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Hong Kong has always been one of the world's most exciting cities and
for the most part has seen very little change since the
"Handover" back to China in 1997. MLI's links with
China can be traced back
to 1896 in Shanghai, and the founding company's first office in Hong Kong
was opened in 1920. We have spent many years working with financial
products for people living and working abroad, and the following
is advice on how to make the most of your money, and other key issues such
on healthcare and education, when moving to Hong Kong.
For the expatriate, moving to a new culture, where east meets
west, can be daunting and you take the risk of exchanging the familiar for
the uncertain. More often, the risk pays off. Nevertheless, your chances of
success are greater if you have access to good independent
financial advice. These few paragraphs are to help you make the most of the
benefits, and avoid the pitfalls.
As a result of "localisation", where preference is given to local
staff, the draw on foreigners is usually reserved for positions
when no suitable local person can be found to "fit the
bill". In addition, the old-style
contracts offering the full range of benefits or "package" are in
many instances being replaced by local packages;
and the traditional benefits such
as school fees,
healthcare and free flights home are no longer the norm. Be sure to check your employment terms
and conditions, so that you know your full entitlement.
Banks
Banks keep much
the same hours as offices. Hong Kong has
more than 180 different banks with around 1,500 branches. The most popular
expatriate banks include Standard Chartered and the Hong
Kong and Shanghai Banking Corporation (HSBC).
Currency
The currency of
Hong Kong is not surprisingly, the Hong Kong
dollar and it has been pegged to the US dollar since 1983.
Tax
For an expatriate,
the low taxation is one of the benefits of
working in Hong Kong, with a basic
salaries tax of just 2% rising to a current maximum of 16%. The authorities have long taken a laissez-faire
attitude to business, with a free enterprise stance, low taxes and no exchange
controls. Even so, it always makes sound advice to seek professional advice
on tax matters.
Residence
This may have
different implications depending on where you are coming from. MLI can offer you advice, and your company's HR department
should also be able to assist you with this.
Domicile
This may have different meanings depending on your
nationality, but with some exceptions, the
following is true. Whilst a change in residence is simple to arrange, a
change in domicile is more difficult. For an example, if you stay domiciled
in the UK while living
in Hong Kong then your heirs will potentially be liable for inheritance tax
in the UK.
Professional advice should be sought on this matter and MLI are qualified
to answer most of your questions.
Investing
One of the main benefits of
investing as an expatriate, is that being "offshore" your money
grows "gross" (without any deductions for tax). One vital
requirement to ensure that you really can enjoy your low or no tax
investment, is to keep well away from investments from offshore centres
with insufficient investor protection. Where possible choose investments
originating from offshore tax havens such as the Isle of Man, Jersey or Dublin
which have strict regulations to protect investors' money and an investor
friendly culture.
Pensions
Are you and/or your
employer paying enough towards your pension? If you are, then you are in
the minority, so make doubly sure you are putting a realistic, rather than
an optimistic amount aside for your pension fund. At MLI we have a vast
wealth of experience in this area and will be happy to offer
advice.
Mortgage Finance
Buying a home for
investment, or planning to return home? If you are then much of your
investment strategy should centre on the most appropriate methods of raising
money to pay off your home loan.
Healthcare
Hong Kong has no
National Health Service, as in the UK, and healthcare can be very
expensive, so it is wise to invest in health insurance for you and your
family. Government hospitals have a small charging system (available to Hong Kong residents and expatriates that hold a Hong
Kong Identity Card), and private hospitals can be very expensive if you are
not covered by health insurance. The cost of insurance may vary from one
insurer to another. Remember to compare not just the cost but also the
practicalities such as, what exactly is covered and how long it takes to
pay out a claim.
Education Fees
Traditionally, most
companies have paid for all or part of the cost of education for its
expatriate staff. These "perks" are no longer as common as they
were.
If you have to build up savings and investments to put aside for your
children's education then an offshore haven like Hong
Kong is the best place to do it, because your investment
income and gains can roll up tax free.
The attraction of a dedicated investment plan for education gives parents
the peace of mind of having a complete package tailored specifically for
the payment of school fees or university, including living costs.
At MLI we have been providing solutions for Education Fees for many years,
and will be happy to assist you with your future planning.
Additional Services
MLI have a wealth
of experience that enables us to put you in touch with other professional
services. We have developed professional contacts in the following areas
of:
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