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Following is a written reply by the Secretary for Security, Mr Ambrose S K Lee, to a question by the Hon James To Kun-sun in the Legislative Council today (December 2):
Question:
Under the Capital Investment Entrant Scheme ("the CIE Scheme"), if investors invest not less than $6.5 million of capital in real estate or financial assets, they and their dependants will be allowed to stay and reside in Hong Kong. In this connection, will the Government inform this Council:
(a) whether it has assessed the impact of investors investing capital in real estate and financial assets under the CIE Scheme on the prices of real estate and the disparity between the rich and the poor in Hong Kong, as well as the number of jobs created in Hong Kong by the capital concerned to date; if so, whether it will release the assessment results; if such an assessment has not been made, what criteria the authorities adopt for assessing the impact of the CIE Scheme on Hong Kong;
(b) whether it knows if the governments of the United States, the United Kingdom, Canada, Australia and Singapore have implemented similar entrant schemes; if they have, of the differences between these schemes and the CIE Scheme of Hong Kong in terms of the investment amounts required, the permissible investment classes as well as other additional conditions; and
(c) whether it will, in response to factors such as development of the real estate and financial markets in Hong Kong, attractiveness of making the relevant investments in Hong Kong as well as inflation, regularly review the requirements and effectiveness of the CIE Scheme (including the minimum investment amounts and whether investors whose applications have been rejected will still choose to invest in Hong Kong, etc.); if it will, of the details?
Reply:
President,
(a) The Capital Investment Entrant Scheme (the CIES) has brought Hong Kong some HK$36.6 billion of investment since October 2003, within which HK$10.4 billion was investment in properties. This amount is less than 1% of the total trading volume in the property market in the same period (around HK$2.2 trillion [Note: 1]) and thus has no significant impact on the prices of real estates. In fact, prices of real estates depend primarily on factors such as demand and supply, interest rates and the investment environment.
As at November 22, 2009, a total of 5 604 principal applicants have been granted Formal Approval to come to Hong Kong under the CIES. Assuming that each approved applicant represents one household arriving in Hong Kong, this would amount to just 0.2% of Hong Kong households. Hence, the impact on the disparity between the rich and the poor is limited.
The CIES will directly or indirectly benefit various local sectors, especially the construction and decoration work industry, property agencies, financial and business services, etc. At the same time, investors and their dependants contribute to local consumption and related economic activities whilst in Hong Kong. We believe these activities create job opportunities. Owing to lack of statistics, the Government is not able to conduct any detailed quantitative assessment in this regard.
(b) The United Kingdom, Canada, Australia and Singapore have similar investment immigration schemes (i.e. an investor can apply for immigration through making investment, without having to start or participate in a business). The United States does not operate such schemes. When the CIES was introduced in 2003, the Government had made reference to similar schemes overseas.
The annex summarises the general requirements of such schemes in different places.
(c) The Government will review the CIES from time to time, with a view to improving its attractiveness to investors. We believe that Hong Kong's appeal to potential immigrants hinges on various factors including the business/employment opportunities, living standard, cost of living, tax system, etc.
The annual application figure jumped from 465 in 2004 to 2 997 this year (up to November 22), indicating the attractiveness of the CIES to investors. As at November 22, 2009, a total of 53 applications have been refused. The main reason was that the applicants did not satisfy the relevant asset requirements. We do not have information as to whether these unsuccessful applicants have invested in Hong Kong.
(Note 1: This figure is the total consideration for sales and purchase agreements of building units from 2004 to 1st half of 2009)
Ends/Wednesday, December 2, 2009
Issued at HKT 15:46
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