Global PEO Services (GPS) helps companies hire employees in Hong Kong without establishing a legal entity. All human resources, benefits, payroll, and tax needs for the employees are managed by the Global PEO, while the new hires and headquarter teams focus on your business goals.
When hiring employees in Hong Kong, establishing a subsidiary or branch office is not always the best route, as it’s often a lengthy and expensive process. Hiring via a Professional Employer Organization (PEO), or Employer of Record (EOR), is a faster and often more effective option – especially when starting up in a new country.
Global PEO Services hires the employees on your behalf, legally contracting them through our subsidiary in accordance with Hong Kong labor laws. As a result, the burden of compliance is on us and the employees can begin work for your company in a matter of days. PEOs/EORs provide you with a streamlined option for hiring employees, testing markets, and responding to growing business needs in Hong Kong. With Global PEO Services, you get control without taking on legal entity liabilities, contractor risks, or sacrificing on talent or speed to market.
Hong Kong - Country Overview
Hong Kong, covering an area of 1,104 sq. km, is an autonomous Chinese territory and one of the world’s major financial centers. It consistently ranks as one of the most open and competitive economies in the world.
High FDI inflows and outflows make Hong Kong the 4th best destination globally for investment.The country’s economy is expected to grow from 353.70 USD Billion in 2019 to 403.50 USD Billion in 2020.
Hong Kong’s tertiary sector-focused economy is supported by independent judiciary system and simple taxation. Trade is important to the economy. The combined value of exports and imports equals 375% of GDP. An efficient regulatory framework protects business freedom and transparency in rules for setting up business encourages entrepreneurship. The overall environment promotes formation and operation of businesses.
Hong Kong dollar (HKD)
Cantonese (official) 89.5%, English (official) 3.5%, Putonghua (Mandarin) 1.4%, other Chinese dialects 4%, other 1.6%
Tsuen Wan, Sha Tin, Tuen Mun New Town, Tai Po
Employment Contracts in Hong Kong
Employment contracts can either be verbal or written. If in writing, employers are required to provide a copy of the employment contract to employees. In case the contract is not in writing, employers must inform employees of the following terms prior to the start of employment:
- Wage period
- Length of notice required for termination, and
- If the employee is entitled to a year-end bonus, the amount of the bonus and the payment period
Working Hours in Hong Kong
Hong Kong law doesn’t have provisions of outlining work hours limits, and neither requires employers to provide rest periods, though the Labor Department’ Guide on Rest Breaks encourages employers to give breaks to employees. The guide mentions that employers, under the Occupational and Health Ordinance, must take steps to ensure the safety and health of employees at work. Employees can take at least 1 day off in a week, and it can be scheduled according to the employer’s convenience. Rest days can be with or without pay as agreed to by employers and employees.
Employee Leave in Hong Kong
All Sundays are holidays, in addition to several officially recognized holidays. Hong Kong observes the following national holidays, the dates of some of which differ year to year:
- Jan. 1: New Year’s Day
- Lunar New Year’s Day, date varies
- The 2nd day of Lunar New Year
- The 3rd day of Lunar New Year
- Ching Ming Festival, date varies, usually April 4 or 5
- May 1, Labor Day
- Tuen Ng Festival, date varies, 5th day of the 5th lunar month
- July 1, Hong Kong Special Administrative Region Establishment Day
- The day following the Chinese Mid-Autumn Festival, which is 15th day of the 8th lunar month
- Chung Yeung Festival, date varies, the 9th day of the 9th lunar month;
- Oct. 1, National Day, and
- Chinese Winter Solstice Festival, date varies in December, or Dec. 25, Christmas Day (at the choice of the employer)
The General Holidays Ordinance has provisions for providing general holidays when most schools, banks, courts, and government offices are closed. Certain registered schools and colleges can conduct classes on general holidays.
Employees are entitled to 7 days of paid annual leave after 12 months of employment with the same employer. Leave increases according to employees’ length of service:
- 8 days after 3 years of service
- 9 days after 4 years of service
- 10 days after 5 years of service
- 12 days after 8 years of service
- 13 days for 9 years
- 14 days for more
Employees, under a continuous contract, accrue 2 days of paid leave for every month of employment during the 4 year and 4 days of paid leave every month after the 1st year. Sick leave can be accumulated to a maximum of 120 days. Employees receive sick leave pay if they take 4 continuous days of sick leave and submit a medical certificate. The sick leave is paid at 80% of regular wages.
Pregnant employees are entitled to 10 weeks of paid maternity leave if they have:
- been working under a continuous contract for a minimum of 40 weeks prior to the start of maternity leave
- given notice of pregnancy
- submitted a medical certificate confirming pregnancy to the employer
- produced a medical certificate specifying the expected date of delivery if required by the employer
If the length of service is less than 40 weeks, employees qualify for 10 weeks of maternity leave without pay.
Hong Kong law has no provisions for providing paternity leave, but in November 2012, the labor advisory board set by the government recommended giving 3 days of leave at 80% of regular pay.
Employee Benefits in Hong Kong
Both employees and employers contribute to Mandatory Provident Fund (MPF) schemes which are privately managed. Under the MPF schemes, employees can invest in varied investment products and can transfer the funds to the new employer’s MPF scheme or a personal MPF account when changing jobs. Employees can also choose to keep the funds in the original employer’s scheme.
Individuals aged 65 or those who take early retirement at 60 can withdraw funds from their MPF accounts. If an employee dies before retirement, the funds are given to the employee’s survivors. Employees who leave Hong Kong permanently before retirement can withdraw funds from the MPF accounts.
Mandatory Provident Fund Schemes Ordinance (MPFSO)
MPFSO requires employers to enroll employees in MPF schemes, and both employers and employees are required to make contributions to it. Foreign nationals are not required to make contributions if they have an employment visa and:
- Contribute to a retirement scheme outside of Hong Kong, or
- Are posted in Hong Kong for no more than 13 months
Occupational Retirement Schemes Ordinance (ORSO)
ORSO establishes a registration system for retirees and also regulates certain retirement schemes.
Occupational Safety and Health Ordinance (OSHO)
OSHO ensures the safety and health of employees when they are at work and prescribes measures to improve the safety and health standards applicable to specific hazardous processes and substances used or kept at workplaces.
Employees’ Compensation Ordinance (ECO)
Employers are generally liable to compensate employees for an injury sustained during the employment in Hong Kong or overseas if the travel is authorized by the employer, under the ECO. Eligible family members of an employee killed in a work-related accident can also receive compensation. Employees must maintain insurance policies to cover their liabilities under the ordinance.