An Employer of Record (EOR) is a third-party organization that takes on the legal and administrative responsibilities of employing workers on behalf of another company. The EOR handles payroll, benefits, taxes, and compliance with local labor laws, allowing businesses to hire and manage employees in Hong Kong without establishing their legal entity.
Hiring workers from Hong Kong offers several benefits due to the country’s highly skilled labor market, strategic location, and position as one of the world’s largest financial and tech hubs. Hong Kong boasts one of the world’s highest levels of GDP per capita, personal wealth, and citizen literacy (99%) in the Asia-Pacific region. The country is known for its thriving free-market economy, modern business culture, and strong intellectual property protections.
According to recent data, Hong Kong remains an attractive destination for foreign investment and expansion, particularly in finance, technology, and professional services. The city’s business-friendly policies and established legal framework make it an ideal spot for companies looking to build functional remote teams.
To effectively use an Employer of Record in Hong Kong, follow these 6 steps:
- Find talent to hire in Hong Kong
- Compare using an EOR to setting up a legal entity in Hong Kong
- Get the information needed from your talent
- Choose an EOR provider with expertise in Hong Kong
- Communicate your hiring needs to the EOR
- Have the EOR set up the contracts and hiring procedure
An EOR in Hong Kong manages payroll processing, ensures compliance with tax regulations, and administers statutory benefits such as the Mandatory Provident Fund (MPF) contributions and leave entitlements. They also handle the complexities of Hong Kong labor laws, including working hours, overtime pay, and termination procedures.
When hiring remotely in Hong Kong, it’s crucial to consider various labor laws. The country has protective employment regulations, including rules on employment contracts, working hours, and paid time off. Hong Kong mandates a minimum wage, currently set at HKD 40 per hour (as of 2023). Employees are entitled to at least seven days of paid annual leave, which increases with the length of service up to a maximum of 14 days.
The hiring process in Hong Kong typically involves identifying suitable candidates, conducting interviews, and ensuring compliance with local employment laws. Employment contracts should be in writing and include specific details such as job responsibilities, working hours, and compensation. The EOR facilitates this process, ensuring all legal requirements are met and managing the onboarding of new employees.
1. Find talent to hire in Hong Kong
To find talent to hire in Hong Kong, businesses should explore a variety of channels, emphasizing both local and global platforms to maximize reach. LinkedIn remains an essential tool for talent acquisition in Hong Kong, allowing companies to search for active candidates and network with professionals.
Job posting websites like Indeed and Glassdoor and Hong Kong-specific sites such as JobsDB and CTgoodjobs offer avenues for employers to advertise openings. These platforms are popular among Hong Kong job seekers, making them an important part of a comprehensive recruitment strategy.
Specialized recruitment agencies can provide tailored solutions for industries requiring specific expertise, particularly in finance, technology, and professional services. These agencies manage the complexities of sourcing and vetting candidates, significantly easing companies’ hiring processes.
Local job boards and regional networks can be advantageous for businesses hiring within specific industries or for particular roles. Hong Kong’s diverse economy offers diverse talent across various sectors.
2. Compare using an EOR to setting up a legal entity in Hong Kong
When working with employees in Hong Kong, you should consider working with an EOR rather than setting up your legal entity. An Employer of Record offers a quicker, less complex route to hiring local staff, bypassing the need for a formal company presence. This approach suits companies looking to test the Hong Kong market or expand quickly without significant upfront investment.
An EOR manages all local employment laws, taxes, and compliance issues, assuming responsibility for hired employees. This setup allows companies to start operations in days or weeks, compared to the months it might take to establish a legal entity in Hong Kong.
On the other hand, setting up a legal entity in Hong Kong offers greater control and the ability to customize business operations and policies. However, establishing a legal entity involves complex registration processes, significant upfront fees, and a deeper understanding of local laws and tax regulations.
In comparison, using an EOR is generally less expensive. It involves less risk, making it a suitable option for small to medium-sized businesses or those in the initial stages of market exploration. It eliminates the need for a local expert or dedicated legal and tax teams, as the EOR handles these aspects. However, it offers limited flexibility in tailoring employment contracts and benefits to specific company policies.
