Attachment A: Permissible Financial Assets

I. Permissible Financial Assets

a. Equities

shares of companies that are listed on the Stock Exchange of Hong Kong (“SEHK”) and traded in Hong Kong Dollars (“HKD”) or Renminbi (“RMB”);

b. Debt securities

i. debt securities listed on the SEHK and traded in HKD or RMB (including debt instruments issued in Hong Kong by the Ministry of Finance of the People’s Republic of China and local people’s governments at any level in the Mainland);

ii. debt securities denominated in HKD or RMB, including fixed or floating rate instruments and convertible bonds¹ issued or fully guaranteed by:

A. the Hong Kong Special Administrative Region Government (“the Government”), the Exchange Fund, the Hong Kong Mortgage Corporation, the MTR Corporation Limited, Hong Kong Airport Authority, and other corporations, agencies or bodies wholly or partly owned by the Government as may be specified from time to time by the Government; or

B. listed companies referred to under paragraph (a) above;

c. Certificates of deposits

certificates of deposits denominated in HKD or RMB issued by authorised institutions as defined in the Banking Ordinance (Cap. 155 of the Laws of Hong Kong) with a remaining term to maturity of not less than 12 months at the time of acquisition by the Applicant/Entrant, subject to a cap of 10% (i.e. HK$3 million) of the minimum investment threshold. This acquisition must take place after Approval-in-Principle has been granted by Director of Immigration and thereafter the Applicant be absolutely beneficially entitled to the invested certificates of deposits throughout its term. These certificates of deposits on reaching maturity must be replaced by certificates of deposits with a remaining term to maturity of not less than 12 months at the time of acquisition by the Applicant or by other Permissible investment assets;

d. Subordinated debt

subordinated debt denominated in HKD or RMB issued by authorised institutions in compliance with Schedules 4B and 4C of the Banking (Capital) Rules (Cap. 155L of the Laws of Hong Kong);

e. Eligible collective investment schemes

i. Securities and Futures Commission (“SFC”)-authorised funds² managed by corporations licensed by or institutions registered with the SFC for Type 9 regulated activity;

ii. SFC-authorised real estate investment trusts managed by corporations licensed by or institutions registered with the SFC for Type 9 regulated activity;

iii. SFC-authorised Investment-Linked Assurance Schemes³ issued by insurers permitted to carry on Class C business as specified in Part 2 of Schedule 1 to the Insurance Ordinance (Cap. 41 of the Laws of Hong Kong);

iv. open-ended fund companies (“OFCs”) registered under the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) and managed by corporations licensed by or institutions registered with the SFC for Type 9 regulated activity (see also paragraph (f) below); and

f. Ownership interest in limited partnership funds (“LPFs”) registered under the Limited Partnership Fund Ordinance (Cap. 637 of the Laws of Hong Kong)

The total investment amount of ownership interest in private LPFs in this paragraph and private OFCs in paragraph (e)(iv) above⁴ is subject to an aggregate cap of HK$10 million.

Notes:

1. If an Applicant exercises the option to convert the bonds to shares, the investment would be regarded as equities and treated as such afterwards.

2. Referring to unit trusts and mutual funds authorised by the SFC under the Code on Unit Trusts and Mutual Funds.

3. Referring to investment-linked assurance schemes authorised by the SFC under the Additional Guidance on Internal Product Approval Process.

4. Private OFCs and private LPFs refer to those OFCs and LPFs which are not authorised by the SFC for offering to the public and the offer of which falls within an exemption under Section 103 of the Securities and Futures Ordinance, e.g. offers made only to professional investors.

II. Please click here for the list of eligible collective investment schemes under paragraph (e) above as maintained by SFC on its website.

III. The Permissible financial assets may be managed on a self-directed basis by the Applicant or at the discretion of the financial intermediary(ies). The Applicant can only engage at most three financial intermediaries and these three intermediaries should be of different categories referred to in (1) to (3) below. The use of more than one financial intermediary from each of the below three categories at the same time is not permitted.

