Remote employees in Hong Kong are entitled to protections like minimum wage, statutory leave, and MPF, while independent contractors are not.
Employers hiring remotely must comply with Hong Kong laws on contracts, insurance, tax filings, and may need a business registration certificate.
Hong Kong doesn’t offer a digital nomad visa, but remote workers may qualify under the QMAS or GEP schemes.
Clear policies, secure tech systems, and proper onboarding are essential for managing remote teams successfully.
Hiring employees in Hong Kong requires careful attention to legal rules, cultural expectations, and administrative steps. Whether a company is a global organization entering the Hong Kong market or a local business growing its team, it’s important to understand how the hiring process works.
In this guide, we'll explore the various legal and practical considerations before setting up a remote workforce in Hong Kong, along with insights into creating an effective remote work policy for seamlessly managing your employees.
Legal Aspects of Setting Up a Remote Workforce in Hong Kong
Every employee in Hong Kong enjoys several legal rights under Hong Kong laws, which extend to those who are part of a remote workforce. There is also no distinction between employees hired by a non-Hong Kong company and a Hong Kong company.
However, no legal protections are available to independent contractors/freelancers who are remote workers.
Employment Law and Labor Ordinance
Employee Rights and Protections
Key rights and protections available to all employees include:
- Protection from discrimination on any ground, including sex, marital status, disability, and race
- Receiving minimum wages
- Minimum paid holiday entitlement and paid time off for illness or injury for four consecutive days
Continuous employees are also entitled to paid annual leaves, maternity/paternity leave, sickness allowance, rest days, and severance or long service payments. A person must work for 18 or more hours weekly for the same employer for at least four consecutive weeks to qualify as a continuous employee.
Courts have held that even if Hong Kong law doesn't govern the employment contract, employees working in Hong Kong still enjoy employment protections offered by law, and employers cannot bypass compliance obligations. This also applies to remote workers and entitles them to enjoy employee benefits per Hong Kong law and the foreign law applicable to the employer's central office.
Employer Obligations
Key obligations under the Hong Kong Employment Ordinance include:
- Paying minimum wages
- Enrolling employees in the mandatory provident fund scheme and making a contribution
- Maintaining necessary insurance coverage to cover liabilities for work-related injuries, if any
- Providing annual leave, statutory holidays, maternity and paternity leave, sickness allowance, severance, etc.
- Ensuring a safe work environment
- Providing minimum notice of termination or payment in lieu
However, a foreign entity employing remote workers in Hong Kong is unlikely to provide the benefits under the scheme unless it holds a business registration certificate in Hong Kong.
Visas and Work Permits
If an individual is a national or a resident of Hong Kong or has a valid employment visa to work in Hong Kong, they can work remotely from Hong Kong. A person holding a Hong Kong permanent identity card can also freely take up a remote position in Hong Kong and work for foreign entities.
There is no special visa for individuals who are not Hong Kong nationals but want to relocate as digital nomads and take up remote work opportunities in Hong Kong. However, they can apply under the Quality Migrant Admission Scheme or the General Employment Policy.
Under the Quality Migrant Admission Scheme, applicants don't need any offer of local employment before they enter Hong Kong. However, applicants must have a confirmed employment offer if they apply under the General Employment Policy.
Taxation
Both employers and remote workers have tax obligations in Hong Kong:
Employer Tax Obligations
Since Hong Kong follows territorial tax laws, profits arising in or derived from Hong Kong are taxable. Employers with a tax presence in HK must file annual tax returns and the most recent audited financial statement.
Any overseas company that employs persons in Hong Kong to carry on its business as part of its remote workforce may be considered a Hong Kong permanent establishment. A Hong Kong PE is subject to local tax laws, subject to a double taxation agreement.
Every employer in Hong Kong also should notify the Inland Revenue Department about the commencement and cessation of employment of its employees in Hong Kong.
Employee Tax Considerations
A foreign individual who works remotely from Hong Kong is subject to Hong Kong salaries tax, provided their employment income is derived from Hong Kong. This is subject to any double taxation avoidance agreement between Hong Kong and the individual's country of residence.
If an overseas employer employs a foreign national who works remotely from Hong Kong, they will likely be considered non-Hong Kong employees. They only need to pay salaries tax on income directly from services provided in Hong Kong.
