Hong Kong Immigration New Policy: Encryption assets can be used as proof of assets worth 30 million HKD.

Recently, there has been a new trend in Hong Kong's investment immigration policy, attracting market attention. A practicing accountant revealed that the Hong Kong Investment Promotion Agency has approved an investment immigration application using Ethereum as proof of assets worth 30 million HKD. This news undoubtedly lowers the threshold for overseas immigration for cryptocurrency holders, especially for large Chinese investors.

This policy stems from the new Capital Investment Entrant Scheme (CIES) launched by the Hong Kong government in 2023. The scheme aims to attract qualified investors by introducing external capital, further consolidating Hong Kong's position as an international asset and wealth management center. According to the scheme's regulations, qualified investors are allowed to obtain a stay visa after investing 30 million HKD in Hong Kong, with the opportunity to apply for permanent resident status in Hong Kong after residing for 7 years.

The application process includes the following key steps:

1. Applicants must hire a professional accountant in Hong Kong to provide a verification certificate for a net asset of 30 million HKD. The location and composition of the assets are not restricted, and it is only necessary to prove that the net assets have been continuously held at that amount for the 6 months prior to the application.

2. Applicants must invest at least 30 million Hong Kong dollars in designated permitted investment asset categories within 6 months prior to submitting the application or after approval. Among them, 27 million Hong Kong dollars can be invested in financial assets, including Hong Kong stocks, bonds, funds, etc.; up to 10 million Hong Kong dollars can be invested in non-residential commercial or industrial real estate.

3. The remaining 3 million HKD needs to be invested in the "Capital Investors Immigration Scheme Investment Portfolio" to support the development of innovation and technology and key industries in Hong Kong.

4. After completing the investment, applicants can obtain a 2-year residence visa, which must be renewed thereafter. An annual capital verification report must be provided to prove that the total investment amount is maintained at over 30 million HKD.

It is worth noting that the participation in this cryptocurrency primarily manifests during the initial verification phase. Mainstream cryptocurrencies such as Bitcoin and Ethereum are recognized as valid for asset identification and can be proven to be held through cold wallets or major trading platforms. However, whether other cryptocurrencies are applicable still needs to be specifically assessed, mainly considering their stability, circulation, and legality in Hong Kong.

For cryptocurrency holders, the biggest challenge is proving the source of funds. Relevant institutions and accountants will require the original source of funds used to purchase cryptocurrency and transaction records, which may pose difficulties for many long-term holders.

Nevertheless, this move by Hong Kong undoubtedly demonstrates its open attitude towards encryption, further enhancing Hong Kong's position in the encryption field. In the long run, this may attract more talent and capital, promoting the development of Hong Kong's Web3 industry.

In recent years, Hong Kong has introduced a series of measures to attract foreign talent, including optimizing existing immigration programs and launching new high-skilled talent schemes. These initiatives aim to address the issue of population loss in Hong Kong. Data shows that in recent years, the net outflow of people from Hong Kong has reached 530,000, accounting for about 7% of the resident population.

Currently, the effects of the new policy are beginning to show. As of early January 2024, the "New Capital Investor Immigration Scheme" has received over 750 applications, with a total expected investment of over HKD 22 billion. However, only 2 applicants are currently involved in the use of encryption assets.

Hong Kong's attention to the Web3 sector continues to increase. Over the past year, Hong Kong has made significant progress in virtual asset regulation and ecological support:

1. Product Innovation: Approved 6 virtual asset spot ETFs, greatly enhancing investment convenience.

2. Trading platforms: Nine virtual asset trading platforms have been approved, and several brokerages and asset management institutions have obtained relevant license upgrades.

3. Payment Innovation: Launch the Ensemble project to explore RWA and CBDC, and continuously improve related regulatory provisions.

4. Regulatory Improvement: The draft of the "Stablecoin Regulations" is under review, and there are plans to introduce a licensing system for virtual asset custodial service providers.

Although Hong Kong has limited influence in the global encryption market, its unique positioning lies in combining the advantages of traditional finance to build a new decentralized financial system. Hong Kong's strategy is to regulate virtual asset trading while focusing on the development of stablecoins and the RWA sector to fill the regulatory gap for virtual assets.

Overall, Hong Kong's "small government, large market" policy provides a relatively safe and stable environment for the development of virtual assets, which has a unique appeal to traditional capital. Although Hong Kong may not be the most active market for cryptocurrencies, its balanced strategy in regulation and innovation is gradually shaping it into an important bridge connecting traditional finance and the era of digital assets.