Working

Overview

Category of employment for Hong Kong residents in the Mainland

In general, there are three types of employment arrangements for Hong Kong residents working in the Mainland:

  1. Hong Kong residents directly employed by the Mainland employers with whom the Mainland employers should enter into employment contracts;
  2. Hong Kong residents who run self employed businesses in the Mainland;
  3. Hong Kong residents assigned by foreign entities or entities incorporated in Taiwan, Hong Kong or Macao to work in the Mainland. In such cases, there is no need for the individual to establish a labour relation with the entity receiving the individual in the Mainland, but the foreign entity which sends the individual shall issue the proof of assignment and sign secondment agreement with the local receiving entity.

For those who have established labour relations with a foreign entity or with an entity in Taiwan, Hong Kong or Macao, and have been assigned to the Mainland for less than three months, they will not be required to apply for a Taiwan, Hong Kong and Macao Expatriates Work Permit (hereinafter referred to as "Work Permit"). For those who have been assigned to the Mainland with an accumulated period exceeding three months within one year, a Work Permit is required as in the case of direct employment.

Things to note for working in the Mainland

Hong Kong residents can seek job opportunities through different channels, for instance, by personal referral, through recruitment website or employment agency.

For Hong Kong residents working in the Mainland, the following points should be taken into consideration:

Application for work permits

The employer who intends to hire or accept assigned Hong Kong residents should apply for a Work Permit for them. Hong Kong residents who fall within the "self-employed" category should apply for a work permit by themselves.

To apply for a work permit for Hong Kong residents, the employer shall submit supporting documents to local human resources and social security authority, including the original physical examination certificate, Home Visit Permit for Hong Kong and Macao residents, labor contract, etc.

Hong Kong residents who run a self employed business in the Mainland should apply for a work permit for themselves. Supporting documents, including Individual Proprietorship Business License, medical health certificate and Home Visit Permit for Hong Kong and Macao residents, should be filed submitted to local human resources and social security authority.

Penalty for failure to comply with work permits requirements

According to the Employment Regulations, if the employer fails to apply for work permits for its Hong Kong employees, the relevant labour and social security authorities shall order it to remedy the situation within a specified time, and a penalty in the amount of RMB 1,000 may be imposed. On the other hand, the labour contract between the employer and Hong Kong employees will also become invalid and the rights and obligations of the two parties will no longer be protected by the law.

In addition, the employer shall cancel work permits after termination, dissolution or expiration of the employment with Hong Kong residents. If the employer fails to do so, the relevant labour and social security authorities shall order it to remedy the situation, and a penalty in the amount of RMB 1,000 may be imposed.

"Employment Agreement" (《就業協議書》) and "Employment Registration Certificate" (《就業報到證》)

In June 2017, the General Office of the Ministry of Education issued the Notice on Fine-tuning the Work on Employment Services for the Current Year Hong Kong, Macao and Taiwan Graduates from Higher Education Institutions in the Mainland (《教育部辦公廳關於做好在內地(祖國大陸)普通高校就讀的港澳台應屆畢業生就業服務工作的通知》), providing employment information services and guidance to Hong Kong and Macao graduates. Those who have intention for employment and who meet the requirements will be issued “Employment Agreement” (《就業協議書》) and “Employment Registration Certificate”(《全國普通高等學校本專科畢業生就業報到證》,《全國畢業研究生就業報到證》), so as to facilitate them to enter the employment market in the Mainland.

Social Securities

According to the Employment Regulations, Mainland employers entering into labour contracts with their Hong Kong, Macao and Taiwan employees should pay social securities in accordance with the Interim Regulations on the Collection and Payment of Social Security Premiums. However, detailed implementation rules may vary from one region to another.

Enrollment in social security may fall into three categories as follows:

  1. Hong Kong residents, who are employed in the Mainland and have entered into labour contracts with an employer, should enroll in the social security (including pension, unemployment insurance, medical insurance, work-related injury insurance and maternity insurance) of the region where the employer is located;
  2. Hong Kong residents, who run a self employed business in the Mainland, should pay social security for their employees, and;
  3. Hong Kong residents who have established employment relations with foreign employers or employers in Hong Kong, Macao and Taiwan and are assigned to the Mainland may not need to enroll in social security if they have not entered into any direct employment contract with employers in the Mainland.

