Currency: Hong Kong Dollar (HKD)
Payroll Frequency: Monthly
Capital: Hong Kong
Fiscal Year: 1 April - 31 March
Employer Taxes: 5.00% + 1500.00 HKD
Central Bank: Hong Kong Monetary Authority (HKMA)
Employee Taxes: 5%
Banking and Payment Regulations
Hong Kong’s banking sector is regulated by the Hong Kong Monetary Authority (HKMA), which ensures a robust financial infrastructure. Payment methods for various authorities include e-Payment, Interbank transfers, and systems like the Faster Payment System (FPS).
Contractor Payments
Payments to contractors in Hong Kong can be made in various currencies, depending on the recipient's bank account setup for foreign currencies. Contractors should check with their banks to understand how foreign currencies are managed.
Know Your Customer (KYC)
KYC procedures in Hong Kong are part of the Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) efforts. The required documentation includes identity verification through documents like the HKID or passports, and proof of address through utility bills or bank statements. Financial institutions use customer due diligence (CDD) measures to mitigate risks and ensure compliance.
Opening a Bank Account
To open a company bank account in Hong Kong, businesses must complete an application, submit various documents, and often attend a physical meeting with the bank. Documents required include a board resolution, business registration certificate, identity proofs, and a business plan. The process can take from a couple of days to several months, depending on the bank’s verification procedures.
Major Banks
International and local banks operating in Hong Kong include HSBC, Bank of China (Hong Kong), Citibank Hong Kong, and Standard Chartered Hong Kong. These banks offer a range of financial services and support for both personal and business banking needs.
Payment Tools
A variety of B2C payment tools are available in Hong Kong, such as Stripe, PayPal, AliPay, WeChat Pay, and Apple Pay. These tools facilitate easy and secure transactions for businesses and consumers.
Cryptocurrency Payments
While employers in Hong Kong can pay employees in cryptocurrency, this practice is not fully regulated. The Inland Revenue Department treats cryptocurrency as taxable income. Employers considering this option should be aware of the legal implications and the potential volatility of cryptocurrency values. It is recommended to review the risks and ensure compliance with Hong Kong laws.
Employers can consider hybrid payment methods, where salaries are paid partly in traditional currency and partly in cryptocurrency. Regular reviews and adherence to compliance standards are advised to manage the complexities of using cryptocurrency for payroll.
Hong Kong is advancing towards electronic KYC (eKYC), with virtual banks enabling rapid customer onboarding through digital platforms. This shift aims to streamline financial processes and enhance the efficiency of the banking sector.
Woodburn Accountants & Advisors is one of China’s most trusted business setup advisory firms.
Woodburn Accountants & Advisors is specialized in inbound investment to China and Hong Kong. We focus on eliminating the complexities of corporate services and compliance administration. We help clients with services ranging from trademark registration and company incorporation to the full outsourcing solution for accounting, tax, and human resource services. Our advisory services can be tailor-made based on the companies’ objectives, goals and needs which vary depending on the stage they are at on their journey.
Talk to an expert
Schedule a 30-mins complimentary, no-obligation call to see how Woodburn can help you. Book a call with our Head of Business Advisory - Kristina Koehler-Coluccia.
Topics we can advise on include:
Company Registration
Cloud Accounting & Financial Reporting
Cloud Payroll Services
Tax & Audit Services
Recruitment
Employer-of-Record
Visa Application
Trademark Registration
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