A guide to Hong Kong

Careers

The focus on free and fair competition has made Hong Kong attractive to multinational businesses, particularly financial services, and it has one of the world’s highest per capita GDPs. Salaries are high, especially for people in finance or executive positions, and there’s a lot of opportunities for expats who want to progress their career. Some employment packages may even include a housing allowance and medical insurance.

Business culture is conservative, with an emphasis on professionalism, punctuality, respect, and deference to seniority. When greeting someone, shake hands, then exchange business cards using both hands as a sign of respect. Gifts are given at first meetings and on important anniversaries, and should also be received with both hands, then opened in private later.

Education

Education is treated seriously in Hong Kong – teachers are respected, and students are well behaved. The school year runs from September to July, with a long summer holiday.

Most children go to government-funded public schools. Although, if you’re on a temporary visa, you may have to pay fees. Children go to schools in their catchment area, which can affect property prices in areas with good schools.

A lot of private schools tend to teach in Cantonese. Standards are high, but learning is often through repetition. Private tutoring is common due to the competitive nature of these schools and children often spend several hours at extra lessons after school.

There are international schools in Hong Kong that follow British, American, and Australian curricula, but competition for places is fierce. It’s advisable to contact schools before you move or ask your employer to help you secure a place.

Moving money

Putting the right banking arrangements in place is vital for expats around the world. You want to be able to access and transfer money easily, and with a bank you can trust to comply with international regulations. Most people have two banks – one in their home country and one local to where they’re living. If your bank has a global network, you may be able to set up an account ahead of your arrival, which gives you time to assess the financial market.

It’s important to understand how foreign exchange works and how fluctuating exchange rates can affect you. When you’re juggling finances in multiple currencies, remember that the currency markets can move quickly and make a big difference to the value of your money.

To help you reduce the risk of fluctuating currency, you could choose a foreign exchange that lets you fix an exchange rate for a fixed period. Then you’ll know exactly how much you need to convert, whatever happens in the market.

Budgeting

When you’re looking to move to a new country, you need to consider how a change in the cost of living could affect your finances. If you’re moving with your job, sometimes your employer may help with expenses, such as accommodation or school fees. Remember to account for setup costs, such as buying furniture and sorting insurance, when you’re thinking about your budget.

Costs

Some of our offshore accounts have a monthly fee, such as the International Current Account, whereas others, like the Premier International Account, don’t. Both offer fee free International Payments (correspondent and recipient bank charges may apply) and 24/7 worldwide access. Plus, the Premier also includes worldwide travel insurance for you and your family, which is underwritten by AWP P&C SA and administered by Allianz Assistance, which is a trading name of AWP Assistance UK Ltd. Eligibility criteria, terms and conditions apply.

Financial planning

While it’s going to be a busy time, it’s also worth setting some time aside to review your financial plans, like whether you want to open an offshore account. They offer the convenience of keeping your money in one place, so you can stay with the same bank no matter where life takes you.

Your expat status could give you new opportunities that weren’t available to you at home. However, tax rules differ from country to country, so if you’re unsure about your personal tax obligations, you should seek professional advice.

Lloyds Bank International Private Banking is by your side every step of the journey as you start your new life abroad. We offer international knowledge, experience and dedicated expert support to help meet all your financial needs. From savings  to international payments and transfers, we can help you navigate the complex world of wealth management away from home.

Security

Offshore accounts are not protected by the Financial Services Compensation Scheme (FSCS), which protects savings up to £85,000 with authorised UK banks and building societies.

However, our accounts are covered by other schemes. The Jersey Bank Depositor Compensation Scheme, the Isle of Man Depositors’ Compensation Scheme and the Guernsey Banking Deposit Compensation Scheme offer protection for eligible deposits of up to £50,000.

Tax

There are three separate income taxes in Hong Kong:

• Salaries tax – levied on net chargeable income at progressive rates ranging from 2% to 17%, or at a flat maximum rate of 15% on assessable income, less personal deductions, whichever is lower. It must also be paid on income earned from an office, employment or services rendered in Hong Kong during visits longer than 60 days in the tax year.
• Profits tax – the rate of tax for the first HKD2 million of profits of unincorporated businesses is reduced from 15% to 7.5%. The remainder continues to be taxed at 15%. Any profession, trade or business in Hong Kong is subject to profits tax on income arising from that.
• Property tax – a flat rate of 15% on rental income after a standard deduction of 20%. If you receive rental income but the rental activities do not constitute a business, the income is subject to property tax instead.

Hong Kong has double tax agreements with 45 countries to avoid individuals paying the same tax twice. It’s worth checking if this could apply to you.

If beneficial, a permanent or temporary Hong Kong resident individual may elect to have a personal assessment on the aggregate of their income or losses from all sources.

A basic allowance of HKD132,000 or married person's allowance of HKD264,000 (if spouse has no chargeable income or elects for joint assessment) is available.

Interest income not derived from investing the funds of a business and all dividend income are exempt from taxation.

Stock options and share awards provided by an employer are generally taxed as part of the remuneration package.

Hong Kong does not have capital gains, estate, or social security taxes.

The tax authority is the Inland Revenue Department (IRD) and the tax year runs from 1 April to 31 March, with the tax return date of 31 October. See Inland Revenue Department (ird.gov.hk) for further information.