1. an authorised institution as defined in the Banking Ordinance (Cap. 155 of the Laws of Hong Kong); or

2. a corporation licensed to perform Type 1 or 9 regulated activities under the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong); or

3. an insurer permitted to carry on Class C business as specified in Part 2 of Schedule 1 under the Insurance Ordinance (Cap. 41 of the Laws of Hong Kong).

a. Non-residential real estate, whether commercial and/or industrial (including pre-completion properties covering offices, commercial premises, retail premises and factories and excluding land and multi-purpose real estate partly for residential purposes) in Hong Kong.

b. For residential real estate (including pre-completion property and multi purpose real estate partly for residential purposes) in Hong Kong, the investment must be made in one single property with transaction price of HK$50 million or above.

Notes:

5. The real estate should be held in the own name of the Applicant or through a sole proprietorship under his name, or through a company of which the Applicant being the sole shareholder. Non-residential real estate and residential real estate mean “non-residential property” and “residential property” defined in section 29A of the Stamp Duty Ordinance (Cap. 117 of the Laws of Hong Kong) respectively.

V. CIES Investment Portfolio (“CIES IP”)

Each Applicant under the Scheme is required to place HK$3 million into a new CIES IP, which will be set up and managed by the Hong Kong Investment Corporation Limited (“HKIC”). The CIES IP will make investment in companies/projects with a Hong Kong nexus, with a view to supporting the development of innovation and technology industries and other strategic industries that are beneficial to the long term development of Hong Kong’s economy. The HK$3 million placed into the CIES IP will be subject to lock-up. Capital preservation and dividends are not guaranteed, and distribution may be made on a discretionary basis at appropriate junctures subject to factors such as the pace and mix of the construction and realisation of the CIES IP, as well as the policy objectives and implementation arrangements. Detailed design for the CIES IP will be announced in due course.

Attachment B: Reference for Permissible Financial Assets

The Applicant must deposit his Permissible financial assets into a designated account operated by an eligible financial intermediary (only one account per financial intermediary is permitted), use the designated account exclusively for the transaction of Permissible financial assets and must not reduce the committed investment while permitted to stay in Hong Kong under the Scheme. In order to qualify and remain qualified under the Scheme, an Applicant will have to comply with the following requirements in respect of his Permissible investment assets and provide all such material information in writing to the satisfaction of Director-General of Investment Promotion with regard to these assets as Director-General of Investment Promotion may request in order to assess the Applicant’s/Entrant's eligibility and entitlement (if any) under the Scheme:

• The Applicant is required to transact only in the Permissible financial assets and held in the designated account(s) in his own name to be opened with the eligible financial intermediary(ies) for the purpose of the Scheme and to give written instructions to this effect in the contract with his financial intermediary(ies). The Applicant may switch between different types of Permissible financial assets at any time.

• The Applicant may at any time withdraw from the designated account any cash dividend income or interest income arising directly from the Permissible financial assets. An Applicant may at any time dispose of or realise the value of the Permissible financial assets which qualify under the Scheme but he will only continue to be eligible and to qualify under the Scheme if he reinvests not less than the entire Market value of those Permissible financial assets (as assessed on the date of disposal thereof) in Permissible investment assets.

• Concerning acquisition of non-residential real estate, there is no restriction on the number of real estate bought for the purpose of gaining entry under the Scheme, but only investment in form of equity in real estate is counted towards the minimum investment threshold. An Applicant may take out a mortgage loan with a bank or financial institution licensed in Hong Kong in respect of the real estate but only the amount of equity is counted for the purpose of the Scheme. Refinancing of the outstanding mortgage loan is allowed provided that the Applicant does not increase the outstanding loan or in any way realise any capital gain on the value of the real estate. An Applicant may sell the real estate and would continue to qualify under the Scheme if he invests the entire proceeds from the sale in other Permissible investment assets after deducting the amount of the original mortgage loan, if any, secured by the real estate. Rental income from the non-residential real estate can be paid and retained by the Applicant and need not be ring-fenced under the Scheme.

• The Applicant is required to engage a Certified Public Accountant (Practising) as defined in the Accounting and Financial Reporting Council Ordinance (Cap. 588 of the Laws of Hong Kong) at his own cost to assist in demonstrating his fulfillment of Portfolio Maintenance Requirements after the first anniversary of the grant of Formal Approval to the Applicant to join the Scheme, and after each subsequent anniversary. The Applicant is required to submit the Fulfillment document and all relevant supporting documents stated therein within one month after the first anniversary, and after each subsequent anniversary to New CIES Office.