Employer Of Record in Hong Kong & PEO | Hire Without Entity

Employer of Record in Hong Kong & PEO

Hire Globally, Pay Locally, Expand Effortlessly

INS Global is your ideal local partner for human resources services in Hong Kong. Our PEO solutions can help you get your company started and hire staff in more than 80 countries. Avoid all the extra costs and red tape that usually comes with setting up in a new country by using our human resources solution.  

A PEO in Hong Kong is a company that serves as a local partner for companies who want to get set up in a new country.  A PEO will legally employ the staff on your behalf, meaning you don’t have to set up your own entity in the country.  

A PEO (Professional Employer Organization), often called a global EOR (Employer of Record) can provide companies with a cost-effective, quick, and simplified global mobility and expansion strategy by taking care of essential HR services and offering compliance assurance in unfamiliar markets. INS Global’s PEO in Hong Kong allows companies to hire or transfer employees within 48 hours.

An Employer of Record (EOR) in Hong Kong provides companies with a cost-efficient and secure way to follow global expansion strategies by acting as the employer for oversees workers to simplify tax and compliance assurance responsibilities. For companies looking to boost their global mobility potential, INS Global’s EOR provides the perfect mix of experience and expertise in the international market.

Want to have a Team in Hong Kong TODAY?

Show me how to grow my business now!

We prefer to let others grow their business.

Want to have a Team in Hong Kong TODAY?

Show me how to grow my business now!

We prefer to let others grow their business.

Employer of Record in Hong Kong & PEO

Employer of Record in Hong Kong & PEO - Summary

Why use an Employer of Record or PEO in Hong Kong instead of Company Incorporation

If youre not familiar with the process of incorporating a company in Hong Kong, it may be a complicated process that could end up costing your company time and money. A PEO offers you the same benefits as your own entity would, without going through the process of incorporation. 

How are they different?: 

  1. Having your own entity is high risk compared to using an employment solution
  2. An employment solution can save you time and money by reducing setup time
  3. Using a PEO gives you access to local expertise and local networks 

PEO/EOR vs Company Incorporation

The Advantage in Figures

PEO/EOR Company Incorporation
Price
80% Less Expensive
Market Entry
2-5 Days
6 Months
Employee Turnover
Decrease by 14%
Recommendation
98% of the Current PEO Clients
Administrative Fees
Saves an Average of $450
Costly Payroll and Compliance Fines
Help Avoid
Company Growth Rate
7 - 9%
ROI
27%
Closed During Pandemic
-58%
Employer of record (EOR) Hong Kong

Advantages of using a Hong Kong Employer of Record

Compliance with Hong Kong Regulations 

Company setup and employment laws are constantly changing. To ensure you do not expose your company to any legal liability by not complying with local laws, you need to understand local regulations and processes. 

Reduced Cost And Time

By using an outsourced PEO, the initial or anticipated time for setup is significantly reduced. This allows your company to enter Hong Kong and start operations faster. It also means you save on setup costs and the possible further cost of any delays.  

Greater Focus on Company Growth 

Through providing a full suite of services like outsourced payroll management, recruitment and other HR services, you can focus more on growing your business in Hong Kong and worry less about administration.

Accurate Payroll Management

An important benefit of a PEO in Hong Kong is that they can track and manage the payroll of your employees. The PEO can track hours, report wages, handle taxes and social security, pay employees, and in some instances, make payments to vendors all on your behalf.  

How Does a PEO & Employer of Record in Hong Kong Work?

INS Global’s Hong Kong PEO can help you manage the needs of your project and enter the market faster by taking the following steps: 

  • Discuss the scope of your project, your requirements and develop a plan that best serves your needs.
  • Our organization will then provide you with a legal entity, through which you can employ your staff and begin business operations. 
  • Our organization will then assume the administrative and legal aspects of hiring and paying your employees based in Hong Kong.
  • Your staff will carry out daily operations and work towards your business goals in the local market. At the same time, we manage the human resource aspects. 

Testimonial

Manuel Ramos

TERAO ASIA

Managing Director

We think INS Global is a good solution about starting business in new and complex markets. Understanding the market doesn’t mean you need to set up a company immediately.

5/5

What’s The Difference Between PEO And Employer of Record (EOR)?

Many people may think a PEO and an EOR are the same thing, but there are some differences between the two. An EOR has similar functions to a PEO, because it offers onboarding of local employees, management of employment contracts, payroll processing and management, and tax registration. The difference comes down to the name and the functions. An Employer of Record (EOR) has all of those functions previously mentioned, while a Professional Employment Organization refers to an organization that offers and more. A Global PEO can also offer EOR services, recruitment, payrolling, and tax management services.