Comparison Table: EOR vs. Setting Up a Legal Entity in Hong Kong
| Factor | Employer of Record | Setting Up Legal Entity in Hong Kong |
|---|---|---|
| Setup Time | 1-14 days depending on the provider | 1-5 working days |
| Initial Cost | Low (typically only employee costs) | Moderate (HKD 3,920 – 7,590+) |
| Ongoing Cost | Moderate (EOR fees + employee costs) | Variable (operational costs, compliance, etc.) |
| Complexity | Low (EOR handles most administrative tasks) | Moderate (simpler than many other jurisdictions) |
| Control over Operations | Limited (company directs daily work, EOR handles employment) | Full (complete control over all aspects of business) |
| Compliance Management | Handled by EOR (payroll, taxes, MPF) | Company Responsibility (requires local expertise) |
| Scalability | Highly Flexible (easy to add or remove employees) | Flexible (Hong Kong known for business-friendly environment) |
| Local Expertise Required | Minimal (EOR provides guidance) | Moderate (simpler regulations than many countries) |
| Suitable for | Market entry, testing Hong Kong market, hiring small teams | Long-term presence, full operations |
| Risk | Lower (EOR assumes employer liabilities) | Higher (company bears all legal and financial risks) |
| Customization of Employment Terms | Limited (must adhere to EOR’s policies) | Extensive (can create company-specific policies) |
| Handling of MPF | Managed by EOR | Company must handle MPF contributions |
| Termination Process | Simpler (EOR manages most aspects) | More complex (company must handle directly) |
| Intellectual Property Protection | May require additional agreements | Company has direct control over IP protection |
3. Get the information needed from your talent
You’ll need to collect essential personal information and employment details to hire employees in Hong Kong. This typically includes:
- Employee’s full name
- Hong Kong Identity Card number (for residents) or passport details (for foreign nationals)
- Address
- Date of birth
- Bank account details for salary payments
- Comprehensive job description, including title, duties, and place of work
Employment contracts in Hong Kong should be in writing, detailing the contract type, start date, salary, work hours, and other employment conditions. The contract should be in English or Chinese and include all terms and conditions of employment, including benefits and entitlements.
It’s important to note that collecting this data before the employee starts working in Hong Kong is crucial for compliance with local labor laws and regulations, including the Personal Data (Privacy) Ordinance.
4. Choose an EOR provider with expertise in Hong Kong
When choosing an EOR provider to work with in Hong Kong, selecting one with deep expertise in the Hong Kong market and a strong understanding of local labor laws to ensure compliance and smooth business operations is crucial.
Evaluate the provider’s experience managing employee onboarding, payroll, and legal compliance in Hong Kong. Look for a provider with a proven track record of working successfully with companies similar to yours, and check their reputation through client case studies or reviews.
Assess the range of services offered to see if they align with your needs, such as work visa support, employee benefits management, and payroll processing. It is important to choose a provider that offers comprehensive employment services and is flexible enough to adapt to changes in Hong Kong labor laws.
Consider the provider’s technology and platforms, ensuring they offer secure, user-friendly systems with strong data protection measures. Evaluate their pricing models, looking for transparency in fees, whether they charge a fixed monthly fee or a percentage of the employee’s salary, and assess the cost-effectiveness for your business.
Finally, choose an EOR provider that demonstrates a commitment to staying up-to-date with Hong Kong employment laws and can provide proper guidance and support to ensure your business remains compliant while operating in Hong Kong.
What are the best EOR providers to use in Hong Kong
| EOR Provider | Why It’s a Good Fit for Hong Kong |
|---|---|
| Multiplier | – Covers 150+ countries, including Hong Kong – Offers comprehensive benefits management, crucial for attracting talent in Hong Kong’s competitive job market – Provides local HR expertise and compliance support for Hong Kong’s labor laws – Facilitates easy management of Hong Kong’s MPF contributions |
| Remote | – Strong focus on employee experience, important in Hong Kong’s competitive job market – Proprietary IP protection measures, valuable for tech companies in Hong Kong – Comprehensive coverage in 180+ countries, including Hong Kong – Expertise in Hong Kong’s Mandatory Provident Fund (MPF) system |
| Horizons | – Specializes in Hong Kong and mainland China markets – Offers fast onboarding, hiring in as little as 12 hours – Provides employment contracts in both English and Mandarin – Expertise in Hong Kong’s labor laws and benefits management |
| Safeguard Global | – Long-standing experience as an EOR provider – Offers support for Hong Kong’s unique payroll and tax requirements – Provides guidance on cultural norms and hiring best practices in Hong Kong – Handles employee onboarding process in as little as two weeks |
| Deel | – Extensive global coverage, including Hong Kong – Supports payroll in 120+ currencies, including HKD – Offers compliance expertise for Hong Kong’s labor laws and regulations – 24/7 customer support with dedicated account managers |
5. Communicate your hiring needs to the EOR
Communicating your hiring needs to the EOR to ensure the process aligns with company goals and legal requirements is important. Provide a detailed job description, including title, responsibilities, required qualifications, and skills.
Specify the job’s expected start date, location, and whether it’s remote or onsite. Outline the proposed salary, bonuses, commission structures, and other compensation benefits. Clarify the contract length, whether permanent or fixed-term, and detail the working hours, including any flexibility or shift requirements.
Discuss the company culture, growth plans, and how the position fits into future expansion. Specify equipment needs and onboarding procedures. By accurately representing these aspects, the EOR can find the right talent and ensure legal and administrative compliance.
Additionally, communicate any specific requirements related to Hong Kong labor laws, such as the need for contracts in English or Chinese or any industry-specific regulations that may apply to your business.
6. Have the EOR set up the contracts and hiring procedure
Once you have chosen which provider to work with and communicated your hiring needs, the EOR will set up the contracts and hiring procedure, ensuring compliance with local labor laws and employment practices.
