Setting Up Hong Kong Business, Employing Staff
Banks & MPF | Immigration | Incorporation | Office | Staff & Tax

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Employing Hong Kong Staff

For SME's finding good local staff can be a challenge. Junior level staff tend to change employers frequently. Don't be surprised if you see CV's with employment history with just a few months in any one position. The level of spoken English and arguably its understanding and interpretation can vary a lot. As you move up the level of seniority it becomes less of a problem, but still a key consideration. Also a lack of initiative or desire to develop skills and the ability to admit a mistake or ask how to do something. It's considered a weakness that could affect their career development and salary negotiations. The best balance in our opinion is to employ those who have been employed or studies abroad, they have a different approach to work. Depending on where you're company is located abroad be aware of the following. Those who have worked for a local company may work Monday to Friday and a half day on Saturday every other week without specified hours. Although more companies and Government Departments are moving towards a five day week. Hong Kong has more than average Public Holidays throughout the year. Annual leave will most likely be ten days a year. They will expect a one month salary bonus for Chinese New Year. Generally referred to as 13th month bonus for CNY. Some employers give travel and lunch concessions too, but by no means all. Paid sick leave is minimal and most employers require a certificate that requires a visit to the Doctor. Overseas Nations who have lived and worked for seven years or over will claim "Right of Abode" or what is generally referred to as "Permanent Residency" Their Hong Kong ID card will have an "A" code on the front. They are free of immigration control and do not require any employment visa.

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Got a question, CONTACT US, or go to our BLOG, Establish Hong Kong.

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Hong Kong Tax

Hong Kong taxes are among the lowest in the world, the tax regime is simple and predictable.

The Profits tax rate is the same for foreign and local companies is 16.5 percent. The actual tax bill is often even less after various deductions and depreciation allowances. Compared to a lot of countries tax deductible items are very generous

There is no capital gains tax in Hong Kong, withholding tax on dividends and interest or collection of social security benefits.

The salaries tax rate is banded from 2%-17%, with allowances, the standard tax rate is 15% imposed only on all salary income of individuals derived in or from Hong Kong. The salaries tax is demanded on a yearly basis and can be paid in two instalments, usually between December and March. First assessment is for two years and is carried forward until you leave HK or retire.

The property tax applies to owners of land or buildings situated in Hong Kong. It is low by international standards, 16 percent of the rental income from the land or buildings and an allowance is permitted for repairs and maintenance.

There is no sales tax GST or VAT in Hong Kong. The limited tax base, combined with exceptionally low tax rates, makes Hong Kong's tax incidence much lower than in virtually all other developed economies. New entities first filing of accounts can be for six quarters, the period starts after the date of incorporation.

For those that are having their rent paid while on secondment they will be taxed at 10% of the rental or allowance and is accepted by the Inland Revenue, despite the official method laid down by the HK Inland Revenue. There are various tax allowances available, amended rates are announced during the budget, for current amounts check with the accountant.

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Got a question, CONTACT US, or go to our BLOG, Establish Hong Kong.

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