hong kong - dla piper

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Establishing a businEss in

hong Kong

02 | Establishing a Business in Hong Kong

a. businEss REgistRation of a hong Kong REpREsEntativE officE by a company incoRpoRatEd outsidE hong Kong

A representative office is a suitable structure for a non-Hong Kong company wanting to establish an office in Hong Kong for the purpose of liaising with customers and potential customers in Hong Kong, whilst at the same time maintaining the company’s core business in another jurisdiction.

1. Business Registration

To set up a representative office in Hong Kong, the company must apply for a Business Registration Certificate at the Business Registration Office. A copy of the non-Hong Kong company’s Certificate of Incorporation or equivalent document needs to be submitted to the Business Registration Office together with a prescribed form for registration.

The company may elect to apply for a Business Registration Certificate which is either valid for one year or for three years. Currently, a one year Business Registration Certificate for a Hong Kong representative office will cost HK$250 and for three years will cost HK$3,950. The Government of the HKSAR may change the business registration fee and levy from time to time. The Business Registration Certificate will be issued on submission of the necessary document(s) together with payment of the relevant fee. DLA Piper can prepare this application on behalf of your company.

2. Continuing Obligations

No trading activities or business transactions can be carried out through a representative office. Therefore, the continuing obligations of a representative office are limited only to the renewal of the Business Registration Certificate and the payment of the business registration fee.

3. Taxation

Hong Kong adopts a territorial principle of taxation, therefore only profits arising in or derived from Hong Kong are subject to Hong Kong Profits Tax. Profits sourced elsewhere are not subject to Hong Kong Profits Tax. The Corporate Profits Tax rate for the year of assessment 2012 – 2013 is scheduled at 16.5%.

b. REgistRation of a bRanch officE in hong Kong

A company which is incorporated outside Hong Kong may conduct business and hold land in Hong Kong by establishing a “place of business” in Hong Kong. The Hong Kong Companies Ordinance, Chapter 32 (“Companies Ordinance”) defines “place of business” to include a share transfer or share registration office, but a “local representative office” established or maintained with the

options foR Establishing a businEss in hong Kong There are three primary methods of establishing business operations in Hong Kong, namely:

a) Business registration of a Hong Kong representative office by a company incorporated outside Hong Kong;

b) Registration of a Hong Kong branch by a company incorporated outside Hong Kong; and

c) Incorporation of a Hong Kong company or acquisition of a ready-made shelf company.

The following pages summarise the different characteristics, registration and maintenance requirements of these three forms of establishing business operations in Hong Kong.


approval of the Monetary Authority as defined in the Ordinance is not included.

1. One-Stop Company and Business Registration of the Companies Registry

1.1 Registration is effected in compliance with Section 333 of Part XI of the Companies Ordinance. Registration is required to take place within one month of the establishment of a place of business in Hong Kong. The non-Hong Kong company is required to submit the following documents to the Companies Registry for registration together with a registration fee:

1.1.1 a specified form containing the following information in respect to the non-Hong Kong company:

■ name of the company;

■ place of incorporation of the company;

■ date of establishment of the place of business in Hong Kong;

■ personal particulars of each director, secretary and any joint secretaries;

■ personal particulars of at least one person resident in Hong Kong or a firm of solicitors or certified public accountants (practising) who are authorised to accept service of process and notices on behalf of the

company; and

■ address of the principal place of business of the company in Hong Kong and the respective addresses of the principal place of business elsewhere (if any) and the registered office (or its equivalent) of the non-Hong Kong company in the place of its incorporation.

1.1.2 A certified copy of the charter, statutes, by-laws, memorandum and articles of the company or other instrument defining the constitution of the company or, where the instrument is in a language other than English or Chinese, a certified translation of the instrument in English or Chinese.

1.1.3 A certified copy of the Certificate of Incorporation of the company, or such other

evidence of incorporation as the Registrar deems sufficient, together with a certified English or Chinese translation, if the certificate or document is in a language other than English or Chinese.

1.1.4 A certified copy of the latest published accounts of the company, where the law of the place of incorporation or any other jurisdictions where the company is registered, or the rules of any stock exchange or similar regulatory bodies applicable to the company requires the company to publish its accounts or to deliver copies of its accounts.


If the required accounts are in a language other than English or Chinese, the company shall deliver to the Registrar a certified translation of the accounts in English or Chinese instead of the certified copy of the accounts in the original language.

