APAC

What Recent Legislative Changes Mean
for Doing Business in Hong Kong

By April 12, 2019 No Comments
What Recent Legislative Changes Mean for Doing Business in Hong Kong

If one were to list the easiest places in the world to do business, Hong Kong would undoubtedly rank among the top. Hong Kong does sit atop many such lists, including at the number four position on World Bank’s famous list as of 2018. From the ease at which one can start a new business there to the fact that the local government enables cross-border trading, protects minority investors, and enforces contracts, Hong Kong is only outpaced by Denmark, New Zealand, and Singapore.

Because of this, Hong Kong has long been an attractive target for many businesses’ global expansions. However, there are a few  recent legislative updates decision makers should be aware of before beginning operations in Hong Kong.

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Doing Business in Hong Kong: Updates to its Discrimination Law

One of the most important recent legislative updates is Hong Kong’s Discrimination Legislation (Miscellaneous Amendments) Bill 2018, which was first published in November of that year. It was designed to amend a number of different laws including the Sex Discrimination Ordinance and the Disability Discrimination Ordinance, among others.

The bill makes eight key recommendations for businesses operating in Hong Kong. Not only were express provisions introduced in the aforementioned Sex Discrimination Ordinance to prohibit discrimination against mothers who breastfeed, for example, but “milk” is now included in the definition of breastfeeding.

Other changes include providing protections against both direct and indirect racial discrimination and harassment and protecting service providers from disability and racial-based harassment by consumers.

Paternity and Maternity Leave in Hong Kong

Hong Kong has also taken the significant step of increasing statutory paternity leave for the fathers of all children born on or after January 18, 2019. Previously, fathers were only guaranteed three days. To qualify, that employee must have been working under a continuous contract with the business in question for more than 40 weeks, must have given notification of his intention to take advantage of paternity leave, and must prove that he is indeed the father of the child in question.

One legislative update that has yet to be approved (but will likely be in the not-too-distant future) involves an increase in statutory maternity leave. Right now, paid maternity leave in Hong Kong comes out to 10 weeks. Soon, that number will climb to 14 weeks if Chief Executive Carrie Lam has her way. The news of this proposal has been seen as a way to incentivize businesses to extend their own maternity leave before it becomes mandatory for them to do so as soon as 2022.

Those weeks will be paid at a rate of 4/5ths of the employee’s average daily salary over the previous year. However, the payment is capped at about $4,692 per month, or about 4/5ths the salary of someone making $6,371 per month at current exchange rates.

Expand into Hong Kong with an Experienced Global Expansion Partner

None of these changes make it any less enticing to do business in Hong Kong—though they likely make it far more enticing for people to work there. If nothing else, these changes serve as a reminder of the importance of finding the right partner as your organization moves forward with its global expansion plans.

Velocity Global, with its International PEO (Professional Employer Organization) solution, has years of experience in Hong Kong and can keep you and your team up-to-date on legal changes that may impact your expansion, ensure you’re meeting all compliance requirements, and take care of any work visas and authorizations for your employees.

If your organization is ready to establish its presence in Hong Kong—or any of the other 185+ countries in which we operate—reach out to us today to take the first step towards global expansion. We’re ready when you are.