n Hong Kong, employment contract can be a permanent one or for a fixed term. In case a period is not specified in the contract, it is deemed to be a contract for one month, renewable from month to month when the employee has worked for the employer for at least 18 hours per week for a continuous period of four weeks.
Written employment contracts are not mandatorily required, although in practice, most contracts are written. English and Chinese both are the official languages in Hong Kong. English
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is widely used by the legal, corporate, professional and financial sectors.
Probationary periods do not face any restrictions in Hong Kong and are common, typically ranging from three to six months. Either party can terminate the contract during the first month of probationary period, notwithstanding what is written in a contract. Employers are not required to provide notice to the employee before ending an employment contract.
Agency workers are not as common in Hong Kong as in certain other countries in Asia, slightly due to the comparative easiness with which employers can terminate employment in Hong Kong.
The Employment Ordinance further divides employees as under contract and employees under a continuous employment contract.
Employees under an employment contract are eligible for basic protection under the EO including restrictions on wage deductions, payment of wages, the granting of statutory holiday, and other benefits.
11.1 DRAFTING THE EMPLOYMENT CONTRACT
Hong Kong employment contract specifies the agreed terms and conditions of employment between the employer and employee. It involves both explicit and implied terms. The contract terms should abide by the minimum requirements under the Employment Ordinance. Employment contracts can be oral or written. In case they are in written form, it is compulsory for all employers to provide employees with a copy of the written
employment contract. The employers should secure their employee’s consent prior to making any changes, alterations or additions to the terms of a contract.
In the free market like Hong Kong, either parties are independent to negotiate on the terms and conditions of employment under the scope of Employment Ordinance and other laws.
11.1.2 DURATION OF EMPLOYMENT CONTRACT
In absence of any express agreement to the contrary, every contract of employment is deemed to be a contract for one month and renewable from month to month when the contract is deemed as “continuous”.
11.2 WORK PERMITS
Hong Kong is an exceptional destination for business as well as professionals to live and work in another country. Hong Kong has no bar on the number of people who can live and work in Hong Kong as a skilled migrant, unlike some other countries. Work permit issued to skilled foreign professionals falls under the Employment for Professionals scheme.
Hong Kong provides different classes of visa for employment and investment, some of which are as Visas under:
• The General Employment Policy (GEP);
• The Admission Scheme for Mainland Talents and Professionals (ASMTP);
• Immigration Arrangements for Non-Local Graduates (IANG);
• Admission Scheme for the Second Generation of Chinese Hong Kong Permanent Residents; and
• Capital Investment Entrant Scheme (CIES).
The permits are granted to individuals based on the analysis of qualifications and specific skills set that are not possessed by the Hong Kong local citizens also there is no limit to the number of visas. A work visa will not be an issue for a highly qualified skilled professional considering the country has a shortage of such specific skills.
11.2.1 ELIGIBILITY REQUIREMENTS FOR WORK PERMIT UNDER THE GENERAL EMPLOYMENT POLICY:
Most workers will fall under General Employment Policy (GEP) or Technology Talent Admission Scheme and has to undergo following eligibility criteria:
• It is to be proved that the applicant has a skill that are not readily available in Hong Kong.
• An individual should have secured an employment offer from the company before the visa application is submitted;
• Individual should possess exceptional educational background with a relevant degree, excellent technical qualifications, notable achievements and experience in the chosen field of work.
• An individual should be placed in a management level job position and the salary should not be more than the standards set by local professionals (minimum 20,000 HKD).
• Documentation as to clean criminal record.
• The sponsoring company must be financially stable.
• In addition, sufficient proof confirming that the employee will contribute positively towards improving Hong Kong's economy.
11.2.2 DURATION OF VISA
Under a GEP visa an extension of two years is granted for the first time. While extending for the second time visa will be valid for an additional two years further for the third time it will be valid for a period of three years.
11.2.3 INVESTMENT VISA
This visa is geared toward those looking to open a business or start investment in Hong Kong.
Applicants must submit a detailed two-year business plan and have enough capital to keep the business afloat for the first six months.
Investment visas expire after two years, but holders can apply for an additional two years, then another three years.
Businessmen can also attain this visa as part of the Capital Investment Entrant Scheme, where they invest HKD 10 million in Hong Kong to gain residency in the city. As part of an October 2010 change to the scheme, investments in real estate are exempt from the HKD 10 million, which was also raised from the previous threshold of HKD 6.5 million. But other investments that qualify include equities, debt securities, certificates of deposits and subordinated debt. The government doesn’t cap the number of investment visas it gives out a year.
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To be eligible for this visa, applicants are required to show the following:
• No criminal records;
• A good education background;
• A viable business plan in place, including business turnover, financial resources, etc.
12. BANKING
ong Kong holds one of the largest representations of international banks around the globe with extensive, historical existence of multinational banks and other financial institutions. Around 71 of the world's 100 largest banks are present in Hong Kong. In terms of the volume of external transactions, Hong Kong is the world's 9th largest international banking center. Hong Kong's banking sector being highly open is one of the crucial components of its financial system. Its Asia’s leading financial center and the second largest in Asia in volume of transactions. Hong Kong has a large concentration of international and domestic banks with more than half of the most important financial institutions of the world.
The banking sector plays a significant part in making Hong Kong as a chief loan syndication hub in the region. It also contributes to Hong Kong's status as the world's 7th largest foreign exchange center.
As of Year, 2020, there were 164 licensed banks (31 of which were incorporated in Hong Kong), 17 restricted license banks (12 incorporated in Hong Kong) and 13 deposit-taking companies (all
incorporated in Hong Kong) in operation. These 194 authorized institutions function a wide- ranging network of more than 1,300 local branches. In addition, there were 42 local representative offices of overseas banks in Hong Kong. The success of the Hong Kong's banking and financial services economy is mainly due to its non-discriminatory low tax regime.
Anyone starting a banking/Credit business in Hong Kong need to obtain a license from HKMA.
In Hong Kong there is three-tier banking and deposit–taking system. They are divided on the basis of the nature of business, term of deposits and amount accepted.
12.1 LICENSED BANKS – includes institutions:
• Operating current and saving accounts;
• Accepting deposit of any size and maturity from the public;
• Paying or collecting cheque drawn by or paid in by customers; and
• Using the name bank without restriction.
12.2 RESTRICTED LICENSE BANKS
• These organizations are basically involved in merchants and capital market activities.
• They can take deposits of any maturity of HKD 500,000 and above.
12.3 DEPOSIT TAKING COMPANIES
These companies are mostly owned by, or associated with banks or the engage in a range of specialized activities, which includes consumer finance, commercial lending and securities business.
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Institutions not qualifying under a full banking license may apply for the restricted type. The system facilitates the presence of a higher number of banking institutions and service providers. Investors can enter the deposit-taking sector and register a company that will provide various services as well as conduct investment banking activities in Hong Kong.
All companies operating in the sector should have a certain amount of liquidity and capital at all times and must submit returns to HKMA. The Banking Ordinance regulates the banking sector and each company must comply with the requirements under the Ordinance.
Most banking service providers are licensed banks. Hong Kong’s stock market is one of the top three stock markets in Asia. The two significant elements that have contributed to the quality of the market are its financial regulatory system which is modern and allows for a high degree of transparency and supervision. Hong Kong is also an offshore Renminbi center.