Immigration and Employment Tax
Hong Kong | Policy Address 2024 — Reform to grow
Summary
On October 16, 2024, the Chief Executive (“the CE”) of Hong Kong SAR, Mr. John Lee, delivered the 2024 Hong Kong Policy Address (“the Policy Address”). To consolidate and enhance Hong Kong SAR’s status as an international financial, shipping and trade centre, the Policy Address has introduced specific measures for strengthening our existing business, as well as exploring new growth areas. To support business growth, talent attraction and retention remains a key agenda.
The detail
Trawl for talents
With a projected shortage of talents across different sectors in the next five years, the CE has announced the reformation in respect of various aspects of the talent admission regime.
|
Hong Kong immigration facilitation for talent attraction | ||
| 1. Expanding the Talent List | ||
| Immigration scheme | Current regulation | Facilitation |
|
General Employment Policy (GEP) The Admission Scheme for Mainland Talents and Professionals (ASMTP) Quality Migrant Admission Scheme (QMAS) | Under GEP and ASMTP, employers who seek to fill vacancies falling under the Industry Segments and Occupations on the Talent List are eligible for the exemption from the market availability test.
Under QMAS, eligible applicants who meet the requirements of the Talent List will be awarded 30 bonus points under the General Points Test.
| Updating the Talent List in Q1 2025 to include talents required for development of the “eight centres” for providing impetus for sustaining our competitiveness and economic growth. The eight centres are:
1. International financial centre 2. International innovation and technology centre 3. East-meets-West centre for international cultural exchange 4. International trade centre 5. International shipping centre 6. International aviation hub 7. Centre for international legal and dispute resolution services in the Asia-Pacific region 8. Regional intellectual property trading centre |
| 2. Facilitation under Top Talent Pass Scheme (“TTPS”) | ||
| Immigration scheme | Current regulation | Facilitation |
| Top Talent Pass Scheme | Degree graduates from the top 185 universities listed under TTPS are eligible to apply for Top Talent Pass. Persons admitted under the TTPS will normally be granted an initial stay of two years on time limitation only without other conditions of stay upon entry. | Expanding the list of universities under the Top Talent Pass Scheme to 198 universities by adding 13 top Mainland and overseas universities, and extending the validity period of the first visa of high-income talents (Category A) under the scheme from two years to three years within November 2024. |
| 3. Enhancing the GEP and ASMTP | ||
| Immigration scheme | Current regulation | Facilitation |
| General Employment Policy (GEP)
The Admission Scheme for Mainland Talents and Professionals (ASMTP)
| The two employment-tied schemes of GEP and ASMTP have been the mainstay of our talent admission regime. Employment visas granted under these two schemes are employer specific. Persons admitted under these schemes will normally be granted an initial stay of three years. | Providing new channels in the first half of 2025 to attract young and experienced non-degree specialists in specific skilled trades facing acute manpower shortage to come to Hong Kong with a quota. |
| 4. Introducing new mechanism under QMAS | ||
| Immigration scheme | Current regulation | Facilitation |
| Quality Migrant Admission Scheme (QMAS) | The QMAS seeks to attract highly skilled or talented persons globally to settle in Hong Kong in order to enhance Hong Kong’s international competitiveness. Successful applicants are not required to have secured an offer of local employment before their entry to Hong Kong and may bring their dependants to the city for settlement. | Enhancing the criteria and arrangement of the General Points Test and proactively inviting top-notch talents to apply QMAS visas by Q1 2025. |
| 5. Extending the pilot scheme under the Immigration Arrangements for Non-local Graduates (“IANG”) | ||
| Immigration scheme | Current regulation | Facilitation |
| The Immigration Arrangements for Non-local Graduates (“IANG”)
| Under the current pilot scheme, the coverage of IANG has been expanded to cover graduates from the GBA campuses of Hong Kong universities. | Extending the pilot arrangement of including graduates from the GBA campuses of Hong Kong universities under IANG for two years. |
Other immigration facilitation
|
Other Hong Kong immigration facilitation | ||
| 1. Enhancing the New Capital Investment Entrant Scheme (“New CIES”) | ||
| Immigration scheme | Current regulation | Facilitation |
| New Capital Investment Entrant Scheme (“New CIES”) | An individual demonstrating that he/she has net assets or net equity (excluding residential properties) to which he/she is absolutely and beneficially entitled with a market value of not less than HK$30 million (or equivalent in foreign currencies) throughout the preceding two years is eligible to apply for entry under New CIES. | Effective October 16, 2024, allowing investment in residential properties provided that the transaction price of the residential property concerned is no less than HK$50 million, with the amount of real estate investment to be counted towards the total capital investment capped at $10 million; and
counting investments made through an eligible private company wholly owned by an applicant towards the applicant’s eligible investment with effect from March 1, 2025. |
| 2. Attracting business visitors | ||
| Nationalities of visitors | Facilitation | |