When neither the laws of the place of incorporation of the company, or the laws of any other jurisdictions where the company is registered as a company, or the rules of the stock exchange or similar regulatory bodies in any of those jurisdictions impose the requirement to publish accounts referred to in the paragraphs above, a statement in the specified form confirming this should be submitted to the Registrar.

If the non-Hong Kong company is required to publish accounts, but has been incorporated for less than 18 months prior to registration and the accounts have not been made up, a statement to this effect in the specified form should be delivered to

the Registrar for registration instead of the certified copy of the latest published accounts.

1.2 A Non-Hong Kong company is required to obtain and maintain a business Registration Certificate. With the implementation of the one-stop company and business registration service, a Notice to Business Registration Office in the prescribed form must be submitted together with the documents under 1.1 to the Companies Registry. The prescribed business registration fee and levy stated under section A, paragraph 1 must also be paid at the time of submission.

Upon satisfaction of all the registration requirements, the Companies Registrar will issue a certificate of registration and the Business Registration Certificate. This usually takes at least 14 working days after the submission of all requisite documents in acceptable form to the Registrar.

1.3 “Certified” in the paragraphs above means certified as a true copy in the manner below:

1.3.1 if certified in the jurisdiction of incorporation of the company, by:

(a) an official of the local government, to whose custody the original is committed;

(b) a notary public, lawyer, professional accountant, professional company secretary practising in that jurisdiction; or

(c) an officer of a court of law duly authorised by the laws of that jurisdiction to certify documents for any judicial or other legal purpose;

1.3.2 if certified in Hong Kong, by:

(a) a notary public, solicitor, certified public accountant or professional company secretary practising in Hong Kong;

(b) an officer of the court in Hong Kong who is authorised by law to certify documents for any judicial or other legal purpose; or

(c) a consular officer of the jurisdiction in which the company was incorporated;

1.3.3 by an officer of the company; or

1.3.4 by the authorised representative of the company.


1.4 “Certified translation” referred to above means a translation certified by the person making the translation to be a correct translation provided that the person making the translation is believed to be a person who is competent to translate a document into English or Chinese by, and is so certified by, one of the following persons:

(a) if the translation is made outside Hong Kong, by:

a. a notary public, lawyer, professional accountant, professional company secretary practising in that jurisdiction;

b. an officer of a court of law duly authorised by the law of that jurisdiction to certify documents for any judicial or other legal purpose;

c. a consular officer in that jurisdiction; or

d. any other person specified by the Hong Kong Registrar of Companies; or

(b) if the translation is made in Hong Kong, by:

a. a notary public, solicitor, certified public accountant, professional company secretary practising in Hong Kong; or

b. a consular officer in Hong Kong.

1.5 If the Registrar considers that the name of the non-Hong Kong company is the same as, or is very similar to, a name already appearing in the Registrar’s index of company names on the date on which the non-Hong Kong company was registered in Hong Kong, or gives such a misleading indication of the nature of its activities in Hong Kong that it is likely to cause harm to the public, the Registrar may, within six months of the date on which the company is registered (or changes its name), serve a notice to that effect on the company.

Within two months of the service of such a notice, the company must cease carrying on business in Hong Kong under the forbidden corporate name.

A company that receives such a notice from the Registrar may however choose to carry on business in Hong Kong under a name other than its corporate name. This “trading name” will however still need to be approved by the Registrar. The application should be made by way of a statement delivered to the Registrar under section 337B(3) of the Companies Ordinance, specifying the Registrar approved trading name that the company wishes to use. Similarly, this trading name can be changed to another name approved by the Registrar by submission of a further statement under section 337B.

Failure to comply with a notice served on the company in respect of its name may lead to the company and/or its officers being prosecuted. The maximum penalty for failure to comply is at present a fine of $100,000 and imprisonment of 6 months, as well as a daily default fine of $700 for continued default. It is therefore important to ascertain if there is any registered name similar to the company’s name prior to applying for registration.

2. Continuing Obligations under the Companies Ordinance

2.1 Annual Return – All non-Hong Kong companies registered under Part XI of the Companies Ordinance are required to file an annual return to the Registrar once a year. The annual return should be made up to the anniversary date of the registration of the company in Hong Kong and filed with the Registrar within 42 days of that date, together with the filing fee.

