The Hong Kong Diaspora and Hong Kong Returnees
Before the handover of Hong Kong back to China, a number of Hong Kong residents with estimates ranging from 250,000 to one million people immigrated abroad due to the uncertainty surrounding what would happen after the handover with Canada, Australia and the UK being populate destinations. Today, it’s estimated that 500,000 people in Canada are of Hong Kong descent (with many of them living in Vancouver, British Columbia) while around 70,000 people born in Hong Kong live in Australia and another 80,000 live in the UK. In addition, large communities of former Hong Kongers can be found in Auckland, the San Francisco Bay Area and Singapore plus the latest Chinese census (2010) counted approximately 234,829 Hong Kong residents living in Mainland China.
However and thanks to Hong Kong’s strong economy along with that of Mainland China, many people born in Hong Kong who immigrated or studied abroad have decided to return for professional and business opportunities. Specifically, it’s estimated that 30% of those who left Hong Kong in the 1980s have since returned while the Hong Kong returnee phenomena has even been given a Chinese name which in English translates to: “Hong-Kong returning tidal flow.”
The Hong Kong Recruitment Market
Hong Kong has over 7 million people, including at least 500,000 foreigners – many of whom are from the Philippines and other low income countries who work as domestic staff or manual laborers. However, foreign expatriates, Hong Kong returnees and locals alike will find the Hong Kong recruitment market to be intensely competitive where knowing Cantonese as well as Mandarin (especially when dealing with the Mainland) will be a big advantage.
Otherwise and despite global economic uncertainties, the Hong Kong recruitment market has largely remained stable with hiring concentrated in revenue generating positions such as sales and account management while hiring in the Hong Kong banking and finance sectors appears to be more sluggish. Nevertheless, Hong Kong’s recruitment market for finance and accounting, banking, legal services, marketing, IT and the real estate property sectors will likely remain a magnet for top quality foreign expatriate, Hong Kong returnee and local talent alike.
On the other hand, it’s also worth mentioning that the Hong Kong recruitment market faces increased competition for talent from mainland Chinese cities like Shanghai and is impacted by increasing numbers of locals taking jobs in Mainland China where their salaries tend to be higher while the cost of living will be significantly lower. In fact, some Hong Kong residents have decided to relocate their entire families to the Mainland when they accept a job there.
Working in Hong Kong
For foreign expatriates intending to work in Hong Kong, obtaining a Hong Kong work permit will be fairly straight forward depending upon the nature of the employment, salary to be paid and whether the person will be viewed as someone who can contribute to the economy of Hong Kong. However, for foreign expatriates who are citizens of Mainland China (whether residing in China or residing outside the country), Taiwan or are Macau residents, different rules will apply regarding entry into Hong Kong or for obtaining a Hong Kong work permit. For further information about Hong Kong visas and Hong Kong work permits, visit the website of the Hong Kong Immigration Department or the Gov.HK page for General Visa Requirements which also contains a number of links for foreign expatriates in special situations.
On the tax front, Hong Kong taxes are levied on residents and non residents alike either at progressive rates which range from 2% to 17% (after deductions for charitable donations, allowable deductions and personal allowances) or at a flat rate of 15% (after deductions for charitable donations and allowable deductions) – whichever is lower. Hong Kong taxes are also charged on income arising in or derived from Hong Kong from any office or employment. Moreover, Hong Kong residency for tax purposes will be determined by a couple factors, including where the contract of employment was negotiated, entered into and is enforceable; where the employer is resident; and where the employee’s remuneration is paid. For further information about Hong Kong tax rates or Hong Kong taxes in general, visit taxrates.cc, KPMG’s Taxation of International Executives page for Hong Kong or the website of the Hong Kong Inland Revenue Department.
As for Hong Kong salaries, its worth noting that while expatriate packages were commonplace in the Hong Kong job market in the past, foreign expatriates in Hong Kong are now much more likely to be paid on the same terms as locals. However and given the high cost of living in Hong Kong, compensation packages may actually equal or exceed what one can earn in the USA or Europe but foreign expatriates and returnees alike must also factor in high housing costs and especially schooling fees. Specifically and unlike in Singapore, there are no restrictions on local students attending Hong Kong’s international schools. That along with a flood of newcomers coming to work in Hong Kong means that it can be very difficult for foreign expatriates to find spaces for their children in international schools.
Nevertheless, Hong Kong taxes are very low in comparison to countries in the West – meaning a lower salary in Hong Kong may actually end up netting out higher for someone coming from New York or London where taxes are significantly higher. In addition, foreign expatriates and Hong Kong returnees alike usually receive a Chinese New Year or “13th month” bonus paid around January or February – unless there is a clause in the employment contract where it’s listed as being discretionary.