| Nationals of Vietnam, Cambodia, Laos and Myanmar | – Relaxing the criteria for nationals of Vietnam, Cambodia, Laos and Myanmar applying for multiple-entry visas for travel and business;
– Extending the validity period of multiple-entry visas for these countries from two years to three years; – Expediting the processing of visa applications from group visitors of ASEAN countries submitted via local travel agents; and – Providing self-service immigration clearance for invited persons participating in business, development and related activities from the 10 ASEAN countries. | |
Employment tax measures
| Measures | Details |
| Expanding tax concession for funds and single-family offices | The Government will consult the industry on increasing the types of qualifying transactions for tax concession granted to funds and single-family offices to attract more asset management enterprises to establish a presence in Hong Kong. |
| Introducing a new Statutory Minimum Wage review mechanism | A new annual review mechanism for the Statutory Minimum Wage will be implemented, ensuring more frequent assessments of wage levels. |
| Relaxing the “continuous contract” requirement under the Employment Ordinance
| The Employment Ordinance will be amended to relax the threshold for a continuous contract. Currently set at 18 hours per week for four consecutive weeks (72 hours total), the new requirement will be an aggregate of 68 hours over four weeks. This change will allow more employees to access comprehensive employment rights, which employers should be mindful of the change in due course and enrol the eligible employees for employment benefits. |
| Implementing subsidy scheme to tie in with the abolition of offsetting arrangement under the Mandatory Provident Fund (MPF) System | Starting 1 May 2025, employers will no longer be able to use their MPF contributions to offset severance and long service payments. To ease this transition, the government will implement a 25-year subsidy scheme worth over HK$33 billion to help employers manage the additional expenses. Employers should assess the potential impact of this change to the cost of separation and explore the possibility of applying for government subsidies. |
| Implementing Full Portability of the MPF | In addition to the portability of employee’s MPF contribution already in effect, the MPF Authority will develop details to allow employees to transfer accrued benefits from their employer’s mandatory contributions to a scheme of their choice using the eMPF Platform launched in June 2024. |
| Promoting Family-Friendly Employment Practices | Through the Good Employer Charter 2024, the government will encourage employers to adopt family-friendly practices, including flexible work arrangements, to create a more supportive work environment. |
| Encouraging re-employment among middle-aged and elderly persons | Unleashing the productivity of the elderly through retraining, re-employment and other measures. |
Our observation
In light of the current global economic challenges and worldwide territorial competition for talents, the focused facilitation measures proposed in the Policy Address is welcome news to employers of different sectors. With the enhanced immigration facilitation measures, employers can retain and attract overseas talents more effectively and efficiently.
We believe details about the new channels under GEP and ASMTP proposed in the Policy Address for attracting talents from specific sectors will be announced shortly. Employers may stay tuned for any further updates. Vialto will provide updates once available.
Although the validity period of the first visa of high-income talents (Category A) under TTPS will be extended to three years, current TTPS visa holders are still required to apply for visa extension by the current visa expiry dates. Employers should keep track of the visa expiry dates of all the employees holding TTPS visas and ensure timely renewal.
With the facilitation measures for inbound travels, we expect a significant increase in the number of visitors from Mainland China and ASEAN countries. Employers and employees should be mindful of the activities allowable to be conducted during the visitors’ stays in Hong Kong and apply for the appropriate visas to facilitate them to carry out the activities in Hong Kong, where applicable.
Extensive presence in Hong Kong may also trigger tax filing obligations on employers and employees. To avoid any doubts about the visa needs and tax compliance, employers are suggested to have a robust system in place in order to track, review, and approve requests for business travels.
On the employment tax front, it is noteworthy that the direction is to continue attracting funds and family offices to Hong Kong by offering more tax incentives, and improving employment rights on minimum wage, employment benefits, retirement benefit investment choice, family-friendly practices, middle-aged and elderly persons’ re-employment and upskilling.
The measures outlined in the Policy Address will steer Hong Kong toward the right path, fostering a stable environment for growth and development. With these initiatives in place, they will create the foundation for long-term prosperity, enabling both businesses and individuals to thrive in an increasingly competitive and dynamic world.
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
Bruce Lee
Partner, Hong Kong Territory Leader
Adam Chiu
Partner
Louis Lam
Partner
Steven Lim
Partner
Further information on Vialto Partners can be found here: www.vialtopartners.com
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