  • Payment calculation and processing
  • Arranging payslips
  • Tax calculation and management
  • Withholding social security contributions
  • Regulatory Compliance Assurance

Labor law in Hong Kong  in 2024

Employment Contracts In Hong Kong

Employment contracts can be oral or written, however, a written contract is preferred as it will be easier to prevent any legal disputes that may come up in the future. The contract must also outline if it is a fixedterm contract or parttime contract.

Employers must provide employees with information regarding wages, notice periods, and any additional changes to the conditions of the contract.  

The requirements for terminating employees in Hong Kong are not as strict and complex as it they can be in other places. However, employers must still follow the rules for terminating an employee, or they may be subject to penalization. The rules for termination are specified in the Employment Ordinance (the law that contains the rules that govern the relationship between employers and employees).  Check our article about terminating an employee en HK.

Employers that decide to terminate employees should make sure of the notice period required before they inform the employee of the termination. The employer may be required to make a severance or compensation payment in lieu of notice. 

An employer does not have to provide notice or severance pay if an employee is terminated for specific reasons like misconduct, the employee acts in contravention of the law, the employee commits fraud, or the employee has carried out his duties negligently.  

An employer can also terminate an employee during their probationary period. If it is within the first month of probation, the employer does not need to provide notice. If it is after the first month, the employer must give the employee at least 7 days notice or they should make a payment in lieu of notice.  

Working hours in Hong Kong 

There is no set standard of working hours set out in Hong Kong law. However, there are clear rules which define the requirements for rest days and protection of wages.  

Hong Kong policy lets employers and employees decide a lot of how the employment relationship will work. Most companies follow the market average for deciding such terms.  

With overtime, there are no specific requirements set regarding the time period and payment. However, if an employment contract states that extra wages must be paid for overtime, then an employer is obliged to make payment or may be penalized.  

Check Severance Pay in Hong Kong.

Holidays in Hong Kong 

In Hong Kong law, employees are entitled to 12 statutory holidays every calendar year. The length of time of an employees service cannot make this period any less. Payment cannot be made in lieu of holiday days. 

For payment during holidays, an employee is entitled to an additional day of regular payment (based on the daily average over a year), however they must have been working for more than 3 months with the employer to be entitled to this.  

If an employee is required to work on a statutory holiday, the employer must provide an alternative day of rest within either 60 days before or 60 days after the statutory holiday. The employee must also be given at least 48 hours notice.   

For annual leave, only employees who have been under a continuous contract for more than 12 months, are entitled to such leave. The employee must take annual leave within the following 12 months. The minimum annual leave after a period of 1 year is 7 days, which gets extended by another day for each subsequent year of service up to 14 days.  

Sick leave in Hong Kong 

An employee is entitled to sick leave if they are under a continuous contract, if the employee has accumulated sick days, and if they can provide an appropriate medical certificate to support the leave. 

Paid sick leave is divided into 2 categories – paid sick days can accumulate up to 36 days (category 1) and 84 days (category 2). For category 1, a medical practitioner should issue a medical certificate. If 36 days have been exceeded, then a medical certificate is required, as well as proof the employee was an outpatient, combined with a short record of the treatment provided by the medical practitioner.  

Maternity and Paternity leave Hong Kong 

Female employees under a continuous contract in Hong Kong are eligible for maternity leave, as long as the employment contract started before the commencement of maternity leave. 

Hong Kong law guarantees the female employee 14 weeks of maternity leave.  

Women in Hong Kong are entitled to four-fifths of their average daily wage earned in the previous 12 months. The employee must give advanced notice to the employer to be eligible to receive payment. This is to be paid by the employer, though the employer may be able to apply for reimbursement from the government for the 11th to 14th weeks.

Male employees are entitled to 3 days of paternity leave, specifically for the delivery of the baby. The only requirements are that the employee must be the father, he must be employed under a continuous contract, and he must give enough notice to the employer.

Tax Law in Hong Kong

Hong Kong has favorable tax rates, which is why many international companies have their Asia headquarters there.  

 Hong Kong has 2 modes of tax calculation, the standard tax rate, and the progressive tax rate. The annual taxes of an employee are calculated according to these 2 rates and the employee pays the lesser of the 2 amounts.   

Employer of Record in Hong Kong & PEO

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FAQs

The cost of working with a reputable Hong Kong PEO to handle all significant HR duties, such as payroll, contract administration, and ensuring tax compliance, is determined as a monthly fee based on a percentage of the earnings of the co-employed employees. 