The EOR will draft employment contracts that comply with Hong Kong labor laws, including specific terms regarding job details, working hours, and termination procedures. They’ll also manage the necessary documentation for tax, MPF contributions, and payroll setup, adhering to mandatory withholdings and reporting requirements.
The EOR also registers employment with relevant Hong Kong authorities, such as the Inland Revenue Department, to ensure the company is properly licensed and authorized to operate and hire employees in Hong Kong.
They’ll ensure your company complies with local regulations related to working hours, minimum wage, and leave entitlements. Additionally, the EOR administers benefits and handles formal onboarding, including the introduction to company systems and culture.
What help does an EOR provide in Hong Kong’s payroll, taxes, and benefits administration?
The EOR will support all Hong Kong’s payroll, taxes, and benefits administration, ensuring compliance with complex local laws. It calculates and processes employee salaries, withholds the correct tax amounts, and handles MPF contributions.
The EOR manages payslips that reflect mandatory withholdings for income tax and MPF contributions, adhering to Hong Kong regulations. It files monthly and annual tax returns with Hong Kong authorities, including the Inland Revenue Department, and manages other required reporting.
For benefits, the EOR ensures compliance with statutory requirements, such as annual, sick, and maternity/paternity leave. It can also administer additional benefits common in Hong Kong, such as medical insurance and annual bonuses.
The EOR also calculates and pays severance or long-service payments when applicable, ensuring compliance with Hong Kong’s Employment Ordinance.
What labor laws do you need to consider when hiring in Hong Kong?
When hiring in Hong Kong, there are several key labor laws to consider. Hong Kong’s approach to labor laws balances business-friendly policies with worker protections.
| Factor | Details for Hong Kong |
|---|---|
| Primary Employment Law | Employment Ordinance (Cap. 57) |
| Minimum Wage | HKD 40 per hour (as of May 1, 2023) |
| Working Hours | No statutory limit, but at least one rest day every seven days |
| Annual Leave | 7-14 days, depending on years of service |
| Maternity Leave | 14 weeks paid maternity leave |
| Paternity Leave | 5 days paid paternity leave |
| Sick Leave | 2-4 days per month, accumulating up to 120 days |
| Pension Scheme | Mandatory Provident Fund (MPF): 5% contribution from both employer and employee |
| Anti-Discrimination Laws | Prohibits discrimination based on sex, disability, family status, and race |
| Termination Notice | 1-4 weeks, depending on employment contract and length of service |
| Data Protection | Personal Data (Privacy) Ordinance (Cap. 486) |
This table provides a more accurate overview of key employment factors in Hong Kong, based on the current laws and regulations as of 2023. It covers the main aspects of employment law, benefits, and protections that employers and employees should be aware of when operating in Hong Kong.
Employment contracts
Employment contracts in Hong Kong can be oral or written, but it’s best practice to use written contracts. These should specify job details, including position, duties, working hours, salary, and termination conditions. While not legally required, including a probationary period of up to three months is common.
Working hours and paid holidays
Hong Kong does not have statutory standard working hours, but employees are entitled to at least one rest day in every seven days. There are 17 statutory holidays per year.
Employees are entitled to a minimum of 7 days of paid annual leave after their first year of employment, increasing progressively to a maximum of 14 days based on years of service.
Minimum wage
As of 2023, the statutory minimum wage in Hong Kong is HKD 40 per hour.
Termination and severance pay
Notice periods for termination depend on the employment contract and length of service. Severance pay is required for employees who have worked continuously for at least 24 months and are dismissed due to redundancy or lay-off.
How does the hiring process work in Hong Kong?
When hiring staff in Hong Kong, employers typically follow these steps:
- Identify the vacancy and create a job description
- Advertise the position through various channels
- Review applications and shortlist candidates
- Conduct interviews and assessments
- Select the preferred candidate and make a job offer
- Negotiate and finalize the employment contract
- Complete necessary paperwork, including MPF enrollment
- Onboard the new employee
Employers must ensure compliance with Hong Kong’s labor laws and regulations throughout this process, including anti-discrimination legislation and data privacy requirements.
Is Hong Kong a relatively easy country to hire employees remotely through an EOR?
Yes, Hong Kong is generally considered a relatively easy country to hire employees remotely through an Employer of Record. The city’s business-friendly environment, well-established legal system, and international outlook are conducive to remote hiring arrangements.
Hong Kong’s labor laws, while protective of employees, are clear and well-established, making compliance manageable with the help of an experienced EOR. The city’s high level of digital connectivity and familiarity with international business practices facilitates communication for global companies.
However, while hiring through an EOR in Hong Kong is relatively straightforward, employers still need to be mindful of local labor laws and cultural nuances. An experienced EOR can navigate these requirements effectively, ensuring compliance while simplifying the hiring process for foreign companies.
In conclusion, Hong Kong’s combination of a skilled workforce, favorable business environment, and established legal framework makes it a viable option for companies hiring remote employees through an EOR, provided they partner with a knowledgeable and experienced EOR provider.
