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Employing in Hong Kong

At a glance

Employment in Hong Kong

Foreign companies that employ workers in Hong Kong face several challenges and must adhere to the legal and regulatory framework that is in place. Employment in Hong Kong is said to be less regulated than it is in many other jurisdictions, but there are still statutory requirements that must me met.  In some cases, using an outsourced employer will make the process smoother, and it is recommended to use professional legal services as well.  Our guide explains Chinese policies on leave, termination and payment of benefits.

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Payroll & Tax in Hong Kong

Complying with local payroll and tax requirements is essential for a company doing business in Hong Kong.  Issues such as tax rates and withholding and social security are all essential in ensuring a seamless human resources operation.  Many companies will consider outsourcing these administrative tasks to a GEO (Global Employment Organization).

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Immigration / Work Permits in Hong Kong

Foreign workers are required to have the proper visas and work permits in China, as established by immigration laws.  This often requires incorporation and licensing prior to sponsoring work permits for employees, which can be a problem if your company is trying to enter the country quickly.  Some nationalities can enter the country without a visa and organize a work permit from inside the country.

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Incorporation

There are several business structures available for incorporation in Hong Kong, and each has advantages and disadvantages.  In some cases it will depend upon the type of industry that you are in, and the scope of planned business activity.  Our guide has a comparison of the time and cost for incorporating standard company structures including Rep Office, Branch Office and Subsidiary Company.

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GEO Solutions or DIY Employment in Hong Kong?

Companies entering Hong Kong must make a decision whether to use their own resources for a Do-It-Yourself (DIY) approach, or to use a Global Employment Organization to handle payroll and employment responsibilities.  A GEO or Hong Kong Employer of Record solution makes it faster, easier and cheaper to deploy staff if they don’t have a Hong Kong entity established that can run payroll.

A DIY approach will take some time and expense until there is a properly incorporated entity ready to run payroll. Shield GEO can deploy foreign staff in 4-6 weeks and local staff in 48 hours. Additionally Shield GEO is responsible for all compliance issues related to the employment.

Shield GEO

Shield GEO provides a fully outsourced employment service in Hong Kong. Companies expanding into Hong Kong can contract with Shield GEO to employ and payroll their staff on their behalf in Hong Kong.  Shield GEO then assumes the legal responsibility for these employees, becoming the Employer of Record, sponsoring them on work permits, complying with local employment law and running their monthly payroll.

Using Shield GEO Employer of Record Services in Hong Kong

Payroll Hong Kong
Management Fee for Employer of Record Services / Monthly Payroll Costs

Please contact us for a quote

Notes

Both Residents and Non-residents must complete tax returns in May each year, with their Employer required to submit an employer’s return for each employee by 31st of March in the same year. Based on the return the employee’s tax liability for the year in question and their provisional liability for the following year will be calculated. Tax payments are made in January and April, the outstanding amount of the preceding year and 75% of the provisional tax for the current year are paid in January, the remaining 25% of the provisional tax paid at the end of the year of assessment in April.

 
Grossed income Tax Rate (%)
HKD 0-40,000 2%
HKD 40,001 - 80,000 7%
HKD 80,001 - 120,000 12%
HKD 120,001 + 17%

Expats are able to offset their taxable income with relevant business expenses. More info at KPMG here

Tax Returns Supplied

Yes

Employers Social Security and statutory contributions

Employer MPF (Mandatory Provident Fund) is 5% of gross income calculated on a max of HKD 30,000 per month

Employees Social Security and statutory contributions

Employee MPF (Mandatory Provident Fund) is 5% of gross income calculated on a max of HKD 30,000 per month

Insurance requirements

Private Medical Insurance is advised.

Corporate Income Tax Rate

16.5% for Hong Kong sourced profits from business carried out in Hong Kong.

Payroll Tax

N/A

Sales Tax

N/A

Withholding Tax

N/A

Work Permits
Can Sponsor Work

Yes, Shield GEO is able to sponsor foreign workers on Work Permits (Employment Authorisation) which allows them to work in Hong Kong. As the Employer of record, Shield GEO handles all of the formalities and employment requirements in Hong Kong. The client maintains responsibility for day to day employee management.

Work Permit cost

USD $2,500 USD

Work Permit processing time

4-6 weeks. HKID card will take a further 2 weeks on arrival.

Work Permit process

Shield GEO applies for the Employment Visa with the Hong Kong Immigration Department. Once visa issued the employee must enter Hong Kong within 90 days.

HKID (Hong Kong ID) application must be filed within 30 days of the employee’s arrival.

Documentation required :

  • passport copy
  • passport photos
  • employment contract
  • degree/diploma documents
Can Work Permit be processed in country

No

Switch Business Visa to Work Permit?

No

Can Spouse work on dependent visa?

Yes

Business Visas
Can do Business Visa

Yes

Business Visa Cost

USD $450

Business Visa processing time

3-7 days depending on the consulate

Others
Can supply private health care

Yes

Can assist opening bank accounts

Yes

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Expanding into Asia – A Simple Solution to International Employment
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