Market Entry Guide Hong Kong.
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- Introduction
- Modes of Setting up a Business in Hong Kong
- Procedures for Immigration
- Social Security System in Hong Kong
- Special Economic Zones (SEZs) in Hong Kong
- Opening a Bank Account in Hong Kong
- Recruitment of Local Staff
- Taxation
- Appendix
Appendix I: Useful Links and Addresses
- Disclaimer
1 Introduction
Download PDF
- Introduction
- Modes of Setting up a Business in Hong Kong
- Procedures for Immigration
- Social Security System in Hong Kong
- Special Economic Zones (SEZs) in Hong Kong
- Opening a Bank Account in Hong Kong
- Recruitment of Local Staff
- Taxation
- Appendix
Appendix I: Useful Links and Addresses - Disclaimer
1 Introduction
Hong Kong, which stands for the Hong Kong Special Administrative Region of the People's Republic of China, is a global metropolis as well as an international financial, services, shipping and trade centre. It is known for its free capitalist economy, indirect democracy, efficient government and excellent public security.
The sovereignty of Hong Kong was transferred from the United Kingdom to the People's Republic of China (hereinafter referred to as China or PRC) in 1997; however, Hong Kong retained its highly developed capitalist economy system under the ‘One Country, Two Systems’ policy of China. Currently, it enjoys a high degree of autonomy in areas such as currency (Hong Kong dollar or HKD), legal system, political system, immigration control and rule of the road. However, foreign affairs and defence are under the jurisdiction of PRC.
Hong Kong has maintained strong economic growth over the past two decades, with its Gross Domestic Product (GDP) increasing at an average annual rate of 4.1 percent. In 2008, its GDP amounted to EUR 145 billion, indicating a 2.5 percent growth (real GDP). However, the figure is lower than the 6.4 percent growth recorded in 2007, weakened by the impact of the global financial crisis.
Hong Kong is a service-oriented economy, with the services sector accounting for over 92 percent of its GDP. This sector comprises wholesale, retail and import/export trade; restaurants and hotels; transport, storage and communications; finance, insurance, real estate and business services; community, social and personal services, and ownership of premises.
The success of Hong Kong as an international city is driven by the following fundamental advantages:1
Foreign direct investment (FDI): It was ranked Asia’s second largest and the world’s seventh largest FDI recipient in 2008 by the United Nations Conference on Trade and Development (UNCTAD).
Competitiveness: It ranked second in the World Competitiveness Yearbook 2009.
Business environment: It was rated the Best Location in Asia- Pacific for business in the Asia-Pacific Cities Monitor 2008; the Global Enabling Trade Report 2009 ranked Hong Kong second in the world for its openness to international trade; the Economic Freedom of the World Annual Report 2009 has been judging it the World’s Freest Economy for 13 consecutive years.
Cost of doing business and business risk: Milken Institute ranked Hong Kong second in the list of economies with the lowest costs of doing business and business risks, after Finland.
Taxation: According to Forbes Tax Misery Index 2009, Hong Kong has the lowest tax misery in Asia-Pacific and the third lowest in the world.
Rule of law: According to Political & Economic Risk Consultancy, Hong Kong has the best judicial system in Asia. In addition, according to Asian Corporate Governance Association’s CG Watch 2007, Hong Kong has the best corporate governance in Asia.
Availability of talent: Hong Kong’s three universities feature in the list of the world’s top 50 institutes, compiled by the Times Higher Education QS World University Rankings 2009. The Hong Kong University of Science & Technology EMBA programme ranks second in the world.
Immigration policies: In order to attract professionals, talent and investors, and ensure its continued competitiveness, Hong Kong focuses on promoting friendly immigration policies. Currently, it offers four types of visas for foreign nationals to live, work or invest in Hong Kong.
Hong Kong has a population of 7 million and an area of 1,054 km2, making it one of the most densely populated areas in the world.
The official languages of Hong Kong are Chinese and English; however, Cantonese, a Chinese language originating in Guangdong Province, is the first language of 95 percent of the population.
2 Modes of Setting up a Business in Hong Kong
This section discusses the common investment vehicles available to foreign investors, the procedures to be followed in order to establish them and related regulations for each investment mode.
Setting up a business by foreign investors in Hong Kong is easy, convenient and cheap. Generally, there is little difference between Hong Kong residents and foreigners when registering a company or unincorporated entity. Foreign investors can choose to set up either an incorporated or unincorporated entity based on their requirements. There are different options for company structure to suit different business requirements, of which the most popular is a limited company.
Table 1 lists the most common modes of setting up businesses by foreign investors and the legal characteristics involved in each type.
Table 1: Different Modes of Setting up a Business in Hong Kong
| MODES OF SETING UP A BUSINESS | CHARACTERISTICS | |
|---|---|---|
| As an incorporated entity under the Companies Ordinance: | Wholly foreign-owned enterprise Limited Company Unlimited Company |
|
| Wholly foreign-owned subsidiary |
|
|
| Joint Venture (JV) |
|
|
| As an unincorporated entity: | Representative Office (RO) |
|
| Branch Office |
|
|
| Individual |
|
|
| Partnerships |
|
|
Source: InvestHK; Inland Revenue Department, Hong Kong;
Companies Registry, Hong Kong
2.1 As an Incorporated Entity2
Setting up an incorporated entity is suitable either for a foreign corporate body or foreign individuals. It is the most accepted way of setting up a business in Hong Kong. Moreover, an unlimited company is not a good choice today as registering a limited company does not have many constraints but can offer many conveniences.
