It happens all too often. The main foreign national breadwinner is to be transferred (again) out of Hong Kong with the family all settled here, with disruption to kids in school inevitable. This question look at the possibilities of using the Capital Investment Entrant Scheme to avoid this unsatisfactory state of affairs.
“Dear Mr Barnes,
I work for an international telecommunications group and have been based in Hong Kong with my wife and four children for the last three years. Recently my employer has relocated me to Singapore. This is my 3rd international assignment with my current employer in the last ten years (previously I was in the US and Dubai). Now, however, my children are fully settled in school here and we don’t want to have any further disruption to our lives and wish to remain in Hong Kong instead.
I have an employment visa and my children have dependant visas. All of our visas are due to expire in February 2013. My employer has already notified the Immigration Department and I have read on your website that my family can stay here until their current dependant visas expire at the same time my employment visa expires.
I am Canadian and my wife is from Mexico.
I have been researching your website closely and believe that we can apply for a Capital Investment Entrant Scheme for my wife. We have sufficient assets between the 2 of us, some in my wife’s name and most of them in our joint names.
How can we go about making the transition from our current immigration status in Hong Kong to having a Capital Investment Visa for my wife? I assume I can get a dependant visa under her sponsorship after my employment visa runs out? We want to pursue this possibility under her name for tax purposes as we wish to keep access to the tax benefits which Hong Kong offers.
Any advice you can offer will be really appreciated.”
Applying for a Capital Investment Entrant Scheme visa is a good option in your circumstances. You can find a summary of the program in our CIES Visa Information and the complete CIES programme rules here.
Pre-Condition – Beneficial Ownership
It must be shown that the applicant for a CIES visa has HKD10 million (market value) in net assets or net equity to which she is absolutely beneficially entitled for at least 2 years prior to making the application. Consequently, assuming all of your assets are in joint names at this time, this assumes you have a joint net worth of HKD20 million as reflected in your combined assets. On the other hand, to the extent that your wife has net assets or net equity standing in her own name for the last 2 years, this HKD10 million can be reduced by that net sum and the remaining balance can be in your joint names.
Your wife has a property in her own name in Mexico with a market value of HKD5 million. To the extent that she needs to show absolute beneficial entitlement to the balance HKD5 million in net assets or net equity, you would have to show that both of you have joint assets valued at HKD10 million in order for your wife to show absolute beneficial ownership of the sum of HKD10 million thereby satisfying the pre-condition for the CIES visa.
Your wife has a property in Mexico which she co-owns with a sibling with a market value of HKD5 million (meaning she has a HKD2.5 million interest in that property). To the extent that she needs to show absolute beneficial entitlement to the balance HKD7.5 million in net assets or net equity, you would have to show that both of you have joint assets valued at HKD15 million in order for your wife to demonstrate absolute beneficial ownership of the sum of HKD10 million thereby satisfying the pre-condition for the CIES visa.
This pre-condition serves 2 purposes:
(a) To delimit CIES programme eligibility to people who genuinely have a standalone net worth of HKD10 million.
(b) To preclude people from ‘asset shuffling’ in order to qualify for a CIES visa.
To definitively provide to the Hong Kong Immigration Department that you do indeed qualify under the HKD10 million absolute beneficial ownership condition you can engage a CPA to assess your assets and who will then issue a Report of Factual Findings to certify that this pre-condition has been satisfied. This serves to speed the application along.
This is the process which such a CPA will follow in producing this kind of Report.
On the other hand, if proving such beneficial ownership is manifestly obvious ‘on the facts’ (with supporting documentation included) your wife can simply make a declaration using this form as part of your application bundle without engaging a CPA to issue any such Report of Factual Findings:
The HKD 10 Million Investment Sum
The HKD 10 million investment must be made in permissable investment asset classes and placed into a specific account dedicated to the CIES programme and which must be ring fenced and managed by a single financial intermediary for the life your participation in the CIES scheme.
Consequently, you can appoint a major Hong Kong bank to serve as this financial intermediary as they typically have specific products and services to support both initial and ongoing qualification under the CIES programme. To this end, your bank will enter into a contract with you in respect of this dedicated account (see page 24 – the Annex to the Official Scheme Rules for how this contract is worded).
Preparing the Application
Once you’re in a position to demonstrate that you have completed the proof of beneficial ownership exercise and that that you have a dedicated account opened with your bank showing HKD10 million’s worth of investment in permissable asset classes, your wife can file an application to replace her dependant visa adjusting to her new immigration status under the CIES programme, applying to change your status from employment to dependant at the same time.
The children will maintain their current dependant visa status all throughout but you would change their sponsorship over from you to your wife at the point of CIES application approval.
You will each maintain your current visa status until the CIES application is approved.
Applying for a CIES visa can be effected in one of two ways – either by seeking Approval in Principal first or going directly for Formal Approval right from the outset. The advice offered above anticipates an application for Formal Approval directly.
The difference between the two approaches is that Approval in Principal is essentially designed for people who are not yet resident in Hong Kong and, after having proven their beneficially owned net worth of HKD10 million for the requisite two years, come to Hong Kong as Visitors first and given 6 months to finalise their investments leading to the grant of their CIES visa subsequently.
As you are existing residents with assets in Hong Kong presently, you would be making an application to adjust your status seeking Formal Approval directly.
Consequently, making an application for Approval in Principal would not be appropriate, not least as you would be seeking to finalise this project in good time to ensure a seamless transition to your alternate immigration permissions without disrupting your children’s education and present lives in the HKSAR.
More Information to Help You Along