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Following is a question by the Hon Henry Wu and a written reply by the Secretary for Security, Mr Ambrose S K Lee, in the Legislative Council today (June 9):

Question:

Regarding the policy on investment immigration, will the Government inform this Council:

(a) of the total number of applications for investment immigration received since the implementation of this policy and among them, the details of applications approved and rejected, including the applicants' nationalities and places of origin, as well as the projects and amounts of investments;

(b) whether it has assessed if the policy has achieved the expected effects; if so, of the results; if not, the reasons for that;

(c) whether it has assessed the differences between the Hong Kong's eligibility criteria for investment immigration under the existing policy and those set by neighbouring countries or places; if so, of the assessment results; if not, the reasons for that; and

(d) whether it will review and relax the eligibility criteria for applications for investment immigration?

Reply:

Madam President,

(a) The Capital Investment Entrant Scheme was launched on October 27, 2003. As at May 29, 2004, the Immigration Department has received a total of 339 applications, among them 111 applicants have been granted formal approval to stay in Hong Kong. "Approval-in-principle" was granted to another 82 applications, allowing the applicants concerned to come to Hong Kong as visitors to make the necessary investment. Up to now, the Immigration Department has only rejected one application.

Of the 339 applicants, 137 are foreign nationals, 158 are Chinese nationals who have obtained permanent resident status in a foreign country, 33 are Taiwan residents, 10 are Macao Special Administrative Region (SAR) residents and one is a stateless person who has obtained permanent resident status in a foreign country. A breakdown of the nationalities of the 137 foreign nationals is at Annex A. Statistics relating to the 158 Chinese nationals who have obtained permanent resident status in a foreign country are at Annex B.

Regarding the nature of investment made, among the 111 capital investment entrants who have been granted formal approval to stay in Hong Kong, 73 of them invest only in specified financial assets, 24 invest only in real estate whilst 14 invest in both asset classes. Their investments amount to about HK$796 million in total, representing an average of HK$7.17 million per entrant. In terms of the investment amount, specified financial assets account for HK$509 million and real estate HK$287 million.

(b) The Scheme aims to attract the entry of those who are able to make substantial capital investment in Hong Kong but has no intention to operate any business in the context of the Scheme. In the seven months since its implementation, the 111 applicants granted formal approval have already invested about HK$800 million in real estate and specified financial assets. It is expected that the 82 applicants granted "approval-in-principle" will invest not less than HK$500 million in the next few months. In other words, the Scheme has so far been able to attract investments of over HK$1.3 billion to Hong Kong. The new capital brought in helps to enhance financial and economic activities and generate employment in Hong Kong. The residence of capital investment entrants and their dependants in Hong Kong also contributes to the growth in local consumption to the benefit of various sectors. We are satisfied with the results of the Scheme.

(c) The Scheme currently applies to foreign nationals, Chinese nationals who have obtained permanent resident status in a foreign country, stateless persons who have obtained permanent resident status in a foreign country, Macao SAR residents and Taiwan residents. In formulating its implementation details last year, we have made reference to similar policies of a number of advanced countries. Very often, the schemes elsewhere require investment to be made in specified government projects (real estate is normally excluded). Some schemes even stipulate that transfer or switch of investment is not allowed within a certain period of time. In comparison, our Scheme provides much greater flexibility regarding the choice of investment by an applicant. Applicants may choose to invest in either or a combination of the two permissible asset classes, namely, real estate and specified financial assets that include equities, debt securities, certificates of deposits, subordinated debt and eligible unit trusts or mutual funds. Applicants may also switch their investment amongst permissible assets at any time. As regards the amount of investment, investment thresholds elsewhere range from around HK$2 million to over HK$10 million. Taking Singapore, which also locates within East Asia, as an example, the investment threshold is not less than S$1.5 million, i.e. about HK$6.9 million, in specified business assets. We are of the view that the current investment threshold of HK$6.5 million under our Scheme is comparable to those of other advanced economies. In fact, the average amount of investment made by entrants who have been granted approval to stay in Hong Kong exceeds the minimum requirement of HK$6.5 million. Coupled with the flexibility in the choice of investment, we are confident that the Scheme will attract quality immigrants.

(d) A review of the Scheme covering eligibility criteria and other details will be conducted around the end of this year.

Ends/Wednesday, June 9, 2004

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