The Companies Ordinance governs the process of setting up a company— private and public, limited and unlimited—in Hong Kong.
A private company means a company that by its articles
- Restricts the right to transfer its shares
- Limits the number of its members to 50, not including persons who are in the employment of the company and persons who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be so after the determination of that employment
- Prohibits any invitation to the public to subscribe to any shares or debentures of the company
- Treats two or more persons jointly holding one or more shares in a company as a single member (for the purposes of this section)
A public company is also called a listed company, meaning a company that has its shares listed on a recognised stock market.
A limited company is one that is limited either by shares or by a guarantee. A company limited by shares has the liability of its members limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them, while a company limited by guarantee is a company having the liability of its members limited by the memorandum to such amount as the members may respectively thereby undertake to contribute to the assets of the company in the event of its being wound up.
An unlimited company is a company that does not have any limit on the liability of its members.
2.1.1 Steps to Establish a Company3
InvestHK, the department for FDI in Hong Kong, lists the following steps for incorporating a company on its website:4
Company Name and Structure Selection
Company Incorporation
Business Registration
Post-establishment Registration: Opening of bank account, selection of business premises, hiring of staff and applying for visas
The registration of a company includes the incorporation of a local limited company in Hong Kong and the registration of a non-Hong Kong company (for instance, a company incorporated outside Hong Kong which has established a place of business in Hong Kong).
2.1.1.1 Incorporation of a Local Limited Company in Hong Kong
Step 1: Select a name for the company
A unique company name needs to be chosen. The tentative name can be checked against The Hong Kong Companies Registry, which holds the names of all local limited companies in Hong Kong. The website can be accessed via an online company name search at the Companies Registry's Cyber Search Centre (http:// www.icris.cr.gov.hk/csci) or at its Public Search Centre on the 13th floor of the Queensway Government Offices in Hong Kong. A name that may infringe on the intellectual property rights (IPR) of a third party cannot be adopted. In addition, a search in the Trademark Register (http://ipsearch.ipd.gov.hk) maintained by the Intellectual Property Department should also be conducted.
Step 2: Submit the following incorporation documents with the required fees to the 14th floor of the Queensway Government Offices:
- Incorporation Form – Form NC1 (for a company limited by shares) or Form NC1G (for a company not limited by shares)
- A copy of the company’s Memorandum of Association and Articles of Association (if any) certified as true by a founding member of the company
Step 3: Collect the Certificate of Incorporation
Step 4: Business Registration
Foreign investors need to register the business with the Inland Revenue Department of the Government of Hong Kong Special Administration Region after obtaining the approval of the Company Incorporation. The Business Registration Ordinance (Cap. 310) requires every person (including foreigners) who carries on a business in Hong Kong to apply for business registration within one month from the date of commencement of the business, and to display a valid Business Registration Certificate at the place of business. Furthermore, if the registered particulars of the business have been changed, the business operator has to notify the Inland Revenue Department within one month of the change.5
Documents required for business registration include a copy of the Certificate of Incorporation issued by the Hong Kong Companies Registry and Form 1 (b) (specimen available at http://www.ird.gov.hk/eng/pdf/br_form1b_e.pdf) issued by the Inland Revenue Department.
Step 5: Post-establishment Registration: Opening of bank account, selection of business premises, hiring of staff and applying for visas
2.1.1.2 Registration of a Non-Hong Kong Company
Step 1: Select a name for the company
The steps to be followed are similar to the guidelines for registering a local limited company in Hong Kong.
Step 2: Submit the following documents with the appropriate fees to the 14th floor of the Queensway Government Offices:
- Form N1 – Particulars of a non-Hong Kong company registered in Hong Kong
- A certified copy of the instrument defining the company’s constitution, e.g., Memorandum and Articles of Association, Charter and Statutes, etc.
- A certified copy of the company’s Certificate of Incorporation (or its equivalent)
- A certified copy of the company’s latest accounts
Step 3: Collect the Certificate of Registration
Step 4: Business Registration
As in the establishment of a limited company, foreign investors need to register the business with the Inland Revenue Department of the Government of Hong Kong Special Administration Region after obtaining the approval of the Company Incorporation. The documents required for business registration are a copy of the Certificate of Incorporation or Certificate of Registration of Non-Hong Kong Company issued by the Hong Kong Companies Registry, and Form 1(b) issued by the Inland Revenue Department.
Step 5: Post-establishment Registration: Opening of bank account, selection of business premises, hiring of staff and applying for visas
2.2 As an Unincorporated Entity
Setting up an unincorporated entity in Hong Kong has fewer requirements than setting up an incorporated entity. The primary process that foreign investors need to complete is a business registration with the Hong Kong Companies Registry. The documents required include a Proof of Identity and an Application Form issued by the Inland Revenue Department, as shown in Table 2.