A certified true copy of the latest published accounts should accompany the annual return, except in the circumstance described in paragraph 1.1.4 of this section B.


The filing fee for the annual return if delivered within 42 days of the relevant date is HK$180. If filed after 42 days, the filing fee will rise incrementally to a maximum of HK$4,800 and the company and the officers may be prosecuted for non-compliance with the Companies Ordinance. The maximum penalty on prosecution is HK$50,000 for each breach and a daily default fine of HK$700.

2.2 Renewal of the Business Registration Certificate – The company must maintain a valid Business Registration Certificate. A business registration renewal demand note will be sent by the Business Registration Office approximately one month before the current Business Registration Certificate expires. Upon payment, the demand note will become a valid Business Registration Certificate. If a company does not receive such a demand note, it should inform the Business Registration Office in writing within 1 month of the expiry of its current Business Registration Certificate.

2.3 Change in registered particulars – The Registrar must be notified of any change in the company’s registered particulars, such as change of directors, officers, address,

company name, or amendment to the company’s constitution. A prescribed form is required to be filed with the Registrar within one month of the date of the change, sometimes together with supporting documents.

2.4 Publicity – The name of the company, the place of its incorporation and if the liability of the members of the company is limited, the fact that it is a limited company must be stated at its place of business and specified on the company’s letterhead, invoices, notices or any official publications in Hong Kong.

2.5 Retention of an authorised representative after ceasing business – When a non-Hong Kong company ceases to have a place of business in Hong Kong, it must notify the Registrar in a prescribed from within 7 days after the date of cessation. The company’s reporting obligations cease immediately, but it is obliged to retain on the Register for one year following cessation of the business in Hong Kong the name and address of a Hong Kong resident who is an authorized representative to accept service on the company’s behalf, as notified to the Registrar, see paragraph 1.1.1 of this section B. (There is also a procedure by which the named

representative may be changed during this period.)

2.6 Liquidation – In the event of the liquidation of the company in the place of its incorporation, notice in the prescribed form of commencement of such liquidation and the appointment of a liquidator needs to be delivered to the Companies Registrar in Hong Kong within 14 days.

2.7 Dissolution – When the Registrar is informed that a company has been dissolved in the place of its incorporation, he will remove the name of the company from the Hong Kong register. A specified form together with a certified copy of the instrument effecting the dissolution should be filed with the Registrar within 14 days of the date of dissolution.

2.8 Penalties for non-compliance – If a non-Hong Kong company fails to comply with any of the provisions above, the company and every officer of the company are liable to prosecution and, if convicted, default fines. The maximum penalty on prosecution is HK$50,000 for each breach, together with a daily default fine of HK$700.

3. Taxation

Hong Kong adopts a territorial source principle of taxation. Please see paragraph 3 of section A above.


There are provisions in the Inland Revenue Rules for apportionment of the worldwide income of a foreign company for local tax assessment purposes, where specific identification of local income is not made.

4. Exchange Controls

There are no exchange controls or other governmental restrictions in effect in Hong Kong to control the flow of funds into and out of Hong Kong in any currency.

c. incoRpoRation of a hong Kong company

1. Incorporation

Companies incorporated in Hong Kong can be public or private and can be limited by shares or by guarantee. Most of the companies in Hong Kong are private companies limited by shares. The liability of the members (i.e. “shareholders”) of these companies is limited to their initial investment in acquiring or subscribing for shares in the company, including any premium paid for the shares. The information below focuses on private companies limited by shares, as this is the most common form of company. However, we would be pleased to discuss any other form of company you are interested in incorporating in Hong Kong.

To incorporate a private limited company in Hong Kong it is necessary to submit to the Companies

Registry, a copy of memorandum and articles of association for the new company (i.e. the constitution of the company) duly subscribed (signed and witnessed) by at least one founder member of the company and a specified incorporation form together with payment of the incorporation fee. The current incorporation fee is HK$1,720.

With the implementation of the one-stop company and business registration service, a Notice to Business Registration Office in the prescribed form must be submitted at the time when an application for incorporation of a local company is made to the Companies Registry.

The prescribed business registration fee and levy must also be submitted together with the Notice to Business Registration Office. Please note that the current fee is HK$250 for a one year Business Registration Certificate and HK$3,950 for a three

year certificate. The Government of the HKSAR may change the business registration fee and levy from time to time.

