Allowing Cryptocurrency Investment Immigration: Hong Kong’s Crypto-Friendly Policies Extend Further

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According to media reports, following Hong Kong’s first acceptance of Bitcoin (BTC) as proof of investment immigration assets in October last year, another favorable policy has emerged. On February 7, 2025, an applicant successfully obtained investment immigration approval using HKD 30 million worth of Ethereum (ETH). Additionally, two other applicants holding BTC are currently in the process of applying for investment immigration. These groundbreaking policies position Hong Kong at the forefront of global virtual asset regulation and application.

Hong Kong accountant Xiao Yaohe, who handled the case, explained that applicants must hold cryptocurrency and obtain a verification report from a professional accountant to prove that their assets meet the required value. As of now, only BTC and ETH have been approved for such applications, while other cryptocurrencies like USDT have not yet received official recognition.

FinTax Brief Commentary:

1. The “Threshold” and Restrictions of Crypto Investment Immigration

According to Hong Kong’s investment immigration policy, applicants must first demonstrate ownership of assets worth at least HKD 30 million, including real estate, stocks, bonds, and other globally recognized assets. As Hong Kong adopts an increasingly open and inclusive attitude toward cryptocurrencies, it has started allowing equivalent amounts of crypto assets for financial verification. These cryptocurrencies can be stored in cold wallets or verified through leading exchanges such as Binance. Once asset verification is completed, applicants are required to invest in designated assets in Hong Kong, typically stocks or bonds of listed companies. So far, two applicants have successfully obtained investment immigration approval using BTC and ETH.
Despite the seemingly straightforward process, applicants still face multiple challenges in practice. The biggest hurdle is proving the source of funds. While Hong Kong does not trace back the initial source of funds (unlike Singapore, which requires a complete transaction history), it does require verification of the current asset’s legal ownership. If early transaction records are missing or if assets were held on now-defunct exchanges, they may not be recognized due to a lack of compliance documentation. Moreover, funds stored on exchanges are not automatically deemed legitimate. When seeking verification from an exchange, applicants may first need to prove the legality of their funds to the exchange itself, adding an additional layer of complexity to the process.

Another restriction lies in the types of cryptocurrencies accepted. Although Hong Kong allows legal trading and circulation of BTC, ETH, AVAX, and LINK, only BTC and ETH have so far been approved as proof of investment immigration assets. Whether other cryptocurrencies will be accepted remains subject to case-by-case evaluation. Industry experts believe that market stability is a key factor, which could explain why BTC and ETH—both relatively stable in value—have been approved.

Finally, this immigration route is not a one-time process but requires periodic renewal, with significant hidden costs. After passing the asset verification, applicants must complete their investment within six months. Upon completion, the Hong Kong government grants a two-year visa, which must be renewed upon expiration. Applicants must prove annually that their total investment remains at or above HKD 30 million and that they have not transferred their investment holdings, though losses on investments are not a concern.

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2. Institutional Advantages: Tax, Regulation, and Global Competitiveness

While Hong Kong’s investment immigration policy remains relatively strict, the approval of BTC and ETH as eligible investment assets demonstrates the city’s continuous efforts to innovate in crypto policies. By fostering a more favorable crypto ecosystem, Hong Kong aims to attract crypto elites to settle in the city. In fact, its advantages in the crypto industry go beyond investment immigration, extending to taxation, regulation, and overall competitiveness.

Tax-Friendly Policies
Hong Kong offers two major tax advantages:

●   Territorial Tax Principle: Hong Kong does not tax profits earned outside its jurisdiction, making it highly advantageous for crypto businesses operating internationally.

●   No Capital Gains Tax: Since Hong Kong does not impose capital gains tax, it is particularly beneficial for crypto investors who primarily generate income from capital appreciation. Compared to jurisdictions like the U.S. and the U.K., which tax capital gains at rates around 20%, and apply tax liability based on citizenship, crypto businesses and individual investors in Hong Kong can significantly reduce their tax burden. Additionally, in November 2024, the Hong Kong government submitted a proposal to provide tax exemptions for crypto-related investments by hedge funds and family offices. If passed, this policy would further enhance Hong Kong’s attractiveness as a crypto investment hub.

Clear and Structured Regulatory Framework

●   Clear Classification of Cryptocurrencies:
Hong Kong’s Departmental Interpretation and Practice Notes No. 39 (Revised) (DIPN39) categorizes cryptocurrencies into three types: payment tokens, security tokens, and utility tokens. Each category is subject to different regulatory requirements, avoiding the drawbacks of a one-size-fits-all approach.

●   Licensing System for Crypto Exchanges:
In 2023, Hong Kong introduced a licensing regime for cryptocurrency exchanges, requiring all crypto trading platforms to operate under a regulatory framework to ensure compliance and transparency. As of 2024, the Hong Kong Securities and Futures Commission (SFC) has issued licenses to nine crypto exchanges. This structured regulation fosters a safer and more efficient trading environment, supporting the long-term growth of the crypto sector.

●   Stablecoin Regulatory Sandbox:
Hong Kong has also made significant strides in stablecoin regulation. In March 2024, the government proposed a regulatory sandbox to cautiously advance the issuance of fiat-backed stablecoins (FRS) and facilitate the integration of traditional finance with Web3. Furthermore, the Hong Kong Legislative Council is reviewing the Stablecoin Ordinance Bill, which proposes a licensing regime for all HKD-referenced stablecoins (regardless of whether they are issued domestically or overseas). Under this framework, stablecoin issuers must comply with the principle of “same business, same risk, same rules,” strengthening reserve mechanisms and redemption guarantees, thereby reducing financial risks for stablecoin holders.

Hong Kong’s approach to the crypto sector is neither fully liberalized nor excessively restrictive. Instead, it seeks a middle ground between regulation and innovation. The core logic behind its policies is to integrate cryptocurrency within its financial system while enhancing inclusivity and competitiveness.

Recognizing crypto assets for investment immigration represents official acknowledgment of digital assets as a legitimate form of wealth. Coupled with a transparent regulatory framework and favorable tax policies, Hong Kong is implementing a comprehensive policy package to attract high-net-worth crypto investors and businesses. This, in turn, fosters a positive cycle of talent, capital, and industry growth, strengthening Hong Kong’s position as a global crypto hub.

In the long run, Hong Kong is leveraging cryptocurrency as a strategic entry point to merge its traditional financial strengths with Web3 innovations. By doing so, it is not only creating new momentum into its digital economy but also setting an example for a regulator-friendly approach to crypto adoption on a global scale.