Table 2: Different Modes of Setting up Business in Hong Kong
| MODES OF SETING UP A BUSINESS | PROOF OF IDENTITY | CHARACTERISTICS |
|---|---|---|
| Individual | A copy of the passport or a copy of the identity card issued by the mainland (for people from Mainland China only) | Form 1(a) |
| Partnership | Copies of the passports of all partners, or copies of the identity cards of all partners issued by the mainland (for people from Mainland China only) | Form 1(c) |
| Unincorporated body of persons | A copy of the passport, or a copy of the identity card issued by the mainland (for people from Mainland China only) | Form 1(c) |
| Branch | None | Form 1(d) |
Inland Revenue Department, Hong Kong
2.6 Average Time (in days) Required for Setting up a Business
Hong Kong is one of the freest economic zones in the world in terms of convenience of setting up a business. According to Doing Business, a project supported by the World Bank, Hong Kong ranks 18th (Doing Business 2010 ranking, data for 2009) among the 183 economies (countries, regions and cities) in the world it studied.
Table 3 lists the data released by Doing Business related to starting a business in Hong Kong.
Table 3: Starting a Business in Hong Kong
| DATA RELATED TO STARTING A BUSINESS | YEAR - 2009 |
|---|---|
| Rank | 18th (in the world) |
| Procedures (number) | 3 |
| Duration (days) | 6 |
| Cost (% of income per capita) | 78.4 |
| Paid in Minimum Capital (% of income per capita) | 0.0 |
Source: Doing Business
Doing Business 2010 ranking also shows that starting a business in Hong Kong is easier than in most other countries and regions.
Figure 1: Obstacles in Starting Businesses in Various Countries/Regions (2009)
Doing Business 2010 ranking
Note: OECD = Organisation for Economic Co-operation and Development
3 Procedures for Immigration3
Foreign nationals must apply for a visa/work permit to visit, work, study, establish or join any business or to stay in Hong Kong longer than the allowed visa free period from the Hong Kong Immigration Authority, otherwise Hong Kong has the right to refuse the arrival and stay of foreign nationals.
3.1 Visa Provisions
Foreign nationals entering Hong Kong are required to apply for a visa or an entry permit, except
If they possess the following documents:
- British National (Overseas) Passport
- Travel documents with one of the following endorsements:
- ‘Holder’s eligibility for Hong Kong permanent identity card verified’
- ‘The holder of this travel document has the right to land in Hong Kong (Section 2AAA, Immigration Ordinance, Cap. 115, Laws of Hong Kong)’
If they enter the country for visit purposes, but only within the regulated time period
- Table 4 lists the countries whose nationals can enter Hong Kong without a visa or entry permit for visit purposes, only within the regulated time period.
Table 4: List of visa or entry permit free country/region (only for visit purpose)
| NO | COUNTRY | VISA FREE PERIOD FOR VISIT WITHIN |
|---|---|---|
| 1 | Algeria, Angola Diplomatic/Official Passport, Bangladesh Diplomatic/ Official Passport, Benin, Bhutan, Bosnia And Herzegovina, Burkina Faso, Burundi Diplomatic/Official Passport, Cameroon Diplomatic/Official Passport, Central African Republic, Chad, Comoros, Congo (Republic of) Diplomatic/Official Passport, Croatia, Djibouti, Equatorial Guinea, Ethiopia Diplomatic/Official Passport, Gabon, Ghana Diplomatic/Official Passport, Guinea, Guinea-Bissau, Haiti, India, Lesotho, Macedonia, Madagascar, Mali, Marshall Islands (Republic of), Mauritania, Micronesia (Federated States of), Mongolia, Mozambique, Niger, Pakistan Diplomatic/Official Passport, Palau, Philippines, Russian Federation, Rwanda, Sao Tome And Principe, Sri Lanka Diplomatic/Official Passport, Suriname, Togo Diplomatic/ Official Passport, US Trust Territory of Pacific Islands (Holders of US trust territory passports only), Vatican City. | 14 days |
| 2 | Bahrain, Bolivia, Cape Verde (Republic of), Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Indonesia, Jordan, Kuwait, Morocco, Oman, Paraguay, Peru, Qatar, Samoa (Western), Saudi Arabia, South Africa, Thailand, Tunisia, Uganda, United Arab Emirates, Yemen (Republic of). | 30 days |
| 3 | Andorra, Anguilla, Antigua & Barbuda, Argentina, Australia, Austria, Bahamas, Barbados, Belgium, Belize, Bermuda, Botswana, Brazil, Britain (British Overseas Territories Citizens, British Overseas Citizens, British Subjects And British Protected Persons), British Antarctic Territory, British Indian Ocean Territory, British Virgin Islands, Brunei, Bulgaria, Canada, Cayman Islands, Chile, Colombia, Cyprus (Republic of), Czech Republic, Denmark, Dominica (Commonwealth of), Ecuador, Egypt, Estonia, Falkland Islands & Dependencies, Faroe Islands, Fiji, Finland, France, Gambia, Germany, Gibraltar, Greece, Greenland, Guyana, Hungary, Iceland, Ireland (Republic of), Israel, Italy, Jamaica, Japan, Kenya, Kiribati, Korea (Republic of), Latvia, Liechtenstein, Lithuania, Luxembourg, Malawi, Malaysia, Maldives, Malta, Mauritius, Mexico, Monaco, Montserrat, Namibia, Nauru, the Netherlands, New Zealand, Norway, Papua New Guinea, Pitcairn, Henderson, Ducie & Oeno Islands, Poland, Portugal, Romania, San Marino, Seychelles, Singapore, Slovak Republic, Slovenia, Spain, St. Helena, St. Helena Dependencies (Ascension, Tristan Da Cunha), St. Kitts - Nevis Anguilla, St. Lucia, St. Vincent And The Grenadines, Swaziland, Sweden, Switzerland, Tanzania, The South Georgia And The South Sandwich Islands, The Sovereign Base Areas of Akrotiri And Dhekelia, Tonga, Trinidad & Tobago, Turkey, Turks And Caicos Islands, Tuvalu, Uruguay, U.S.A., Vanuatu, Venezuela, Zambia. | 90 days |