The time required for the issue of a Certificate of Incorporation and the Business Registration Certificate by the Companies Registry is approximately 5 working days from the date of submission of all the necessary documents to the Companies Registry.

2. Company name

A company may be incorporated with either an English name or a Chinese name or both. For limited liability Company the English company name must end with the word “Limited” and a Chinese company name must end with the characters “有限公司”, except where the company has applied for omission of these words in accordance with the Companies Ordinance.


Prior to the incorporation of the company, the proposed name of the company should be checked against the names on the Register of the Companies Registry to ensure that the name is not the same as an existing company’s name. Names cannot be reserved prior to the incorporation of a company.

The Registrar of Companies has the power to refuse to register any company name or to direct that a company change its name within 12 months of its application for registration, if in the Registrar’s opinion the proposed name is identical or too similar to a name previously registered.

3. Share Capital

The company’s authorised share capital must be stated in the memorandum of association of the company. The authorised share capital represents the maximum

amount of share capital that the company can issue. There is no minimum share capital requirement in the Companies Ordinance. The authorised share capital can be increased by a resolution of the shareholder(s).

Shares of the company can be divided into different classes with different class rights and into any currency. Please note however that bearer shares are not allowed in Hong Kong.

4. Continuing Obligations

4.1 Shareholder(s) – A Hong Kong company must have at least one shareholder. The shareholder can be an individual or any legal entity. There is no requirement that a shareholder be resident in Hong Kong.

4.2 Director(s) – A Hong Kong company must have at least one director who need not be

resident in Hong Kong. Any individual who has attained the age of 18 years old, subject to certain exceptions, can be appointed as a director. A corporate entity can be appointed as a director of a private company except where the private company is a member of a group of companies of which a listed company is a member.

Where a private company has only one shareholder and that shareholder is also the sole director of the company, the company may in general meeting nominate a person (other than a body corporate) who has attained the age of 18 years as a reserve director to act in place of the sole director in the event of his death.

4.3 Company Secretary – A company must have a company secretary who is resident in Hong Kong. Both individual and corporate secretaries are permitted. If the company has a sole director, the sole director cannot also be the secretary of the company. We can provide our service company as the corporate secretary of the company in order to comply with this requirement.


4.4 Registered Office – A company must have a registered office in Hong Kong where court documents and other official notices may be served. We can provide a service whereby our office address is the registered office of the company, if requested.

4.5 Annual General Meeting – The first annual general meeting must be held within 18 months from the date of incorporation of the company and then held every calendar year with intervals of not more than 15 months from the last annual general meeting. The ordinary businesses of an annual general meeting includes adoption of audited accounts, directors’ and auditors’ reports, the declaration of a final dividend, election of directors in place of those retiring, appointment of auditors and fixing the auditors’ remuneration.

4.6 Annual Return – Please see paragraph 2.1 of section B above.

The filing fee for the annual return if delivered within 42 days of the anniversary date of incorporation is HK$105. If filed after 42 days, the filing fee will rise incrementally to a maximum of HK$3,480. It is not necessary for a private limited company to submit its accounts to the Registrar.

4.7 Renewal of the Business Registration Certificate – Please see paragraph 2.2 of section B above.

4.8 Custody of Statutory books – Every company is required to keep a set of statutory books comprising minute books, registers of directors, secretaries, members, transfers and charges in Hong Kong. These should be kept at the registered office of the company. A notice in the specified form must be filed with the Registrar if the statutory books are kept in a location other than the registered office of the company.

4.9 Accounts and Auditors – A Hong Kong company must keep proper books of accounts, which should be audited annually by Hong Kong registered auditors and laid before the annual general meeting of the company.

4.10 Filing obligations – The company is obliged to report to the Companies Registry any change in particulars of the company and its officers, amendments to its memorandum and articles of association, changes in share capital, etc. Certain changes are required to be reported on particular forms designated by the Companies Registry and within a prescribed timeframe. Failing to comply with the filing obligations may

result in the company or its officers being prosecuted by the Registrar of Companies and becoming subject to default fines.

5. Taxation

Hong Kong adopts a territorial source principle of taxation. Please see paragraph 3 of section A above.

