hong kong working & living environment by luckboy

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									Hong Kong Working & Living Environment
Updated in November 2008

Economy ________________________________________________________________
Hong Kong, officially the Hong Kong Special Administrative Region, is a territory located on China’s south coast that borders China’s Guangdong province. Along with Macau, Hong Kong is one of two special administrative regions and is generally not considered as part of mainland China. Under the "1 country, 2 systems" policy, Hong Kong has a high degree of autonomy, is largely self-governing, and maintains a highly capitalist economy. It is one of the world's leading financial capitals and a major business and cultural hub.

Total labor force increased to an all-time high of 3.67 Million during July-September 2008. However, unemployment rate increased to 3.4% as of September 2008. The average wage rate for all the major sectors surveyed, as measured by the wage index, rose by 3.9% in nominal terms in June 2008 over a year earlier.

Taxation ________________________________________________________________
Hong Kong is famous for its simple and low tax rates which appeal to both corporate and individual taxpayers. Low tax rate is one of the most cited reasons for foreign corporations to set up offices in Hong Kong. It has a territorial tax system, imposing taxes only on profits or income generated in Hong Kong. The principal direct taxes are profits tax on business profits, income tax from salary, and property tax on property income.

Welcomed by investors, there are NO taxes for capital gains, dividends, interests, estates, goods and services, or social security. A few items require duty. This tax regime makes it one of the lowest tax environments among developed countries.

Mandatory Provident Fund (MPF) ________________________________________________________________
Hong Kong does not have a social security system. To secure a well-protected retirement life for the citizens, Hong Kong government imposes mandatory pension contributions to Hong Kong's MPF by both employers and employees. This MPF is a privately managed fund designed to provide retirements benefits.

In general, MPF applies to all members of the workforce between ages 18 and 65. Both employers and employees are required to contribute 5% of the employee’s monthly income into a registered MPF scheme, with a maximum of HKD$1,000 each per month. However, employees may elect to contribute more. No mandatory contribution is required for employees earning less than HKD$5,000 a month.

Working Visa ________________________________________________________________
All foreigners intending to work in Hong Kong need to obtain a working visa. Special rules apply to dependents of persons admitted as professionals and to those who apply under the Capital Investment Entrant Scheme or the Quality Migrant Admission Scheme. All employers and employees are bound to comply with the labour laws in Hong Kong.

There are 4 main types of visa and entitlement for long-term stay in Hong Kong:
• • • •

Obtain a work visa for employees. Obtain a visa through investment, called the Capital Investment Entrant Scheme. Obtain a visa through the Quality Migrant Admission Scheme. Obtain a dependent visa.

Weather ________________________________________________________________
Hong Kong’s climate is sub-tropical. During November and December, there are soothing cool breezes, abundant sunshine and comfortable temperatures. January and February are generally cloudy, with occasional cold fronts followed by dry winds. Temperature may drop to or below 10°C at times.

Hong Kong has a weather warning system to ensure safety during raining season (June, July) and during typhoon season (August, September). Luckily, it is not in an earthquake zone. You may refer to the Hong Kong Observatory for more information about the climate in Hong Kong.

Language ________________________________________________________________
English and Chinese Cantonese were the two official languages of Hong Kong but Chinese Mandarin is becoming more common since it became China’s special administrative region in 1997. English is widely spoken by locals in the business and tourist communities. Although the population is predominantly Chinese, residents and expatriates of other ethnicities form a small but significant segment of society.

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Hong Kong has a reputable freedom in press and speech. It has a well-developed telecommunications infrastructure which allows open access to international media and foreign newswire content via all channels including TV, print and online.

Housing ________________________________________________________________
Hong Kong has a population of 6.9 Million, and is one of the most densely populated areas in the world. Due to the limited space, the cost of housing accounts for a substantial portion of one’s income. There is a full spectrum of accommodation available in Hong Kong in terms of size and price range. Types of accommodation range from detached villas with private garden to multi-story apartments.

Many foreigners moving to Hong Kong opt for lease of properties. Most lease term lasts two years, subject to a 2-month notice of your intention to leave after 1 year. In general, it’s difficult to obtain a lease for periods shorter than 14 months. Usually, the landlord will request a 2-month rent as deposit. Rent is paid monthly but management fee may not be included. Utilities are paid by the tenants.

Use of a real estate agent is a common practice. There is a wide selection of international property agents in Hong Kong. Commission is usually half to 1 month of rent for successful case. There are many other alternatives: • Leases at hotels. Some hotels provide discounted rate or special package for people who are lodging for a number of weeks or months. • Serviced apartments. This option becomes popular in the expatriate community. They are operated and managed by companies that provide fully furnished apartments with maid services akin to that of the hotel. • Property Purchase. Expatriates looking at a longer-term stay might go for purchasing a flat under their own name. Banks may lend up to 95% of the value and interest rates are generally

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quite low compared to other developed economies. There are no restrictions on foreigners owning property in Hong Kong.

There are certain tax benefits in connection with accommodation in Hong Kong. A housing allowance from the employer presents income tax savings for the employee. In addition, mortgage interests for residence in Hong Kong are entitled to certain tax deductions.

Education ________________________________________________________________
The English Schools Foundation (ESF), a school system established by the Hong Kong government to provide a modern and liberal education in the medium of English, runs three kindergartens for children between 3 and 5. The primary schools and secondary schools accept children aged 5-11 and 11-18 respectively. The courses offered lead to the General Certificate of Secondary Education examinations in year 11 and to GCE Advanced level examinations in year 13.

Some 40 private schools operate at primary and secondary levels for incoming expatriate children. These schools offer different foreign curriculums: American, Australian, British, Canadian, French, German-Swiss, International Baccalaureate, Japanese, Korean and Singaporean.

When you choose a school, please keep in mind you may be required to buy a debenture or to pay an annual contribution by the parents or sponsoring companies to most international schools. Since international schools have long waiting lists, incoming parents are advised to made arrangements in advance.

For more information about Hong Kong, please visit http://www.immd.gov.hk/ehtml/home.htm.

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