HKSAR Cheif Executive CY Leung announce that the “Capital Investment Entrant Scheme” (a scheme for those super rich who can sit $10M Hong Kong dollor of capital in Hong Kong for a residence) is suspended on January 15th, 2015 until furture notice in his policy address 2015.
As a Hong Kong entrepreneur relocation service provider, we welcome this arrangement and hope that Hong Kong government should focus on attracting new business to Hong Kong instead of capital. In fact, nature of capital is mobile and it flows to the place with business opportunities.
Therefore, the government will raise their focus on attracting entrepreneur of innovation and technology, we expect the application of Business Investment VISA and Employment VISA will be more favorably considered for persons who connect to economic growth of Hong Kong.
Cash for residence in HK
Business Investment VISA
Investment VISA is classified as part of Employment VISA, and this is rolled out to facilitate application of entry to Hong Kong Special Administrative Region (HKSAR) by the persons who wish to invest, establish businesses or join in businesses in Hong Kong.
The application of VISA by the reason of investment is not popular since the applicants’ background requirement is tighter as well as its preparation work are more complex comparing to Employment VISA (which is relatively straight-forward in application). This is the most challenging application.
Hong Kong is a world-class city of doing business and there are full of business possibilities. It’s believed that the difficulties in application means a fruitful outcome in the future.
Employment VISA = Business Investment VISA?
Although both of the VISAs aim at attractive working persons who can bring “value” to Hong Kong, approval of Business Investment VISA are justified whether the nature of businesses are realistic and whether the composition and structure of the businesses are significantly controlled the applicant.
The general understanding for successful Business Investment VISA should show that the applicant is able to offer considerable and solid monetary contribution to Hong Kong continuously, while the holder of Employment VISA may lose his job or resign from job and thus has no income.
Who can apply for?
An oversea application for a Business Investment VISA to enter the HKSAR for investment are positively considered if:
- the applicant has no record of security objection serious crime;
- the applicant has background of tertiary education and/or qualification, proven professional abilities, relevant experience and/or achievements with supporting document and evidence; and
- the applicant is in a position to make substantial contribution to the economy of the HKSAR.
Remark: This scheme do not apply to Chinese residents of the Mainland; and nationals of Afghanistan, Cambodia, Cuba, Laos, Korea (Democratic People’s Republic of), Nepal and Vietnam.
Hong Kong sponsorship
The applicant MUST nominate a Hong Kong sponsor who can either be a company or an individual. For individual sponsor, the person must be of the age of 18 or above with a bona fide Hong Kong resident and well-known by and familiar with the applicant.
The right business vehicle
The Private Limited Company incorporated in Hong Kong is the best business vehicle. Since the incorporation process is fast and simple: the owner need not be present in Hong Kong and be a Hong Kong residence. All applicants are advised that they should incorporate a company of that type before the submission of application, and full utilize the status of this company on the business plan.
Long processing time
Official processing lead time of a Business Investment VISA application usually take between 4 to 6 months comparing to 4 to 6 weeks of Employment VISA.
For the entrepreneur who is going to establish a fresh start-up in Hong Kong, he will be asked by the officers to provide a well-constructed and thoughtfully considered business plan for their consideration.
The business plan play a mission-critical role in the VISA approval, do not look down on it and highly recommended to seek professional help from known specialists in the similar industries and also business-startup service firm throughout the plan creation.
If applicant’s business plan is directly related to the well-established business model and well-known sponsorship in Hong Kong, the VISA may be granted purely on the paper business plan. Generally, most of the applicant lacks the resource and background to settle all of the questions by the officer.
Business Plan for joining an existing business are also required, the objective of this plan is focusing on the supporting from sponsorship.
The officers would favorably consider the VISA approval if they see solid evidence that the applicant is already preparing his new business and see the ground to operate in a year after entry.
Make the plan real
Most of failed Business Investment VISA applicants of startup were trapped by providing solid proof of making substantial contribution to the society of Hong Kong in the aspect of financial and economic growth for the officer.
Those applicants always questions if they are not allowed to establish or join in any businesses without Business Investment VISA in Hong Kong, they have no method to do anything to show contribution to Hong Kong.
The workaround is that the applicants enter Hong Kong via Visit VISA / Employment VISA which gives rights to them to stay in Hong Kong and take part in business-related activities for their startup business. At the same time, the applicants should write down those activities into the business plan for their Business Investment VISA, and notice the assessment officer about those activities.
A favorable business plan should show possible contribution to Hong Kong in the aspects as follows:
- to proof the source of capital is sustainable to run the business for at least 2 years
- to create quality local employment opportunities
- to establish a reasonable business premises
- to engage actively in various business activities with local suppliers
- to obtain adequate administrative power.
- to grow your business model in the long run.
There is no formula to tell which part of the above criterion is dominant to the other since no two case are ever identical. However, the first aspect is the must, cash is king. The fifth aspect plays almost the same importance, the applicant’s Hong Kong sponsorship play a role here.
Bold your argument
Three rules to obey:
- Do not lie to the officer
- Be confident in your business plan
- Make educated estimation on the future operation
The fact is the future is full of potential, neither the officers and the applicants can tell the full potential of a new business investment in Hong Kong.
With all the effort being put into the new business, the applicants can still apply for their Business Investment VISA extension regardless of the outcome.