For the first category of Hong Kong residents, as detailed implementation regulations have been in force currently, employers have the discretion to decide whether they would enroll their Hong Kong employees in the social security scheme. Meanwhile, Hong Kong residents / employers should pay close attention to any updates of the relevant regulations and policies to be kept abreast of and comply with the relevant requirement.

Housing benefit

In November 2017, the Ministry of Housing and Urban-Rural Development, the Ministry of Finance, the People's Bank of China, the Hong Kong and Macao Affairs Office of the State Council and the Overseas Chinese Affairs Office of the State Council jointly formulated the Opinions on Issues concerning the Enjoyment of Housing Provident Fund Treatment by Hong Kong, Macao and Taiwan Compatriots Working in the Mainland (hereinafter referred to as "Opinions")(《關於在內地(大陸)就業的港澳台同胞享有住房公積金待遇有關問題的意見》). Housing provident fund centres across the country will issue specific implementation measures according to the Opinions and work out details in line with the prevailing policies and regulations. Under the policy, Hong Kong and Macao compatriots working in the Mainland may contribute to housing provident funds in accordance with the Regulation on the Management of Housing Provident Fund (《住房公積金管理條例》) and relevant policies. The deposit base, deposit ratios and processing procedures, among others, shall be subject to the policy provisions consistent with those for the employees contributing to the funds in the Mainland. Hong Kong and Macao compatriots who have contributed to housing provident funds will enjoy rights to withdraw from their own housing provident funds and apply for individual housing loans similar to those of Mainland employees. Those who relocate to other cities in the Mainland can apply for transfer of housing provident funds. Those who have dissolved or terminated their employment contracts with their employers and return to Hong Kong or Macao may withdraw the balance from their housing provident fund accounts in accordance with the relevant provisions.

For more information on the Opinions mentioned above, please refer to the announcement of the Hong Kong and Macao Affairs Office of the State Council (Chinese Version Only):http://www.hmo.gov.cn/xwzx/zwyw/201712/t20171213_1602.html

Individual Income Tax

Individual Income Tax on salaries

Wages and salaries earned by Hong Kong people from the Mainland should be subject to Individual Income Tax in accordance with the People’s Republic of China Individual Income Tax Law (Order of the President of the People's Republic of China [2011] No. 48) and relevant regulations. Hong Kong people, who have a domicile in the Mainland; or do not have a domicile but have lived in the Mainland for over one year, shall pay Individual Income Tax on the income derived inside and outside the Mainland in accordance with the prevailing tax regulations.

Hong Kong people who sign labour contracts in Hong Kong and the Mainland respectively

According to the Arrangement between the Government of the People's Republic of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income (hereinafter referred to as "PRC-Hong Kong Tax Arrangement"), provided that the Hong Kong people are not employed by a Mainland company, their total period of stay in the Mainland does not exceed 183 days within any 12-month period, and their salaries are not borne or paid by any company or permanent establishment in the Mainland, then their salaries should not be subject to Individual Income Tax in the Mainland.

Firstly, salaries earned by Hong Kong people shall be distinguished as domestic- and foreign-sourced income:

In addition, the Individual Income Tax (IIT) liability shall be determined based on the period of residence in the Mainland (please see the table below):

Period of residence in the Mainland Mainland payment Offshore payment Formula (IIT Payable)
Mainland-sourced income and paid in Mainland Foreign-sourced income and paid in Mainland Mainland-sourced income and paid outside Mainland Foreign-sourced income and paid outside Mainland

Not more than 90/183 days under the relevant DTA*

Taxable Exempt; senior executives subject to IIT pursuant to the Directors’ Fee Article of the relevant DTA (Note 1) Exempt Exempt (Total monthly salary paid inside and outside Mainland x IIT rate - quick deduction) x (Monthly salary paid inside Mainland / Total monthly salary) x (No. of days in the Mainland in the month / No. of days in the month)

More than 90/183 days under the DTA but less than 1 year

Taxable Exempt; senior executives subject to IIT pursuant to the Directors’ Fee Article of the DTA (Note 2) Taxable Exempt (Total monthly salary paid inside and outside Mainland x IIT rate - quick deduction) x (No. of days in Mainland in the month / No. of days in the month)

1 year but less than 5 years

Taxable Taxable Taxable Exempt (Total monthly salary paid inside and outside Mainland x IIT rate - quick deduction) x [1 - (Monthly salary paid outside Mainland / Total monthly salary) x (No. of days outside Mainland in the month / No. of days in the month)]