| 4 | Britain (British citizens) | 180 days |
| 5 | Countries except those in the table mentioned above and Afghanistan, Albania, Angola, Armenia, Azerbaijan, Bangladesh, Belarus, Burundi, Cambodia, Cameroon, Congo (Democratic Republic of) (Formerly known as Zaire), Congo (Republic of), Costa Rican Provisional passports, “Documento de Identidad Y Viaje” issued by Costa Rican Government, Cote D’Ivoire (Republic of), Cuba, Eritrea, Ethiopia, Georgia, Ghana, Grenada, Iran, Iraq, Kazakhstan, North Korea, Kyrgystan, Laos, Ebanon, Liberia, Libya, Moldova (Republic of), Montenegro (Republic of), Myanmar, Nepal, Nicaragua, Nigeria, Pakistan, Palestine (States of), Panama, Special Peruvian passports, Senegal, Serbia (Republic of), Sierra Leone, Solomon Islands, Somalia, Sri Lanka, Sudan, Syria, Tajikistan, Togo, Tongan National passports, Tongan Protected Persons passports, Turkmenistan, Tuvalu (with national status stated as ‘I-Tuvalu’), Ukraine, Uruguay passports issued under Decree 289/90, Uzbekistan, Vatican Service passports, Vietnam, All ‘stateless’ travel document holders. | 7 days |
Source: Immigration Department, Hong Kong
Table 5: Visas Issued by the Hong Kong Government
| NO | TYPE OF VISA | APPLICANTS | MAIN DOCUMENTS REQUIRED WITH APPLICATION | COMMENTS |
|---|---|---|---|---|
| 1 | Visit/Transit |
|
Onward journey ticket unless the destination is either Mainland China or Macau | NA |
| 2 | Employment as Professionals | People who want to enter/stay in Hong Kong for employment as professionals | Proof of employment (except for nonlocal fresh graduates) | The arrangement does not apply to the nationals of Afghanistan, Albania, Cambodia, Cuba, Laos, North Korea, Nepal and Vietnam |
| 3 | Training | People who cannot obtain the special skills in their own countries and want to enter Hong Kong for a limited training period (not more than 1 year) |
|
|
| 4 | Investment | People who want to enter Hong Kong for investment under the General Employment Policy |
|
|
| 5 | Study | People who are under the age of 20 and want to study in Hong Kong | An acceptance letter from the educational institution | |
| 6 | Employment as Imported Workers | People who want to work in Hong Kong as imported workers under the Supplementary Labour Scheme |
|
|
| 7 | Quality Migrant Admission Scheme | People who want to come to Hong Kong under the Quality Migrant Admission Scheme |
|
|
| 8 | Residence as Dependants | People who want to reside in Hong Kong as dependants | Proof of the applicant’s relationship with the sponsor (relevant certificates, birth certificates, etc.) | The arrangement does not apply to the nationals of Afghanistan, Albania, Cuba and North Korea |
| 9 | Capital Investment Entrant Scheme | People who want to make capital investment in Hong Kong without establishing or joining a business | Proof of net assets of not less than EUR 0.57 million. | The arrangement does not apply to nationals of Afghanistan, Albania, Cuba and North Korea |
| 10 | Working Holiday Scheme | People who are aged between 18 years and 30 years and whose main intention is to be in Hong Kong for a holiday | Proof of sufficient funds to cover the holiday | The arrangement only applies to nationals of Australia, Germany, Ireland and New Zealand |
| 11 | Hong Kong Special Administrative Region Travel Pass | People who want to come to Hong Kong frequently for visit purposes People who can enjoy the visa waiver concession | Proof of having come to Hong Kong at least three times in a one-year period before the application | NA |
Source: Immigration Department, Hong Kong
3.1.1 Documents Required for Visa Applications
Documents required for a visa application differ according to the visa type. In general, the following documents are required when applying for any visa type:
Application form
Visa application fee
Recent photographs
Supporting documents, such as financial standing
3.2 Procedures for Work Permits7
Foreign nationals can obtain a work permit in Hong Kong under the General Employment Policy.
3.2.1 Requirements for Eligible Applicants
No serious criminal record
Good educational background – Proof of special skills or abilities can be a substitute in some special circumstances
A real job vacancy
A confirmed employment offer
An income that meets the prevailing market level in Hong Kong
3.2.2 Documents Required for Work Permit Application
The following documents are required for a work permit application in Hong Kong:
Application form
Recent photographs of the applicant
Photocopy of the applicant’s travel document
Photocopy of the applicant’s Hong Kong identity card (if any)
Photocopy of academic qualifications and relevant working experience proof
3.3 Average Living Costs for Expatriates8
Hong Kong is one of the Asian cities with a high cost of living. It ranked 29th in ECA International’s 2009 global living cost survey.
Housing Cost: It constitutes the major part of the living cost; the rental cost varies according to the district while the average monthly rental cost is EUR 4–17 per square metre.
