Hong Kong is one of the most popular destinations in the world for Asians and Westerners alike. It currently has a population of 7 million people with 95% of them being Chinese. The legal currency is the Hong Kong Dollar (HK$) and this is separate from China’s currency. Cantonese is the official dialect that is spoken in the Guangdong province and is the central language. However, Mandarin is also very important. English is also popular and you are likely to find it spoken in business areas, main tourist areas, and in large hotels. Signs are generally in both English and Chinese.
Hong Kong itself is a special administrative region (SAR) of the People’s Republic of China. Located on China’s south coast, it is bordered by the South China Sea and the Pearl River Delta. It is 60 km (37 miles) east of Macau and borders the Guangdong city of Shenzhen on the north. It has a world famous modern skyline and a deep harbor, thanks to its watery borders. The land mass is 1,104 km2 (426 sq mi) with such a large population, it is one of the most densely populated areas in the world. The Chinese majority of the population comes from Taishan and Guangzhou, located in the nearby Guangdong province.
Income tax and expat taxation is slightly different in Hong Kong than in other countries. Citizenship or residency isn’t necessarily considered when determining taxation. Any person who resides in Hong Kong for 60 days or more is subject to salary tax. However, salary tax is only considered for income that comes from business conducted inside of Hong Kong. If you have foreign income or assets then these are not taxed.
Both residents and expats are taxed at either a progressive 2% to 17%, depending on their income level, or a standard rate of 15%. Hong Kong does not have a capital gains tax.
It is important to keep in mind that, as an expat, you are generally still responsible for filing taxes in your home country. Even if you don’t have to file a tax return in your home country for income earned, you might still need to file one if you have property or own other assets. Tax rules and regulations will vary by country and government.
Visa, Residency & Immigration Laws
There are several types of work visas that can be obtained for those foreigners wishing to relocate to Hong Kong. Although the “employment as professional” visa is the most widely used, there are others available as well.
Unless you are a Chinese citizen, or have a British passport, you will probably need a visa in order to enter Hong Kong. A visitor’s visa, or transit visa, is a basic visa that allows entry into Hong Kong. If you plan on entering Hong Kong, looking for employment, and then going back home and applying for a work permit after you have received an offer of employment then you are probably going to need a visitor’s visa.
Before you begin searching for a property to buy in Hong Kong, you should first work with your bank or financial institution to find out how much of a mortgage you could get pre-approved for what your expected monthly payments would be. You should also be prepared and anticipate other associated costs, such as insurance, mortgage arrangement fees, estate agency fees (1% of the property's value), attorney’s fees, and the stamp duty (on average about 3% of the property's value).
You might want to start by picking your favorite location and checking any comps that are available. This will give you an idea of how much you can expect to spend in that area. A good real estate agent will be able to help you out with this as well. It is also important to keep the gross floor area (GFA) in mind when looking. The majority of the properties and apartments for sale in Hong Kong are quoted in “gross floor area.” According to the “Real Estate Developers Association of Hong Kong” this refers to the sum of the unit’s covered and apportioned share of common area. However, the amount of common area can differ depending on the building and the basis of calculating GFA may also differ with developers. The price per square foot when judging by the GFA might be misleading.
Retiring in Hong Kong
Hong Kong does not have an official retirement age, although those who have benefits under the Mandatory Provident Fund (MPF) scheme are able to access them at age 65 (unless they retire early, which is normally between the ages of 60-63).
Before departing for Hong Kong, it is wise to consult with someone in your country who is knowledgeable in your government pension plan if you are contributing to one. It is possible that you may have to continue making payments to it while you are abroad. If you do not have such a plan then investing in your own individual retirement account might be worthwhile as well. Although there are a few companies in Hong Kong that offer private retirement funds to their employers, these are few and far between.