In order to qualify and remain qualified under the Scheme, an Applicant/Entrant will have to comply with the following requirements in respect of his Permissible investment assets AND provide all such material information in writing to the satisfaction of Director-General of Investment Promotion (DGIP) with regard to these assets as DGIP may request in order to assess the Applicant’s/Entrant’s eligibility and entitlement (if any) under the Scheme:

(a) Permissible financial assets

The Applicant/Entrant must deposit his Permissible financial assets into designated account(s) operated by eligible financial intermediary(ies), use the designated account exclusively for the transaction of Permissible financial assets and must not reduce the committed investment while permitted to stay in Hong Kong under the Scheme.

The designated account(s) must be:

1. in the own name of the Applicant/Entrant; or
2. in the name of a Holding Company¹.

The Applicant/Entrant must inform DGIP in writing of the name and relevant details of his/his Holding Company’s appointed financial intermediary(ies) (at most one financial intermediary for each of the following category for each Applicant/Entrant/Holding Company), which must be:

1. an authorised institution as defined in the Banking Ordinance (Cap. 155 of the Laws of Hong Kong);
2. a corporation licensed to perform Type 1 or 9 regulated activities under the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong); or
3. an insurer permitted to carry on Class C business as specified in Part 2 of Schedule 1 under the Insurance Ordinance (Cap. 41 of the Laws of Hong Kong).

The Permissible financial assets may be managed on a self-directed basis by the Applicant/Entrant and/or his Holding Company, or at the discretion of the financial intermediary(ies). For each Applicant/Entrant/Holding Company, at most three financial intermediaries can be engaged and these three intermediaries shall be of different categories referred to in (1) to (3) in this paragraph.

The Applicant/Entrant has to hold the investment in the Permissible financial assets in designated account(s) in his own name and/or in the name of his Holding Company to be operated by an eligible financial intermediary(ies) whose terms of appointment as financial intermediary are to include such technical, commercial and financial terms, as DGIP considers appropriate for the purposes of the Scheme. The financial intermediary(ies) and the Applicant/Entrant/Holding Company are required to enter into an agreement for the management and operation of the designated account(s), which includes the terms set out at Annex A to the Scheme Rules.

The appointed financial intermediary(ies) is required to carry out customer due diligence on the Applicant/Entrant/Holding Company and fulfill relevant anti-money laundering and counter-terrorist financing obligations under the Anti-Money Laundering and Counter Terrorist Financing Ordinance (Cap. 615 of the Laws of Hong Kong), and report to New CIES Office on the Applicant’s/Entrant’s continuous compliance with the Scheme Rules.

The Applicant/Entrant may at any time withdraw from the designated account(s) any cash dividend income or interest income arising directly from the Permissible financial assets. An Applicant/Entrant may at any time dispose of or realise the value of the Permissible financial assets which qualify under the Scheme but he will only continue to be eligible and to qualify under the Scheme if he reinvests NOT LESS THAN the entire Market value of those Permissible financial assets (as assessed on the date of disposal thereof) in Permissible investment assets.

(b) Real estate

Concerning acquisition of real estate, there is no restriction on the number of real estate bought for the purpose of gaining entry under the Scheme, but only investment in form of equity in real estate is counted towards the fulfillment of minimum investment threshold. An Applicant/Entrant/Holding Company may take out a mortgage loan with a bank or financial institution licensed in Hong Kong in respect of the real estate but only the amount of equity is counted for the purpose of the Scheme. Refinancing of the outstanding mortgage loan is allowed provided that the Applicant/Entrant/Holding Company does not increase the outstanding loan or in any way realise any capital gain on the value of the real estate. An Applicant/Entrant/Holding Company may sell the real estate and the Applicant/Entrant would continue to qualify under the Scheme if the Applicant/Entrant/Holding Company invests the entire proceeds from the sale in other Permissible investment assets after deducting the amount of the original mortgage loan, if any, secured by the real estate. Rental income from the real estate can be paid and retained by the Applicant/Entrant/Holding Company and need not be ring-fenced under the Scheme.

(c) Capital Investment Entrant Scheme Investment Portfolio (CIES IP)

Before placement into the CIES IP, the Applicant/Entrant shall ensure that the HK$3 million deposited cash in the designated account opened with one of his appointed financial intermediary(ies) remains and is not dissipated, and confirm that he is, and has remained the absolute beneficial owner of the deposited cash in the designated account.

The Applicant/Entrant will need to satisfy the customer due diligence and other eligibility requirements as required under applicable laws and regulations. The investment is subject to a lock-up period and other relevant terms and conditions of the CIES IP. In order to qualify and remain qualified under the Scheme, the Applicant/Entrant is required to remain invested in the CIES IP (during the lock-up period and until the expiry of the lock-up period and withdrawal as permitted under the relevant terms and conditions), and comply with the relevant terms and conditions.

Upon expiry of the lock-up period as applicable to the Applicant/Entrant and realisation of the CIES IP, and where an Applicant/Entrant still remains under the Scheme, the holdings and any reallocation or reinvestment of the proceeds from the realisation of the investment in the CIES IP (if any) will be subject to the requirements to be announced by the relevant authorities and as updated from time to time.

The Applicant/Entrant is required to engage a Certified Public Accountant (Practising) as defined in the Accounting and Financial Reporting Council Ordinance (Cap. 588 of the Laws of Hong Kong) at his own cost to assist in demonstrating his fulfillment of Portfolio Maintenance Requirements after the first anniversary of the grant of Formal Approval to the Applicant/Entrant to join the Scheme, and after each subsequent anniversary. The Applicant/Entrant is required to submit the Fulfillment document and all relevant supporting documents stated therein within one month after the first anniversary, and after each subsequent anniversary to New CIES Office.