Transportation: Taxis and MRT (subway) are the popular modes of transport in Hong Kong; the monthly transport cost in Hong Kong is approximately EUR 88–175.
Food: Restricted by its geographical location, most of Hong Kong’s food comes from Mainland China and other countries, which results in higher prices; the monthly food cost in Hong Kong is about EUR 263 on an average.
Overall, the average monthly living cost in Hong Kong is in the range of EUR 875–1,313.
4 Social Security System in Hong Kong9
4.1 Social Security
Hong Kong’s government has established a non-contributory social security system to provide the basic and special needs for those who need financial or material assistance. The non-contributory social security system consists of the following five parts:
Comprehensive Social Security Assistance (CSSA) Scheme
Social Security Allowance Scheme
Criminal and Law Enforcement Injuries Compensation Scheme
Traffic Accident Victims Assistance Scheme
Emergency Relief Services
4.1.1 Comprehensive Social Security Assistance (CSSA) Scheme
The CSSA Scheme will provide the necessary financial support to eligible people to meet their basic needs.
The applicants should satisfy the following requirements to receive this assistance:
Residence requirements
- Should have been a Hong Kong resident for not less than seven years
- Should have resided in Hong Kong for at least one year (continuously) before the application
Financial requirements – The total asset value should not be more than
- (for a single person)
- EUR 1,969 – For an adult (in a sound body)
- EUR 3,064 – For a child, disabled person or elderly person
- (for a family)
- EUR 1,313–10,722 – Depending on the number of family members and their health status
4.1.1.1 Assistant Amount
Table 6 lists the assistant amount according to the three different payment types under the CSSA Scheme.
Table 6: Assistant Amount under the CSSA Scheme
| PAYMENT TYPE | ASSISTANT AMOUNT (PER MONTH) |
|---|---|
| Standard Rates |
|
| Supplement |
|
| Special Allowance |
|
Source: Social Welfare Department, Hong Kong
4.1.2 Social Security Allowance Scheme
The social security allowance scheme is applicable to those who are severely disabled or aged 65 or above.
Applicants should satisfy the following requirements to receive this assistance:
Should have been a Hong Kong resident for not less than seven years and should have resided in Hong Kong for at least one year (continuously) before the application
Should be residing in Hong Kong during the period of getting the allowance
Should not receive any other allowance under the scheme or allowance from the CSSA scheme
Is not under detention or imprisonment
Should satisfy the following criteria for receiving individual allowance:
- Normal Disability Allowance: People should get a certification from the director of the Health Department stating that they are severely disabled for at least six months.
- Higher Disability Allowance
- Besides being eligible for the normal disability allowance, people should get a certification from the director of the Health Department that he/she needs to be taken care of continuously by others in his/her daily life.
- People should not accept care from the government, institutions that receive financial aid (such as a caring house), a medical institution under the Hospital Authority or boarding in special schools belonging to the Education Bureau.
- Normal Old Age Allowance
- For people aged between 65 and 69
- For single people, with assets and a monthly income not exceeding EUR 14,968 and EUR 557, respectively
- For a couple, with assets and monthly income not exceeding EUR 22,583 and EUR 870, respectively.
- Higher Old Age Allowance: For people aged at least 70
4.1.2.1 Assistant Amount
Table 7: Assistant Amount under the Social Security Allowance Scheme
| ALLOWANCE TYPE | ASSISTANT AMOUNT (PER MONTH) |
|---|---|
| Normal Disability Allowance | EUR 88 |
| Higher Disability Allowance | EUR 88 |
| Normal Old Age Allowance | EUR 112 |
| Higher Old Age Allowance | EUR 224 |
Source: Social Welfare Department, Hong Kong
4.1.3 Criminal and Law Enforcement Injuries Compensation Scheme
The scheme allows for the provision of necessary financial support to people who have been injured because of a crime or by a law enforcement officer. It is a non-contribution scheme.
Applicants should satisfy the following requirements in order to receive this assistance:
The incident was reported to the police in time
The victim should have been a legal resident of Hong Kong when the incident happened
The application should be raised within three years after the incident
The victim died, or became disabled, or had to take at least three days of sick leave, because of the incident
4.1.4 Traffic Accident Victims Assistance Scheme
The scheme allows for the provision of prompt financial assistance to those who suffer road accidents. The assistance can be availed by those satisfying the following requirements:
The accident was in the scope of the Traffic Accident Victims (Assistance Fund) Ordinance (Chapter 229 of the Laws of Hong Kong) and has been referred to the police.
The victim was a legal resident of Hong Kong at the time of the accident.
The application should be made within six months after the accident.
The victim died, or became disabled, or had to take at least three days of sick leave because of the accident.
4.1.5 Emergency Relief Services
The service aims to provide meals or goods to people who are affected by natural disasters such as floods, fires and typhoons.
5 Special Economic Zones (SEZs) in Hong Kong
Hong Kong itself acts as a special economic zone (SEZ) and is considered as a model for SEZs by other economies. In fact, the term ‘SEZ’ was first coined by China in the 1990s by applying the successful experiences of Hong Kong to special areas/cities in Mainland China, such as Shenzhen and Zhuhai, which are located close to Hong Kong.10
Hong Kong has many advantages that have been elaborated throughout this market entry guide, enabling it to attract business and investment from the global market:11
It is a free port. Hong Kong is a natural port with advanced and highly efficient port facilities. Most importantly, Hong Kong does not have any customs tariffs, tariff quotas or surcharges on imports and exports except on four types of goods: liquor, tobacco, hydrocarbon oil and methyl alcohol.
