Ten Tips On Employees of Hong Kong SMEs

As a foreigner and a SME owner/founder of a local company in Hong Kong, from time to time you may get involved in hiring local HK people (who are HK permanent residents / citizens with HK ID cards), or foreigners who possess the right experience and skills for the job but are not permanent residents in Hong Kong. Let’s examine a few tips.

Tip 1: In this case, the foreigner employee/staff must apply for employment visa (with your company as a sponsor), before he can work for your SME in HK.

Tip 2: After working for almost for a year with you, his work visa may come close to the expiry date. In this case, he will have to apply for a visa extension from the Hong Kong immigration department.

Maintain a schedule app for your employees, like the Deputy auto scheduling software. This will help you keep a better account of every minute work details including the employees’ credentials.

Tip 3: You must follow the terms of the Employment Ordinance when hiring employees to work in your HK based office.

Tip 4: Normally, an employment contract between your company and your staff is needed. In legal terms, you may use a verbal contract. But for better protection of the rights of both parties, it is always preferred to write/type everything on paper.

Tip 5: Two original copies of the employee contract should be provided and printed. One goes to your employee, and you keep the other copy.

Tip 6: When the foreign employee has plans to take annual leave and go back to his country of origin for holidays, you (as the employer) have a few obligations. At least one month before your employee departs HK, you must submit a form to the Inland Revenue Department (IRD). The objective of this is for IRD to double check if the employee owes any local tax.

Tip 7: When an employee’s main job requires traveling out of Hong Kong very frequently, the above rule should not apply to him anymore.

Tip 8: Usually as agreed upon the employee and employer, employees are paid a salary. The standard HK practice is to pay an employee a monthly salary.

Tip 9: When the employee is also a director i.e. A director who gets paid, you should have a contract between the company and the director for this specific employment. Whether the director has an employee status with your company or not, he is entitled to receive fees i.e. Director’s fees.

Tip 10: Regarding employees’ compensation insurance with smaller companies, it may be difficult to get coverage only on employees’ compensation insurance. It may be wiser to combine it all into a package. A typical package may include employees’ Compensation, third party or public liability, property insurance, damage to the premises, dishonesty and theft by employees, and more.