The Inland Revenue Department will normally issue a profits tax return to all Hong Kong companies on the 1st of April every year. However, a company’s first profits tax return will normally be issued around 18 months from its date of incorporation.

6. Exchange Controls

There are no exchange controls or other governmental restrictions in effect in Hong Kong to control the inflow and outflow of funds in any currency.

7. Acquisition of a Ready-made Shelf Hong Kong Company

If there is an urgent need for a Hong Kong company that is ready to function immediately, we can provide you with a ready-made company which has had no prior transactions. Such a “shelf” company usually has an authorized share capital of HK$1,000 divided into 100 shares of HK$10 each. Director(s) can be appointed immediately after the acquisition of the “shelf” company and the legal title of the founder member’s share can be transferred within a few days. The name of the company and the articles of association may be changed after the acquisition if required.


licEnsing/authoRisationsDepending on the type of business you wish to conduct in Hong Kong, you or your company may need to obtain certain regulatory approvals, licenses, authorisations and/or permits. If you require our assistance in relation to identifying the relevant authorisations that you need, please let us know and we will refer you to the relevant lawyers with the applicable expertise. Such advice will be provided in accordance with such terms as are subsequently agreed by you with us. Such advice is not provided by us as part of the incorporation and establishment services set out in this guide.

For your further information, the following website also provides useful information in relation to licences in Hong Kong:

https://www.success.tid.gov.hk/tid/eng/blics/index.jsp

hiRing, managing and tERmination of staff

hiRing

For many employers, the key to having a productive and high-performing workforce is recruiting the right people to start with. However, it is important for employers to be aware that even before an employee commences work, there are a number of legal issues which arise in the process of seeking, interviewing and selecting candidates for a position.

Job advertisements and interviews

Employers are prohibited from making discriminatory statements on prohibited grounds (which include sex, marital status, pregnancy, family status, disability and race) in recruitment advertisements. When shortlisting or selecting candidates, employers should ensure that any decision is based on consistent selection criteria which are not discriminatory. Employers must also comply with the provisions of the Personal Data (Privacy) Ordinance when advertising or interviewing candidates. Applicants should be informed of the collection, use and storage of their personal data. An employer may only collect personal data which is necessary and not excessive for the lawful purpose for which it is being collected (for example, information on work experience, job skills, competencies, academic or professional qualifications and good character).

Making an offer of employment

An offer of employment need not be in writing. A verbal offer is still an offer for the purposes of forming a binding contract, once accepted by the employee. An employer is required under the Employment Ordinance to provide a prospective employee prior to commencement of employment with information regarding wages and wage period; any end of year payment; and the length of notice required to terminate the employment.

Existing restrictions

An employer should ensure that the prospective employee does not have any restrictions which may prevent him or her from entering into the employment contract (for example, post-employment restrictive covenants imposed by his/her former employer).

Employment contract

In concluding the employment contract, an employer should be aware of the minimum statutory terms and conditions set out in the various employment-related legislation. The basic terms usually include the term, position, duties, probationary period (if any), remuneration (including any bonus), other benefits, annual leave, sick leave, mandatory provident fund, notice of termination (including a garden leave clause), the right to summarily dismiss, protection of confidential information and intellectual property, post termination restrictions (if any), governing law and jurisdiction and a data collection statement. Significantly, any contract for a duration in excess of one month must be evidenced in writing and signed by both parties; otherwise the contract will be treated as being for one month renewable from month to month and any notice period in excess of a month will be unenforceable.


Immigration

All employees in Hong Kong must hold an appropriate work visa if they do not have a right of abode or the right to land in Hong Kong. A local sponsor is required and it is generally necessary to show that no local person is capable of filling the applicant’s position. A person is not permitted to work in Hong Kong with a work visa pending so employers should ensure that the application is submitted six to eight weeks before the employee’s commencement date.

managing

A wide range of matters arise during the employment relationship, which require careful management in order to ensure that a positive ongoing relationship is maintained, and that there is compliance with relevant legal obligations. It is important to note that the Employment Ordinance imposes criminal liability on employers (and sometimes directors and even managers) for a variety of offences under the Employment Ordinance. As a result, a failure to comply with some of the employment – related obligations can result in fines and imprisonment.

Continuous Employment

Many statutory benefits and protections are only available to employees who are continuously employed. Continuous employment means that the employee has been employed for at least 18 hours a week, for at least four consecutive weeks.

