Hong Kong residence comes at a price


An $833,333 downpayment would win an investor the right to stay in Hong Kong, under a government proposal

By Alex Frew McMillan

HONG KONG, China -- A proposal is in the works to grant Hong Kong residence to anyone who invests more than HK$6.5 million ($833,333) in the city.

Anyone who plugged that amount or more into Hong Kong -- in stocks, property and other similar investments -- would be allowed to make their home here.

The Hong Kong government is now mulling the fine print of the plan and hopes to fix the details by June.

"We're hoping to announce the details of the scheme by June this year," a spokeswoman with the Hong Kong security bureau told CNN by phone on Wednesday.

In many ways, Hong Kong was built on money. It is one of Asia's biggest banking centers and grew as a British colony and a trade and investment gateway into China.

Now the right amount of money will buy the right to live here. Overseas citizens would still have to live in Hong Kong for seven years before being eligible for permanent residence, however, the same system regular immigrants follow.

The investment offer will likely be off-limits to mainland Chinese citizens. Hong Kong and China, though technically one country, have different immigration policies, legal systems and currency-exchange restrictions.

Secretary for Security Regina Ip noted at an informal lunch with reporters on Tuesday that the exact base investment hasn't been settled.

But Ip agreed that HK$6.5 million was a reasonable working figure.

Residence by investment

Singapore recently unveiled its own "residence by investment" program. That requires a minimum "downpayment" of S$1.5 million ($817,260), which translates to HK$6.4 million.


In many ways Hong Kong, which shares a friendly rivalry with Singapore, was built on money

"I think Hong Kong should be more valuable than Singapore," she said, according to the South China Morning Post.

A government spokeswoman told CNN that she questioned that translation of Ip's quip, which was made in Cantonese. But Ip certainly had her eye on Singapore.

"Mrs. Ip said Hong Kong is looking at a similar scheme, and it would not be less than that," the spokeswoman explained.

"Hong Kong is still one of the safest cities in the world, and that makes it attractive. In other Southeast Asian countries, you've got some problems," the spokeswoman said.

Singapore burst into the headlines recently with the discovery of a terrorist plot to destroy American targets in the city-state.

Rivalry

Hong Kong and Singapore share a fierce rivalry for overseas investment dollars and for regional headquarters of multinationals.

The often tongue-in-cheek competition extends to almost every facet of life, including levels of English proficiency and which city has the best taxicabs.

Hong Kong also hopes to gain from China's entry into the World Trade Organization and its social and economic ties to China.

"You also have business opportunities," the spokeswoman said. "Overseas Chinese maybe want to settle down in a Chinese society."

Until the guidelines are set, it's unclear whether a mortgaged property or margined stock would count for its full value, or only the portion owned by the would-be resident and not creditors.

Many other countries have similar residence-by-investment programs. The United States sets the threshold at $500,000, though it and many other nations specify the money must go to restricted types of investment.

Hong Kong's property market and economy has suffered, as it loses some large operations to Singapore. But it faces a drastic drain on its resources and residents as China opens up, which is likely to attract many companies to cities such as Shanghai and Beijing.