Investment Portfolio to Drive Innovation: Hong Kong's US$38 Million Push

Investment Portfolio Allocation from New Scheme

The Hong Kong government’s investment arm will use the more than HK$300 million (US$38.46 million) collected from the investment migration scheme to promote innovation and technology in the city. The government-owned Hong Kong Investment Corporation (HKIC) announced that it would begin this investment in the first quarter of 2025, establishing a new investment portfolio for this purpose. The HKIC manages HK$62 billion in funds.

Overview of the New Capital Investment Entrant Scheme

Initiated on March 1, the New Capital Investment Entrant Scheme (CIES) obligates applicants to invest at least HK$30 million in financial vehicles, in exchange for residency. The government mandates that 10% of each investment gets pooled in a fund managed by the HKIC, focusing on innovation and long-term development.

• As of September, the scheme has attracted 550 applications, generating HK$16.5 billion in investments.
• Clara Chan Ka-chai, CEO of HKIC, emphasized Hong Kong's importance for international startups.

Plans for Local Startups

The HKIC will partner with two to four Hong Kong-based fund firms with a minimum of HK$200 million in assets under management. Key firm managers must reside locally, with at least half of the staff being local residents. Proposed investment themes should aim to enhance technological applications across jurisdictions.

Potential Impacts on Startups

Tom Chan Pak-lam of the Institute of Securities Dealers views the CIES investment portfolio as a positive step, though cautions that the initial HK$300 million might be insufficient for substantial impact initially. The CIES portfolio represents the fifth fund operated by the HKIC, which also has initiatives aimed at larger capital influxes.

Cliff Ip Wang-hoi from CPA Australia remarks that this new fund could endorse Hong Kong fund houses while benefiting target companies. The overall perspective indicates a promising influx of capital aimed at fostering innovation within the region.