Benefits and Entitlements

Annual Leave – Anyone employed under a continuous employment contract for a minimum period of 12 months is entitled to paid annual leave. The period of paid annual leave is calculated on a sliding scale from seven days (for those employees who have worked for more than one year but not less than three years) up to 14 days (for employees with at least nine years’ continuous employment).

Statutory Holidays – There are currently 12 statutory holidays recognized in Hong Kong. All employees with at least three months’ continuous employment should be granted paid statutory holidays (and given a substituted or alternative day where required to work on such a day). Sundays and a list of specified days are designated as ‘general holidays’ which must be observed by all banks, educational establishments, public offices and government

departments and can be adopted voluntarily by other employers in addition to the statutory holidays.

Sick Leave – The Employment Ordinance states that employees who are continuously employed are entitled to accrue sick leave allowance at the rate of two paid sick days each month in the first year of employment, and four paid sick leave days each month thereafter, with a maximum accumulation of 120 days. These accrued sick leave days are paid at the rate of four-fifths of the employee’s average daily wages. However, payment is only due for the sick leave days when the employee is off sick for four consecutive days or more.

Rest Days – Employees who are continuously employed are entitled to a minimum of one rest day within every period of seven days. Rest days are required to be a continuous period of at least 24 hours without work and are in addition to statutory annual leave and statutory holidays.


The Employment Ordinance is silent as to whether rest days should be paid or unpaid.

Maternity Leave – Employees who are continuously employed are entitled to a period of 10 weeks’ maternity leave. If the employee’s period of continuous employment is more than 40 weeks before the start of her maternity leave, then this period will be paid at a rate of four-fifths of the employee’s average daily wages, otherwise it is unpaid. To be entitled to maternity leave, the employee must submit a valid medical certificate to her employer confirming the pregnancy.

Wages

The definition of wages is set out in the Employment Ordinance. The definition of wages has become increasingly important following the Employment (Amendment) Ordinance which came into force in 2007 and changed the method

for calculating relevant statutory entitlements including: payments in lieu of notice; sickness allowance (and related provisions); maternity pay (and related provisions); end of year payment; holiday pay and annual leave pay. Employers are now required to calculate such entitlements on the basis of the employee’s average daily (or monthly) wages during the previous 12 months (or a shorter period where the employee has been employed for a shorter period).

The minimum wage ordinance (MWO) came into effect on 1 May 2011. The initial statutory minimum wage rate is HK$28 per hour. Under the MWO, an employee is entitled to be paid wages in respect of any wage period of not less than the minimum wage.

The Employment Ordinance sets out a number of strict provisions in relation to the manner, timing and payment of wages which employers

should comply with. It also strictly prohibits deductions being made by an employer from an employee’s wages other than in certain limited circumstances.

Bonuses

Hong Kong employers often provide employees with an end-of-year payment/bonus. This is sometimes referred to as a 13-month payment, double pay, or end of year bonus and is usually paid out during the Chinese Lunar New Year period. Where bonus provisions are included in an employment contract, they are no longer payable at the discretion of the employer unless such discretion is clearly retained and this is reflected in practice. Where a bonus is contractual, the Employment Ordinance regulates the amount, payment and timing of the bonus when the employment contract is silent or unclear on these matters.

Mandatory Provident Fund

Employers are required to enroll their staff in a Mandatory Provident Fund if an employee is employed for at least 60 days subject to certain exceptions for casual employees employed in the catering or construction industry. Both the employer and employee are required to contribute to the fund at a rate of 5% of the employee’s relevant income, although a statutory cap applies. There are exemptions for expatriate employees given permission to remain in Hong Kong for employment purposes for less than 13 months or where the


expatriate employee is a member of a provident, pension, retirement or superannuation scheme run in a jurisdiction outside Hong Kong.

Employees’ Compensation

Most employees in Hong Kong are covered by the Employees’ Compensation Ordinance in respect of injuries arising out of and in the course of employment. Employers are required to take out a policy of insurance in respect of such liability.

Taxation

All employees who earn income from a Hong Kong employer are liable to pay salaries tax. Employees are responsible for paying tax and employers are generally not required to make any deductions for taxation from an employee’s salary. Instead, the employer has reporting duties.