It is a low taxation territory with a simple structure. There are no sales taxes, no capital gains taxes, no withholding taxes, no value-added taxes (VAT), no annual net worth taxes and no accumulated earnings taxes in Hong Kong. Furthermore, the tax rates in Hong Kong are extremely low in comparison to other economies.
It has world-class infrastructure in terms of public facilities, transportation (air, road and marine) and communication. It is the capital centre of Asia as well as the gate to Mainland China.
It applies Common Law, which is easily accepted by most western countries. Furthermore, the Hong Kong government is famous for its high efficiency.
It has an international business environment. In addition, English is one of its official languages.
It has a skilled and efficient workforce.
6 Opening a Bank Account in Hong Kong
6.1 Overview of Retail Banking
Hong Kong is the world’s ninth largest international banking centre, housing 146 licensed banks (23 incorporated in Hong Kong), 26 restricted licence banks (14 incorporated in Hong Kong) and 28 deposit-taking companies under the featured Three-tier Banking System, as of 16 October 2009. These institutes, together with 72 local representative offices of overseas banks, form a strong and sound financial network across Hong Kong. In 2008, the banking system remained robust and open; however, the global financial crisis led to low profitability during the period.12, 13
Hong Kong does not have its own central bank; the Hong Kong Monetary Authority (HKMA) acts as a government authority that maintains the region’s banking system. HSBC, the Bank of China (Hong Kong) and Standard Chartered Bank are the three authorised local commercial banks that issue Hong Kong dollar banknotes. According to the Banking Ordinance, all those authorised institutions in which deposits can be made are classified as banks, restricted licence banks and deposit-taking companies, among which only banks are allowed to operate current and savings accounts.14,15
The Hong Kong banking system has a non-discriminatory low tax regime and trimmed taxation structure. The system is considered efficient because it is supported by generous deductible allowances. Besides the HKD market, an RMB market is emerging in Hong Kong, which has boosted liquidity in the Hong Kong banking system.16
The following table lists major general banks in Brazil.
Table 8: Major Commercial Banks in Hong Kong (as of 16 October 2009)
| BANK TYPE | NUMBER OF BRANCHES | BANKS |
|---|---|---|
| Licenced Banks | 1,286 | Bank of China (Hong Kong) Limited, Hong Kong and Shanghai Banking Corporation Limited, Hang Seng Bank Limited, Bank of East Asia Limited, Standard Chartered Bank (Hong Kong) Limited, Dbs Bank (Hong Kong) Limited, Bank of Communications Co., Ltd, Chong Hing Bank Limited |
| Restricted Licence Banks | 5 | AIG Finance (Hong Kong) Limited, Allied Banking Corporation (Hong Kong) Limited, Lloyds TSB Bank Plc, Bank Mandiri (Persero) Tbk, Wachovia Bank, National Association |
| Deposit-taking Companies | 81 | Public Finance Limited, PrimeCredit Limited, HBZ Finance Limited |
Source: Hong Kong Monetary Authority
6.2 Procedure for a Foreigner to Open a Bank Account in Hong Kong17
6.2.1 Procedure to Open a Company Bank Account
The process and documents required to open a company bank account varies with the type of company and the bank. The basic requirements are as follows:
Certificate of Incorporation number (if the company is limited) or Business Registration Certificate number (if the company is a partnership or sole proprietorship)
Details of directors, authorised signatories and principal shareholders/beneficial owners
Telephone number of the company’s representative
Minimum deposit of about HKD 2,000 (EUR 175)
6.2.2 Procedure to Open a Personal Bank Account
Generally, a passport and a minimum deposit of HKD 200 (EUR 17.5) are required to apply for a personal bank account in Hong Kong.
7 Recruitment of Local Staff
Online recruitment is the most widely used method of hiring in Hong Kong. Other common channels include campus recruitment, head-hunting agencies and media advertisements (newspapers, magazines, TV and broadcasting), depending on the recruiter’s requirements.
7.1 Brief Overview of Labour Laws18
The Labour and Welfare Bureau (LWB) is responsible for the overall administration of the labour sector in Hong Kong. Its responsibilities include promoting employment, maintaining harmonious labour relations, safeguarding the labour rights of employees and enhancing safety and health at work.
The following are the major legislations enacted for regulating manpower in Hong Kong:
Employment Ordinance, Chapter 57: The Employment Ordinance, enacted in 1968, is the primary legislation governing the conditions of employment in Hong Kong. It includes a range of employee protection policies and benefits, including
- Wage protection
- Rest days
- Holidays with pay
- Paid annual leave
- Sickness allowance
- Maternity protection
- Severance payment
- Long service payment
- Employment protection
- Termination of employment contract
- Protection against anti-union discrimination
Factories and Industrial Undertakings Ordinance, Chapter 59: It regulates the policies providing safety and health protection to workers in the industrial sector.
Employees’ Compensation Ordinance, Chapter 282: It is responsible for the establishment and maintenance of a no-fault, noncontributory employee compensation system for work injuries.
Occupational Safety and Health Ordinance, Chapter 509: It regulates safety and health protection policies for employees in both industrial and non-industrial workplaces. It is an enabling ordinance deciding requirements in general terms.