Over 5 years

Taxable Taxable Taxable Taxable Total monthly salary paid inside and outside Mainland x IIT rate - quick deduction)

DTA refers to the relevant double taxation agreement / arrangement

Note 1: (Total monthly salary paid inside and outside the Mainland x IIT rate - quick deduction) x (No. of days in the Mainland in the month / No. of days in the month)

Note 2: (Total monthly salary paid inside and outside the Mainland x IIT rate - quick deduction) x [1 - (Monthly salary paid outside the Mainland / Total monthly salary) x (No. of days outside the Mainland in the month / No. of days in the month)]

Hong Kong people who are employed directly by the Mainland employer and work in the Mainland only

For Hong Kong people directly employed by the Mainland employers, their salaries are borne by their employers. Based on the source of their salaries, they are subject to Individual Income Tax which will be withheld by their Mainland employers.

Applicable Individual Income Tax rates range from 3% to 45%, which span across seven income bands on a progressive basis. Individual Income Tax on salaries earned by Hong Kong people are calculated on a monthly basis, with a monthly standard deduction in the amount of RMB 4,800. In addition, some non-cash benefits or allowances received by Hong Kong people on a reimbursement basis may be exempt from Individual Income Tax under certain conditions. Such tax-exempt items include housing allowance, meal allowance, laundry expenses, relocation expenses, home leave allowance, language training expenses, and children's education subsidies.

According to the Circular of the State Administration of Taxation on Issues Concerning the Implementation of Several Policies on Individual Income Tax (Guoshuifa [2009] No. 121), Hong Kong people who run a factory in the Mainland and takes up the role of a director as well as performs managerial duties, his / her income and director's fees arising from such duties should also be subject to Individual Income Tax.

For more information about the PRC-Hong Kong Tax Arrangement, please visit the website of the State Administration of Taxation:http://www.chinatax.gov.cn/eng/

Education

Children of Hong Kong residents may choose to receive pre-school, primary, secondary and tertiary education in the Mainland.

Pre-school education

Children of Hong Kong residents may choose to attend a local kindergarten or international schools (schools that cater primarily for children of expatriates or non-Chinese residents) for pre-school education.

Entrance requirements are set by individual schools and are generally published on their official websites. If Hong Kong residents would like to enroll their children in a local kindergarten, they may contact the kindergarten directly. Whether or not the children will be accepted would be subject to the discretion / decision of individual kindergarten. If Hong Kong residents opt to send their children to international schools, the application should be made to individual international school in accordance with their requirements. The schools will have sole discretion on whether or not to accept such application.

For more information on international schools approved by the Ministry of Education, please refer to the relevant website of the Ministry of Education (Chinese Version Only):

Primary and secondary education

Children of Hong Kong residents may choose to attend a local primary or secondary school, or an international school. Parents or guardian of Hong Kong students should familiarize themselves with relevant education systems, admission requirements, application period, and other detailed information before enrolling their children.

A written application should be submitted to the Overseas Chinese Affairs Office of the district or county government in the region where the parents or the guardian live in. After obtaining the required government approval, Hong Kong residents may then contact the school(s) of their choices, and provide documentation as required by the school(s). Discretion rests with individual school to decide whether to admit Hong Kong students based on local regulations on the size of the classes and the circumstances of the students.

If Hong Kong residents choose to send their children to international schools, the application shall be filed directly with the schools in accordance with their requirements. The schools will have the sole discretion on whether or not to accept the applicants. In the event where Hong Kong students are being transferred to these international schools during the school term, they must present their transcripts and participate in entrance examinations organized by the schools. After admission, the relevant schools should report their students' information to the Local Municipal Commission of Education for record.

For more information on international schools approved by the Ministry of Education, please refer to the websites of the Ministry of Education (Chinese Version Only):

Tertiary education

Entrance exam

Hong Kong residents who wish to apply for colleges in the Mainland can sit for an entrance examination organised by the colleges and universities that accept overseas Chinese, Hong Kong, Macao and Taiwan students. Some of the main admission requirements are as follows:

  1. Students must have completed the sixth grade course of a registered Hong Kong secondary school or the third grade course of a Mainland high school or above. Students who are currently taking part in the abovementioned courses must provide supporting documents certified by the relevant schools;
  2. Students must meet specific physical requirements by certain universities or courses (if applicable); and
  3. For Hong Kong students: Hong Kong Permanent Resident Identity Card and Home Visit Permit of Hong Kong and Macao Residents or Non-Permanent Resident Identity Card and Home Visit Permit of Hong Kong and Macao Residents.