Insurance
Corporate insurance is a crucial aspect of maintaining a remote workforce.
Mandatory Insurance Requirements
The Hong Kong Labor Department requires employers to compensate employees for work injuries, occupational diseases, and death.
Employers should purchase and maintain compulsory employee insurance of at least HKD 100 million if they employ up to 200 employees and at least HKD 200 million if they employ more than 200 employees.
Employers cannot provide insurance coverage through salary deductions.
Additional Insurance Options
There is no maximum insurance coverage laid down under Hong Kong law. So employers are free to purchase a higher coverage depending on the job function of the remote worker.
Practical Aspects of Setting Up a Remote Workforce in Hong Kong
When you set up a remote team, it's important to understand the practical aspects that are required.
If you're opting to get a remote business address in Hong Kong or other options, it's critical to understand these aspects beforehand.
Here are some things you should consider:
Establishing a Remote Work Policy
A remote work policy clearly outlines employees' and employers' expectations when work is done remotely.
Hiring a remote workforce without a formal policy can lead to miscommunication and confusion. Here's what you should consider while framing one:
- Scope and Objectives
- Eligibility and Expectations
- Communication Guidelines
- Performance and Accountability
Technology and Infrastructure
Managing a remote workforce is highly dependent on technology. Here are a few things to keep in mind:
- Remote Work Technology Essentials
- Security and Data Protection
- Ensuring Seamless Collaboration
Hiring and Onboarding Remote Employees
How do you know if someone will make an excellent remote employee? They can either be fluent in both English and Chinese, especially if they reside in Hong Kong. The process you follow to make a hiring decision can make all the difference.
- Sourcing Talent
- Interviewing and Selection
- Effective Remote Onboarding Process
What to Include in Employment Contracts in Hong Kong
Employment contracts in Hong Kong help set clear expectations between employers and employees. These agreements must follow local labor laws and outline key terms of employment, from job duties to pay and leave entitlements.
Starting with an Offer Letter
Most hiring processes begin with an offer letter, which includes basic job details like the position, salary, and work hours. While not legally binding, the offer letter sets the stage for the official contract that follows.
The Formal Employment Agreement
The formal contract is a legally binding document. It expands on the offer letter and includes important details such as job duties, salary, benefits, probation terms, work schedule, and termination rules.
Trial Periods for New Employees
Many contracts in Hong Kong include a probation period, usually lasting three to six months. During this time, the employer can evaluate the employee’s performance. Notice periods for ending the contract during probation are often shorter.
Work Hours and Overtime Pay
The standard workweek in Hong Kong is 44 hours, usually across five days. Contracts must clearly list regular work hours. If an employee is expected to work overtime, the extra hours and compensation must be agreed upon in advance.
Pay and Benefits
Contracts must outline how wages and bonuses are calculated, as well as how often employees will be paid. Additional benefits—such as medical insurance, retirement plans, or housing allowances—should also be clearly included in the agreement.
Time Off and Leave Rules
Employees are entitled to leave benefits under Hong Kong law. Contracts should explain how annual leave, sick days, and public holidays work, including how they’re earned and used.
Ending the Contract and Giving Notice
Termination terms explain how the employer or employee can end the agreement. Notice periods may vary depending on the reason for termination and how long the employee has worked for the company.
Protecting Company Information
To protect company interests, contracts often include confidentiality and non-compete clauses. These limit the employee’s ability to share sensitive information or join a competitor for a certain time after leaving.
Resolving Disagreements
Some contracts include a dispute resolution clause. This might involve using mediation or arbitration to settle problems between the employer and employee, instead of going to court.
Following the Law
All contracts must meet the rules set by Hong Kong’s Employment Ordinance, which outlines minimum requirements such as fair wages, working hours, and rest days. Employers must make sure their agreements meet these legal standards.
Final Thoughts
Setting up a remote workforce in Hong Kong offers businesses a valuable opportunity to tap into a skilled and diverse talent pool. However, success depends on a deep understanding of both the legal and operational requirements.
From employment contracts and labor laws to tax rules and visa pathways, businesses must ensure compliance while also creating a supportive and efficient work environment. With the right planning, tools, and policies, companies can build a strong, remote team that thrives in Hong Kong’s dynamic business landscape.