7.2 Major Recruitment Agencies and Websites
Table 9 lists the major recruitment agencies in Hong Kong and their websites.
Table 9: Major Recruitment Agencies and Websites
| TOP THREE INTERNET RECRUITMENT AGENCIES | WEBSITES |
|---|---|
| Interactive Employment Service of the Labour Department | http://www.jobs.gov.hk |
| JobsDB Hong Kong | http://www.jobsdb.com/Hong_Kong |
| Recruit Online | http://www.recruit.com.hk |
| Leading head-hunting Agencies | websites |
| Asia Bridge Human Resource Ltd. | http://www.asiabridgehr.com.hk |
| Aquent | http://www.aquent.com.hk |
| Bó Lè Associates, Ltd. | http://www.bo-le.com |
Source: Job22
7.3 Average Salary
The median salary ranges (per year) by job, employer type, industry, city and degree in Hong Kong in 2009, as per Payscale, are presented in tables 10–14.
Table 10: Median Salary by Job in Hong Kong (2009)
| JOB | MEDIAN SALARY (IN EUR) |
|---|---|
| Information Technology Manager | 48,753 |
| Project Manager | 41,828 |
| Managing Director | 103,117 |
| Business Analyst, Finance/Banking | 32,469 |
| Marketing Manager | 32,167 |
| Operations Manager | 42,014 |
| Architect (but not Landscape or Naval) | 33,347 |
Source: Payscale, 2009
Table 11: Median Salary by Employer Type in Hong Kong (2009)
| EMPLOYER TYPE | MEDIAN SALARY (IN EUR) |
|---|---|
| Company | 34,866 |
| Private Practice/Firm | 32,377 |
| College/University | 33,800 |
| Other Organisation | 35,188 |
| Non-Profit Organisation | 24,167 |
| Government – State and Local | 34,977 |
| School/School District | 21,113 |
| Hospital | 30,455 |
| Self-Employed | 32,062 |
| Contract | 22,847 |
| Foundation/Trust | 28,249 |
| Government – Federal | 21,007 |
| Franchise | 34,618 |
| Team | 127,094 |
Source: Payscale, 2009
Table 12: Median Salary by Industry in Hong Kong (2009)
| INDUSTRY | MEDIAN SALARY (IN EUR) |
|---|---|
| Financial Services | 48,161 |
| Banking | 36,559 |
| Investment Banking | 52,976 |
| Information Technology Services | 27,187 |
| Manufacturing and Distribution | 42,100 |
| Telecommunications | 31,396 |
| Education, College/University | 39,525 |
Source : Payscale, 2009
Table 13: Median Salary by City in Hong Kong (2009)
| CITY | MEDIAN SALARY (IN EUR) |
|---|---|
| Hong Kong | 34,265 |
| Central | 37,637 |
| Victoria | 29,284 |
| Aberdeen | 59,673 |
| The Colony | 45,953 |
| Rapid City | 20,482 |
| Colon | 50,891 |
Source : Payscale, 2009
Table 14: Median Salary by Degree/Major Subjects in Hong Kong (2009)
| DEGREE / MAJOR SUBJECT | MEDIAN SALARY (IN EUR) |
|---|---|
| Master of Business Administration (MBA) | 62,236 |
| Master of Science (MS/MSc) | 38,169 |
| Bachelor of Business Administration (BBA) | 23,553 |
| Bachelor of Science (BS/BSc/SB), Computer Science (CS) | 29,279 |
| Bachelor of Arts (BA/AB) | 32,357 |
| Bachelor of Science (BS/BSc/SB) | 27,309 |
| MBA, Finance | 60,581 |
Source : Payscale, 2009
8 Taxation
8.1 Taxation in Hong Kong
Hong Kong is known for its low tax rate and simple taxation structure. It levies tax according to the territorial source principle, which means taxes are only levied on income ‘derived from or arising in’ Hong Kong, and not on income obtained from outside of its territory. Foreigners and locals residing in Hong Kong are liable to pay the same taxes such as salaries tax and profit tax.
The tax rates in Hong Kong are extremely low in comparison with other economies. In addition, there are no sales taxes, no capital gains taxes, no withholding taxes, no value-added taxes (VAT), no annual net worth taxes and no accumulated earnings taxes. The income tax rate is 2/7/12/17 percent for those who earn less than EUR 3,501/between EUR 3,501 and EUR 7,002/between EUR 7,002 and EUR 10,504/more than EUR 10,504 yearly, respectively. Corporate tax/profit tax is 16 percent of assessable profits.
Since Hong Kong is a free port, it does not have any customs tariff, tariff quotas or surcharges on imports and exports. Furthermore, no ‘value added’ or ‘general services’ taxes are imposed on imports and exports. However, import and export duty is levied on the following four types of goods:19
Liquors
Tobacco
Hydrocarbon oil
Methyl alcohol
Furthermore, foreign investors and businesses are required to pay three types of business taxes: business registration fee (considered as tax in Hong Kong), profit tax and property tax and stamp duty. Table 15 lists the tax types and respective rates.