As for the examination content and requirement, please refer to the Syllabus of joint entrance exam held by mainland colleges and universities to recruit overseas Chinese, Hong Kong, Macao and Taiwan students formulated by the Ministry of Education.

For more information, please refer to the websites of the Hong Kong Examinations and Assessment Authority or Mainland college enrollment information for Hong Kong, Macao and Taiwan students (Chinese Version Only):

Exempt from Admission Exam

In addition, according to the notice issued by the Ministry of Education with respect to fine-tuning work of enrollment of Hong Kong students without sitting for the entrance examinations in colleges of the Mainland during the year of 2012 (Jiao Gang Ao Tai Han [2011] No. 72), from 2012 onwards, a number of universities and institutions, may recruit Hong Kong students who meet certain requirements / qualifications without the need to sit for the entrance exams. Pursuant to the notice with respect to fine-tuning work of enrollment of Hong Kong students without sitting for the entrance examinations in colleges of the Mainland during the year of 2014 (Jiao Gang Ao Tai Ban [2013] No. 537), Hong Kong students who have sat for the Hong Kong Diploma of Secondary Education Examination can apply for open enrollment in Mainland universities. The admission requirements may vary and prospective students can refer to enrollment brochures of individual universities or postsecondary institutions.

For more detailed information, please refer to the official websites of the Education Bureau of the Government of the Hong Kong Special Administrative Region:

Scholarships

The Ministry of Finance and the Ministry of Education have promulgated the Measures for the Administration of Scholarships for Hong Kong, Macao and Overseas Chinese Students (hereinafter referred to as "Measures") (《港澳及華僑學生獎學金管理辦法》), which have been distributed to the local finance departments, education departments of all provinces, autonomous regions and municipalities and all higher education institutions under the Central Government on setting up special scholarships for Hong Kong, Macao and overseas Chinese students studying in the Mainland. "Grand Prize" scholarship is added for Hong Kong and Macao students by making reference to the scholarship system for local students. The number of scholarships and rates of scholarship awards have been enhanced. For details of the above Measures, please refer to the announcement of the Hong Kong and Macao Affairs Office of the State Council (Chinese Version Only):

Mutual recognition of academic degrees in higher education

Hong Kong and the Mainland have reached an agreement on mutual recognition of higher education credentials and signed a Memorandum of understanding between the Mainland and Hong Kong on Mutual Recognition of Academic Degrees in Higher Education (hereinafter referred to as "Memorandum") on July 11, 2004.

According to the Memorandum, Hong Kong and the Mainland would determine a list of accredited colleges and universities and regularly update the list. Diplomas, including a bachelor's or higher degree certificates awarded by accredited colleges and universities of one party will be recognized by the other. A summary of the main points made in the Memorandum:

  1. Students who have received a bachelor's degree from accredited mainland colleges and universities may apply to study in higher education institutions of Hong Kong for a graduate degree or vocational training.
  2. Students who have received a graduate degree from accredited mainland colleges and universities may apply to study in higher education institution of Hong Kong for a PhD.
  3. Students who have received a bachelor's degree with good grades from accredited Mainland colleges and universities and have successfully completed high-quality papers or research work may apply to study in higher education institution of Hong Kong for a PhD.
  4. Students who have received a bachelor's degree from accredited Hong Kong colleges and universities may apply to study in institutions of higher education in the Mainland for a graduate degree or vocational training.
  5. Students who have received a graduate degree from accredited Hong Kong colleges and universities may apply to study in institutions of higher education in the Mainland for a PhD.
  6. Students who have received a bachelor's degree with good grades from accredited Hong Kong colleges and universities and successfully completed high-quality papers or research work may apply to study in institutions of higher education in the Mainland for a PhD.
  7. Both sides recognize and respect the autonomy or discretion of colleges and universities to recruit students according to their rules and procedures.

For more detailed information of the Memorandum, please refer to the website of the Ministry of Education:
http://www.moe.gov.cn/publicfiles/business/htmlfiles/moe/moe_2792/index.html