. We will ring-fence the new investment they bring so as to ensure that they bring benefits to local financial and economic activities. Capital investment entrants will also contribute to local consumption," she said.

"The investment threshold under the Scheme will be set at $6.5 million, and investment will have to be made in a specified list of permissible investment assets.

"We believe the threshold of $6.5 million provides a proper balance between making Hong Kong attractive in the global competition for capital investors and ensuring that these investors are of an appropriate quality. When compared to admission schemes elsewhere, the arrangements under our Scheme would allow capital investment entrants greater flexibility in their choice of investment assets to suit their individual needs," Mrs Ip said.

The new policy will be applied to all foreign nationals, 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 residents of Taiwan.

"As foreign exchange control is implemented in the Mainland, the new policy will not apply to Mainland residents at this stage, " Mrs Ip said.

Under the Scheme, entrants may invest in the following two permissible investment asset classes:-

(i) Real estate - whether commercial, industrial or residential, including land and pre-completion properties in Hong Kong; and

(ii) Financial assets

Under this class, the entrant can invest in one or a combination of the following types of financial assets:-

(a) Equities - shares of companies that are listed on the Hong Kong Stock Exchange and traded in Hong Kong dollars;

(b) Debt securities denominated in Hong Kong dollars including fixed or floating rate instruments and convertible bonds which are issued or fully guaranteed by the HKSAR Government , the Exchange Fund, the Hong Kong Mortgage Corporation, MTR Corporation Limited, Kowloon-Canton Railway Corporation, Hong Kong Airport Authority, and other corporations, agencies or bodies wholly or partly owned by the HKSAR Government as may be specified from time to time and companies referred to under (a) above;

(c) Certificates of Deposits denominated in Hong Kong dollars with a remaining term to maturity of not less than 12 months at the time of purchase (such purchase should take place after approval in principle has been given by the Director of Immigration for the entrant to join the Capital Investment Entrant Scheme);

(d) Subordinated debt denominated in Hong Kong dollars issued by authorised institutions under the Banking Ordinance; and

(e) Approved unit trusts or mutual funds.

Portfolio maintenance and 'ring-fencing' requirements will be imposed to ensure that an entrant does not reduce his investment commitment to Hong Kong during the time when he is permitted to stay in Hong Kong under the Scheme.

"In a nutshell, entrants are not allowed to realize or cash in any capital appreciation of the qualifying portfolio.

"On the other hand, if the value of the portfolio falls below the original level of $6.5 million, no topping up is required," Mrs Ip said.

An entrant is allowed to switch his investments from one permissible asset class to another provided that the ring-fencing principle is adhered to, she said.

Successful applicants will be allowed to bring in their dependants. After seven years' of continuous ordinary residence in Hong Kong, capital investment entrants and their dependants may apply for the right of abode in Hong Kong.

On the Admission Scheme for Mainland Talents and Professionals, Mrs Ip said the conditions for admitting Mainland residents for employment and those applicable to foreign nationals would be aligned as far as possible.

Mrs Ip said, "No sectoral restriction or quota will be imposed under the new Scheme."

Mainland residents who satisfy the following eligibility criteria may apply for entry under the Scheme:-

(a) the applicant should have a good education background, normally a first degree in the relevant field. But in special circumstances, good technical qualifications, proven professional abilities and/or relevant experience and achievements supported by documentary evidence may also be accepted;

(b) the applicant's admission is contingent on a confirmed offer of employment. The applicant should be employed in a job relevant to his academic qualifications or working experience which cannot be readily taken up by the local work force; and

(c) the remuneration package should be broadly commensurate with the prevailing market level.

"Apart from professionals in the commercial and financial fields, the Scheme would also cater for the entry of talents and professionals in the arts, culture and sports sectors as well as those in the culinary profession. The admission of these persons will enhance Hong Kong's status as an Asian world city," said Mrs Ip.

With the launching of the new scheme, the existing Admission of Talents Scheme and the Admission of Mainland Professionals Scheme would be abolished.

A non-statutory advisory committee, to be appointed by the Chief Executive, would be set up to advise on applications submitted under the Scheme.

Mrs Ip added, "Successful applicants will be allowed to bring their spouses and unmarried dependent children under the age of 21 to Hong Kong."

The Admission Scheme for Mainland Talents and Professionals is expected to commence from July while the Capital Investment Entrant Scheme would be launched in the third quarter of this year.

End/Tuesday, March 11, 2003

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