8.2 Tax Rates
9 Appendix
Appendix I: Useful Links and Addresses
| TYPE OF ORGANISATION | ADDRESS | CONTACTS | WEBSITE |
|---|---|---|---|
| HONG KONG MINISTRIES, AGENCIES aND SERVICES | |||
| Hong Kong Special Administrative Region of the People’s Republic of China | Not Applicable | Not Applicable | http://www.gov.hk |
| InvestHK (FDI department under the Commerce and Economic Development Bureau) | Head Office 25/F, Fairmont House, 8 Cotton Tree Drive, Hong Kong |
Email: enq@InvestHK.gov.hk Tel: +852-3107 1000 Fax: +852-3107 9007 |
http://www.investhk.gov.hk |
| Commerce and Economic Development Bureau (CEDB) |
On matters pertaining to the Commerce, Industry and Tourism Branch: On matters pertaining to the Communications and Technology Branch: On matters pertaining to the Office of the Governmen Chief Information Officer: |
On matters pertaining to the Commerce, Industry and Tourism Branch: On matters pertaining to the Communications and Technology Branch: On matters pertaining to the Office of the Government Chief Information Officer: |
http://www.cedb.gov.hk |
| Hong Kong Monetary Authority | 55th Floor, Two International Finance Centre, 8 Finance Street Central, Hong Kong |
Email: hkma@hkma.gov.hk Tel: +852-2878 8196 Fax: +852-2878 8197 |
http://www.info.gov.hk |
| Labour and Welfare Bureau (LWB) | 2nd Floor, East Wing, Central Government Offices, Lower Albert Road, Central, Hong Kong |
Email: enquiry@lwb.gov.hk Tel: +852-2810 2300 Fax: +852-2523 1973 |
http://www.lwb.gov.hk |
| Labour Department of LWB | Labour Department 16/F, Harbour Building, 38 Pier Road, Central, Hong Kong |
Email: enquiry@lwb.gov.hk Tel: +852- 2717 1771 Fax: +852-2544 3271 |
http://www.labour.gov.hk |
| Financial Services and the Treasury Bureau (FSTB) | Rooms 1801-1803 and 1804(B), Tower I, Admiralty Centre 18 Harcourt Road, Admiralty, Hong Kong |
Email: info@fstb.gov.hk Tel: +852-2810 3824 Fax: +852-2147 5770 |
http://www.fstb.gov.hk |
| Inland Revenue Department of FSTB | Revenue Tower, 5 Gloucester Road, Wan Chai, Hong Kong |
Email: info@fstb.gov.hk Tel: +852- 187 8088 Fax: +852-2598 6001 |
http://www.ird.gov.hk |
| Companies Registry | 14th floor, High Block, Queensway Government Offices, 66 Queensway, Hong Kong |
Email: crenq@cr.gov.hk Tel: +852-2234 9933 Fax: +852-2596 0585 |
http://www.cr.gov.hk |
| Security Bureau | 6/F, Central Government Offices (East Wing), Central, Hong Kong |
Email: sbenq@sb.gov.hk Tel: +852-2815 7711 (Customs and Excise Department) +852-2527 7177 (Hong Kong Police Force) +852-2824 6111 (Immigration Department) Fax: +852-2530 3502 |
http://www.sb.gov.hk |
| Customs and Excise Department | 8/F Harbour Building, 38 Pier Road, Central, Hong Kong |
Email: sbenq@sb.gov.hk Tel: +852-2815 7711 Fax: +852-2542 3334 |
http://www.customs.gov.hk |
| Immigration Department | 2nd Floor, Immigration Tower, 7 Gloucester Road, Wan Chai, Hong Kong |
Email: enquiry@immd.gov.hk Tel: +852-2877 7711 Fax: +852-2596 0585 |
http://www.immd.gov.hk |
| Embassy of the People’s Republic of China in the Grand-Duchy of Luxembourg | 2, Rue Van Der Meulen, Dommeldange, L-2152 Luxembourg |
Email: ambchine@pt.lu Tel: +352-436991 Fax: +352-422423 |
http://lu.china-embassy.org |
| Luxembourg Embassy in the People’s Republic of China | Mr. Carlo KRIEGER 21, Nei Wu Bu Jie 100600 Beijing |
Tel: +86 10 65 13 59 37 +86 10 65 26 63 12 Fax: +86 10 65 13 72 68 Email: pekin.amb@mae.etat.lu |
|
| Luxembourg Trade and Investment Office in the People’s Republic of China | Mr. Pierre FERRING 12, Zhongshan Dong Yi Lu 200002 SHANGHAI People’s Republic of China |
Tel: +86 21 63 39 04 00 Fax: +86 21 63 39 04 33 e-mail: shanghai.cg@mae.etat.lu |
|
| Luxembourg Consulate General in the People’s Republic of China | Mr. Pierre FERRING 12, ZhongShanDongYi Road 200002 Shanghai |
Tel: +86 21 5353 0295 Fax: +86 21 5353 0296 e-mail: shanghai.cg@mae.etat.lu |
|
10 Disclaimer
The Government of the Grand Duchy of Luxembourg declines all responsibility regarding the use of information featured in this document. The contents are provided for information purposes only. They contain information which is not necessarily complete, exhaustive, precise or up to date. In the event of discrepancies between the texts of this publication and the original documents, the original documents as officially published shall apply. This publication may refer to external sites over which the Government of the Grand Duchy of Luxembourg has no control and for which it declines all responsibility.
February 2010
Luxembourg for Business
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Grand Duchy of Luxembourg
info@luxembourgforbusiness.lu
www.luxembourgforbusiness.lu
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