Hong Kong has a long history of welcoming overseas workers to share its rich cultural heritage, technical innovations and vibrant lifestyle. Hong Kong is seen as an important world market gateway for many multinational companies within IT, digital, advertising and HR industries. Popular job opportunities for expats can be seen within the financial sector, where local expertise is limited. Additionally, teaching positions are just as popular, with the Native-speaking English Teacher (NET)1 Scheme continuing to present opportunities for the expat teaching professional.2
In this article we take a look at some of the practical details expats should consider before making the move, including upfronts costs, the visa requirements to live and work in Hong Kong, the Hong Kong tax system and where to live.
What are the Hong Kong visa requirements?
Once you have confirmed an offer of employment, the next step is to apply for a visa. This can take up to six weeks, so early application3 is recommended. Both you and your employer need to complete application forms to obtain a visa. If you have any dependants you will also need to apply for your spouse4 and any children under 18. Only one work visa is needed per household, so, if you have a work visa, your partner will also be able to work in Hong Kong without needing to apply for a separate visa. Also, it’s worth noting that there are regulations on bringing over family pets, so make sure you visit Hong Kong’s Ministry of Agriculture, Fisheries and Conservation website to see what the requirements are.5
Within 30 days of receiving your visa, anyone over the age of 11 must register6 for a smart identity card. As well as carrying important immigration information that confirms your identity, the card can also be used for various non-immigration applications such as e-Certificates7, which can be used for online identity verification.
There is no fee to obtain an ID card, and you should carry it with you at all times. If your card is lost or damaged you must obtain a replacement within 14 days and pay a fee of HK$3708. You can register and obtain your ID card at any Registration of Persons Office in Hong Kong9.
Average upfront costs
Visas: HK$190 per visa10
Accommodation: Expect to pay around HK$45,000 per month for a three-bed apartment in Mid-Levels on Hong Kong Island, plus two to three months’ rent as deposit11 plus management fees and taxes
School fees: Expect to pay around HK$106,500 per annum (Primary Year 1-2) plus a HK$10,000 deposit12
Pet registration: expect to pay around HK$432, and HK$102 for every additional animal that is part of the same shipment13
Tax: expect to pay HK$76,500 per year (before allowances and deductions) based on salary of HK$450,000 with a progressive rate applied. 14
How do I pay tax in Hong Kong?
According to The Economist Intelligence Unit’s 2018 Worldwide Cost of Living survey15, Hong Kong is the fourth-most expensive place to live in the world, so planning your finances is essential. Luckily, Hong Kong operates a relatively low personal tax system, which means you could have more money in your pay packet to meet essential costs such as accommodation, school fees, and health cover.
Tax is applied on either a progressive rate starting at 2% and up to 17% for salaries over HK$135,00011 for tax year 2017/18, or at a standard rate of 15%, whichever is lower. Various allowances and deductions can be applied, and the Hong Kong tax authority operates a handy tax calculator16 to assess tax payable.
It is your responsibility, rather than your employer’s, to file a tax assessment, and the bill is payable in two lump-sum instalments every January and April. In your first tax year, you will also be asked to pay provisional tax for the following year, so anticipate paying a larger sum17 upfront. To help budget, it is possible to opt for regular Electronic Tax Reserve Certificates18 (TRCs), which allow you to build up funds for your tax payment.
Where to live
While Hong Kong’s favourable tax environment is a big plus for expats, its dense population means finding good accommodation at the right price can be a challenge. Popular expat areas, such as Mid-Levels on Hong Kong Island, or Discovery Bay, are in demand with expat families who have young children, because of their location close to expat schools and high-density expat communities. Here you can expect to pay HK$40,000-HK$50,000 per month15 for a three-bedroom apartment.
Prices can range quite significantly by area, e.g. in the exclusive Peak area, it’s not unusual to pay in excess of HK$100,000 per month15 for a three-bedroom apartment. For a more affordable monthly price tag15 of around HK$30,000, head for Kowloon or the New Territories.
Top tip: “To get a better feel for an area, take temporary accommodation before you commit to a long-term lease.”
Karen Lyons – expat of 15 years in Hong Kong
Except for serviced apartments, most rental accommodation is unfurnished, but often includes appliances. Rentals are payable monthly in advance and, serviced apartments aside, are generally exclusive of management fees and government taxes, which could add a further 12-15%19 on top of rental costs. There will also be legal fees for signing tenancy agreements and often an agency introductory fee equivalent to 50%16 of one month’s rent to take into account. Additionally, it’s wise to factor-in an upfront deposit of two to three months’ rent.
Looking at an example of a three-bed apartment in Mid-Levels on Hong Kong Island at around HK$45,000 per month, plus management fees of around HK$2,50020, could mean an initial payment of around HK$159,500 for the first month plus taxes and additional expenses. This could equate to roughly £14,330 or US$20,322 in upfront costs.
Top expat tips
- Ensure you have all essential documents and visas in place before departure
- Early application for school places is advisable
- Have up to three months’ rent available upfront to secure a rental property
- Be aware that you have to submit and pay your own taxes bi-annually
- Look at life insurance and health cover that reflect your location needs
- Stay healthy, immerse yourself in the culture and take language lessons
- Use online forums such as geobaby.com to talk to other expats about life in Hong Kong
While life in Hong Kong is an exciting prospect, the more preparation you do now, the more successful the move is likely to be. We hope this checklist arms you with the information and resources for your move.
Each week we will be creating new articles relating to Hong Kong so make sure you check in next week for our next article on the ‘Future of Hong Kong’.
The information provided in this article is designed as a guide to what you might expect in Hong Kong and is correct at the date of publishing. Please check any information with local Hong Kong authorities to make sure the information is still valid.