Working with an EOR enables you to transfer personnel or hire in Hong Kong in a practical, safe, and authorized manner. Both short-term and long-term outsourcing can be done legally using this method. 

An employee who is handled by a PEO has access to several advantages, including complete legal protection, local knowledge of all employer obligations, prompt and correct payment, enhanced employee perks, and more. 

Contractors that connect with customers through a PEO or EOR have access to all the same benefits and protections as normal employees while still keeping total control over their work process. 

Yes, a PEO offers you security wherever you go while taking into consideration any and all variations in local or regional employment laws. 

There can be a minimum or maximum number of employees you can recruit with some PEO companies. You may, however, co-employ as many or as few staff members with INS Global as your development plan calls for. 

Payroll costs must account for indirect costs like social insurance contributions, bonuses, or incentives in addition to salaries and any payments made to recruiting firms or specialists. 

Even though signing bonuses are optional, if selected they must be taken into account when calculating recruitment expenses. 

Hong Kong has successfully adjusted to the potential of employee remote work. The choice between a physical workspace and a home office should still be available to employees of a company with a branch in Hong Kong. 

Members of our recruiting team have access to professional networks, in-depth knowledge of offline and online business resources, familiarity with the best practices in the region, and more, to help you locate the best new team members in Hong Kong. 

To help you find the best among both Hong Kong locals and overseas residents, INS Global employs the latest recruitment tools and industry-specific knowledge. We take all differences in local practices and regulations when hiring staff on your behalf to avoid potential complications. 

When looking for a quick, simple, and secure way to enter the Hong Kong market, businesses of all sizes, from SMEs to multinational corporations, should think about hiring a PEO.  

INS Global provides key PEO services to organizations in a wide range of sectors, with our legal knowledge being appropriate for anybody who either lacks their own internal structures or wants to avoid corporate bloat while expanding.  

Independent contractors can be hired directly or through an intermediary, such as a staffing firm or an umbrella company. You might be able to identify the best contractors to fit your needs through networking, job boards, social media, trade groups, and other channels. 

Independent contractors typically work as self-employed freelancers or through their own small businesses, through which they can send invoices to clients. 

A CV, portfolio, references, and sometimes a signed NDA may be requested of an independent contractor. However, recruiting procedures may differ based on your needs. A contractor’s references must be thoroughly checked in order to ensure the quality of service. 

Payroll should be organized every month unless otherwise agreed upon. Each pay period, employees should receive a payslip breaking down payment amounts.  

Hong Kong is uncommon in that companies may choose to forgo managing tax deductions on behalf of their employees. However, to appear as a desirable option for candidates and to improve employee morale, organizing these functions is still recommended.  

Employers must withhold and make social security contributions for their employees based in Hong Kong. 

In 2023, the minimum wage is HK$40 per hour 

Professionals looking to live and work in Hong Kong can pursue visa options based on their particular backgrounds. There are separate channels for mainland Chinese applicants, foreign applicants with degrees from Hong Kong-based institutions, and all other applicants.  

Applicants must seek “Entry for Employment as a Professional” with the immigration department through their hiring company. A full list of the documents and steps required can be found on their website 

Income tax does not have to be withheld at source, and instead, employees can declare tax every year. This may save employers time, but it may not be a good option for foreign employees.  

Social security contributions to the Mandatory Provident Fund (MPF) have to be withheld and made for all employees in Hong Kong, regardless of origin. This consists of an amount equivalent to 5% of the employee’s salary from the employer and the employee. 

Taxes and Provident Fund contributions give employees access to the usual forms of paid leave including sick leave, parental leave, and annual leave.  

Contracts in Hong Kong may include provisions for employers to make changes unilaterally. In this case, employers still have to provide copies of any such changes in writing  

Employees in Hong Kong may choose between public healthcare (typically free or with minimal costs) or private healthcare (paid for through a third-party insurance provider). Employees able to show proof of a private healthcare provider do not have to join the public healthcare system.

Severance pay in Hong Kong depends on the type of contract the employee holds. Depending on the contract being full-time or hourly, severance is calculated as 2/3 of the most recent month’s salary times the number of years served (for full-time) or the equivalent of 18 days salary (note: the days are chosen by the employee out of the last 30) times the number of years of service (hourly). 

The Labor Department oversees most aspects of the Employment Ordinance (the most important piece of HK legislation dealing with employment requirements).  

HK has 12 days of annual public holidays. Employees who have worked for over 3 months are entitled to pay on these days

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