Can encrypted assets become a new option for immigration to Hong Kong?

Recently, the Hong Kong Investment Promotion Agency approved an investment immigration application using Ethereum as a proof of assets worth 30 million HKD. This news has attracted the attention of cryptocurrency holders, especially for large Chinese investors, as it seems to lower the threshold for overseas immigration. However, the actual operation of investment immigration is not that simple. Is Hong Kong really becoming an ideal place for cryptocurrency holders? The answer to this question varies from person to person.

In fact, this policy originates from the new Capital Investment Entrant Scheme (CIES) launched by the Hong Kong government in 2023. The scheme aims to further consolidate Hong Kong's position as an international asset and wealth management center by attracting external investors and capital. According to the scheme's provisions, qualified investors who invest 30 million HKD in Hong Kong are allowed to obtain a stay visa, and after residing for 7 years, they have the opportunity to apply for permanent resident status in Hong Kong.

During the application process, investors need to bear the cost of hiring a professional accountant in Hong Kong to provide a net asset verification certificate. It is worth noting that the location and composition of the assets are not restricted; it is only required to prove that the applicant has continuously held no less than 30 million HKD in net assets or net capital for the 6 months prior to the date of submitting the net asset review application.

After approval, applicants must invest no less than 30 million Hong Kong dollars in designated permitted investment asset classes within 6 months. These assets include stocks of companies listed on the Hong Kong Stock Exchange, debt securities, qualifying collective investment schemes, and other financial assets, as well as non-residential real estate for commercial or industrial use. In addition, 3 million Hong Kong dollars must be invested in the "Capital Investment Entrant Scheme Investment Portfolio" established by Hong Kong Investment Management Company to support innovation technology and other key industries that contribute to Hong Kong's long-term development.

After completing the investment, the applicant will receive a two-year residence visa, which needs to be renewed afterward. Every year, a verification report from a professional accountant must be provided to prove that the total investment amount remains no less than 30 million HKD. It is worth noting that even if there is a loss in the investment, as long as it is proven that the investment scale at the time of application reached 30 million HKD, no additional investment is required. After residing for 7 years, the applicant can apply to become a permanent resident of Hong Kong, at which point the investment amount will no longer be restricted.

The participation in this cryptocurrency is primarily concentrated in the initial verification stage, where encryption assets such as Bitcoin and Ethereum can be used for asset recognition. However, whether other cryptocurrencies are applicable still requires specific analysis. Currently, only cryptocurrencies that are relatively stable in value, have a large circulation, and are legal in Hong Kong are likely to be accepted.

Although there are precedents for cryptocurrencies as proof of assets in places like the United States and Singapore, the biggest challenge for cryptocurrency holders is proving the source of funds. Relevant institutions and accountants typically require clients to provide information about the original source of funds used to purchase cryptocurrencies and the places of purchase. Given the volatility and anonymity of the cryptocurrency market, these requirements can pose significant difficulties for applicants.

Hong Kong has accepted cryptocurrency for the first time as proof of investment immigration assets, which not only reflects its open attitude but also reaffirms the Hong Kong government's inclusiveness towards cryptocurrency. This move may attract more Chinese cryptocurrency holders and help enhance Hong Kong's status in the crypto space. In the long run, this could drive the development of Hong Kong's Web3 industry from both talent and capital perspectives.

In recent years, Hong Kong has introduced a series of measures to attract foreign talent, including optimizing the existing talent admission scheme and launching a new high-skilled talent program. These initiatives aim to address the trend of a continuous decline in Hong Kong's population. According to statistics, from July 2020 to June 2023, the net number of people leaving Hong Kong reached 530,000, accounting for 7% of the resident population.

Currently, these introduction plans have shown positive results. In 2024, Hong Kong approved nearly 140,000 various talent entry plan visas, an increase of 4,000 from the previous year. Since the launch of the new capital investor entry plan, Hong Kong has received over 750 applications, with a total expected investment of over 22 billion Hong Kong dollars. However, currently only 2 applicants are involved in using encryption assets.

In the current economic context, Hong Kong's focus on the Web3 sector has not diminished but rather increased. Last year, Hong Kong made significant progress in virtual assets, including the approval of multiple virtual asset spot ETFs, an increase in the number of approved virtual asset trading platforms, and the advancement of regulations related to stablecoins. These measures aim to build a new decentralized financial system while consolidating Hong Kong's position as a traditional financial center.

Although Hong Kong has limited influence in the global encryption market, its characteristic of "small government and large market" provides investors with a safe and stable environment. For traditional capital, this safety may be more important than other factors. With the continuous improvement and implementation of relevant policies, Hong Kong is expected to find a balance between traditional finance and emerging digital assets, offering investors more diversified choices.