Summary
Mr. John Lee Ka-Chiu, the Chief Executive of Hong Kong SAR Government, delivered his second policy address today. Following the implementation of the initiatives from Mr. Lee’s first policy address and coming out of the pandemic, the Government will continue to create strong impetus for growth. Among other policy measures, the focus on retention and attraction of overseas talent and enterprise is clear. The Government will develop “headquarters economy” to attract enterprises from outside Hong Kong to set up headquarters and/or corporate divisions in Hong Kong. Facilitation mechanism will also be introduced to attract companies domiciled overseas, in particular those with a business focus in the Asia-Pacific region, for re-domiciliation to Hong Kong.
New Immigration Measures
To accommodate the above initiatives to trawl for enterprises and talents, new immigration measures have been announced as follows:
| Immigration Measure | Details |
| Facilitation of business travels to the Mainland | To enhance northbound travel to the Mainland, starting from 26 October 2023, foreign staff of Hong Kong registered companies may apply for multiple-entry visas to the Mainland, which will be valid for two years or more. The application process will also be streamlined and expedited. |
| Top Talent Pass Scheme | With effect from November 2023, the list of eligible universities under the Top Talent Pass Scheme will be expanded to 184 institutions with the addition of top institutions from the Mainland and overseas. |
| Relaxed visa policies for Vietnam, Loas, and Nepal passport holders | Starting from 25 October 2023, the visa policy and criteria for Vietnam passport holders will be relaxed for employment visas or multiple-entry visas for business and travel; the visa policy for Laos and Nepal passport holders will be relaxed for employment, training and study in University Grants Committee-funded institutions in Hong Kong. |
| Capital Investment Entrant Scheme | Persons with investments of no less than HK$30 million in Hong Kong assets such as stocks, funds, bonds, etc. (excluding real estate) can apply for entry into Hong Kong. Details of the scheme will be announced later. |
| Vocational Professionals Admission Scheme | Starting from the 2024/25 admission cohort, non-local students of designated full-time professional Higher Diploma programmes of the Vocational Training Council (VTC) will be allowed to stay in Hong Kong for one year after graduation to seek jobs relevant to their disciplines. This pilot arrangement will be reviewed after two years. |
Update on Employment Tax
The Government has announced plans to review current legislation relating to statutory minimum wage and contractual arrangements as follows:
| Employment Tax Measure | Details |
| Statutory Minimum Wage | The Minimum Wage Commission will submit a report by the end of this month on enhancing the review mechanism for the Statutory Minimum Wage. The Government will carefully consider and follow up on the commission’s recommendations. Within six months, a decision will be made on the future direction of the review mechanism. |
| Continuous Contract Requirement | The Labour Advisory Board (LAB) is currently discussing revisions to the “continuous contract” requirement i.e. commonly referred to as the 418 requirement, which affects employment benefits coverage. The LAB has tentatively agreed to revise the requirement by using the aggregate working hours over a four-week period as the basis of calculation. They are also deliberating on the specific working hour threshold. Once the LAB reaches a consensus, the Government will amend the Employment Ordinance as soon as possible. |
Promoting Fertility and Creating a Pro-childbearing Environment
The Government recognizes the significant issue of low birth rates and is taking measures to address it. In this policy address, several monetary and tax-related initiatives are introduced to encourage childbirth:
It is important to note that further details regarding the eligibility criteria and specific tax implications of these measures will be announced by the Government. Taxpayers should stay informed about the official guidelines and updates to ensure compliance and optimize their tax deductions.
Our Observations
The Government’s determination in attracting and retaining talents is crystal clear. While the above policy measures offer additional pools of talents, employers are advised to keep abreast of the latest immigration rules and ensure that the talents have the proper immigration status to commence employment. In planning foreign talents to come to Hong Kong for work, it is important to consider relevant implications (e.g. individual income tax, immigration, etc.) holistically from both the employer’s and employee’s perspectives. In addition, notwithstanding the facilitation measures for foreigners to travel to the Mainland by way of the “multiple-entry visa,” the purpose of their trips as well as the number of days of presence in the Mainland should be monitored in order to assess relevant risks and ensure regulatory compliance.
Whilst the Government has temporarily enhanced the mechanism for admitting talent and labor, there is a continuous focus on prioritizing local workers for employment opportunities. In this policy address, measures are proposed to improve basic employment conditions. Employers should closely monitor the changes to the statutory minimum wage mechanism and the “418” requirement as it will directly impact employment costs and business operation.
Contact us
For a deeper discussion on the above, please reach out to your Vialto Partners point of contact, or alternatively:
James Clemence
Asia Pacific CEO
james.clemence@vialto.hk
Theresa Chan
Partner
theresa.chan@vialto.hk
Adam Chiu
Partner
adam.chiu@vialto.hk
Louis Lam
Partner
louis.lam@vialto.hk
Bruce Lee
Partner
bruce.lee@vialto.hk
Steven Lim
Partner
steven.lim@vialto.hk
Further information on Vialto Partners can be found here: www.vialtopartners.com