Occupational Safety and Health

Employers in Hong Kong are subject to common law duties in respect of the health and safety of their employee’s. This includes a duty to take reasonable care, to provide a safe place of work and to protect employees from foreseeable risk of injury.

Data Privacy

Employers in Hong Kong are required to comply with data protection principles set out in the Personal Data (Privacy) Ordinance when collecting and using employee’s personal data. Broadly, the principles require that personal data should only

be used for the purposes for which it was collected, or purposes which are directly related to those purposes. The principles impose obligations in relation to informing individuals of the purposes for collecting the personal data and the use which would be made of that personal data. In addition, the principles restrict the use and storage of the personal data and require that the personal data should be collected by means that are lawful and fair. Employers are also required to ensure that the personal data is accurate and held securely. Individuals have a right to access and correct their personal data which is held by the employer.

Records

Employers are required under the Employment Ordinance to keep employment records, annual leave records, sick leave records and maternity leave records. Further, under the Immigration Ordinance, employers are required to keep a record of the full name of each employee, as shown on the Hong Kong ID card or travel document, and the type and number of that document.

tERmination

The termination of an employment contract can be brought about in a number of ways, for example, by exercising a contractual or statutory right to terminate, by agreement or by operation of law. In the absence of any ‘unfair dismissal’ regime in Hong Kong,

termination of an employment contract is generally considered to be fairly straightforward. However, the Employment Ordinance does provide remedies to employees on termination in certain circumstances and, therefore, it is important that employers are aware of their contractual and common law obligations as well as the statutory provisions.

Termination Payments

An employee may be entitled to the following payments on termination: accrued wages for work performed; a payment in lieu of notice (calculated on the basis of the employee’s average daily (or monthly) wages); accrued annual leave, outstanding holiday pay and accrued end of year payments. In addition, employees who are dismissed by reason of redundancy may be entitled to a severance payment if they have been in continuous employment for 24 months or more. This is capped at HK$15,000 per year of service (and pro-rata for any incomplete year) up to a maximum of HK$390,000. Employees who are not entitled to a severance payment, and who have at least five years’ continuous employment, may be eligible for a long service payment on termination (calculated in the same way as a severance payment). Any amount which the employer has contributed into the employee’s mandatory provident fund for the relevant period of service may be off-set against any liability to pay a severance or long service payment.


dla pipER in a global contExt

Overview

DLA Piper is a global law firm with 4,200 lawyers located in more than 30 countries throughout the Americas, Asia Pacific, Europe and the Middle East, positioning it to help companies with their legal needs anywhere in the world.

DLA Piper is relationship-driven and built to meet the ongoing legal needs of clients wherever they choose to do business. We provide the geographic spread required by leading businesses, be they local, national, regional or international.

We offer clients an extensive range of legal services through the following seven global groups:

■ Corporate (including tax)

■ Employment

■ Finance and projects

■ Intellectual property and technology

■ Litigation and regulatory

■ Real estate

■ Restructuring

Details of our worldwide locations are set out over the page.

Our lawyers in all our worldwide locations provide the same dedicated approach to legal services and quality, are fully versed in their local and cultural business communities and apply the highest technical skills with the best informed current thinking.

For further information on our legal services organisation please visit www.dlapiper.com.


dla pipER's woRldwidE locations*

* includes DLA Piper Group locations

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DLA Piper is a global law firm operating through various separate and distinct legal entities.

Further details of these entities can be found at www.dlapiper.com | Hong Kong switchboard +852 2103 08088

Copyright © 2013 DLA Piper. All rights reserved. | AUG13 | 2017188

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We are pleased to attend to your needs in establishing operations in Hong Kong.

We provide a full range of corporate services, including advising on initial compliance issues in relation to setting up your preferred form of establishment; provision of “shelf” company; provision of an authorised representative; a registered office facility; provision of a nominee shareholder and continuing company secretarial services (through our service company, Clarson Services Limited). We can also provide other corporate services and arrange for the acquisition or incorporation of offshore companies as and when required.

If you would like further information about our services, please contact:

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t +852 2103 0787 [email protected]

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mabel luiPartner (Hong Kong) and Co-Head of Corporate, Asia Pacific


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Note: This publication is a general overview and discussion of the subjects dealt with and is up to date as of July 2013. It should not be used as a substitute for taking legal advice in any specific situation. DLA Piper accepts no responsibility for any action taken or not taken in reliance on it.

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