In general, there are three types of employment arrangements for Hong Kong residents working in the Mainland:
According to the Decision of the State Council to Cancel a Group of Administrative Licensing Items and Other Items issued on July 28, 2018, Hong Kong residents are no longer required to apply for Employment Permits for Persons from Taiwan, Hong Kong and Macao ("Employment Permits") for employment in the Mainland. Details can be found in below website (Chinese version only):
http://www.gov.cn/xinwen/2018-08/30/content_5317710.htm
In June 2017, the General Office of the Ministry of Education issued the Notice on Fine-tuning the Work on Employment Services for the Current Year Hong Kong, Macao and Taiwan Graduates from Higher Education Institutions in the Mainland (《教育部辦公廳關於做好在內地（祖國大陸）普通高校就讀的港澳台應屆畢業生就業服務工作的通知》), providing employment information services and guidance to Hong Kong and Macao graduates. Those who have intention for employment and who meet the requirements will be issued "Employment Agreement” (《就業協議書》) and "Employment Registration Certificate"(《全國普通高等學校本專科畢業生就業報到證》,《全國畢業研究生就業報到證》), so as to facilitate them to enter the employment market in the Mainland.
The Interim Measures for Hong Kong, Macao and Taiwan Residents’ Participation in Social Security Schemes in Mainland China was issued by the Ministry of Human Resources and Social Security of the People's Republic of China in November 2019 to regulate the participation of the social security by Hong Kong, Macao and Taiwan employees working in the Mainland:
Hong Kong residents / employers should pay close attention to any updates of the relevant regulations and policies to be kept abreast of and comply with the relevant requirement.
For the first category of Hong Kong residents, as Shanghai has not issued any detailed regulations, employers have the discretion to decide whether they would enroll their Hong Kong employees in the social security scheme. For more detailed information related to social security, please refer to Shanghai Social Security Online Services website (Chinese version Only):
http://www.rsj.sh.gov.cn/wsbs/wsbg/index.shtml
In November 2017, the Ministry of Housing and Urban-Rural Development, the Ministry of Finance, the People's Bank of China, the Hong Kong and Macao Affairs Office of the State Council and the Overseas Chinese Affairs Office of the State Council jointly formulated the Opinions on Issues concerning the Enjoyment of Housing Provident Fund Treatment by Hong Kong, Macao and Taiwan Compatriots Working in the Mainland (hereinafter referred to as "Opinions")(《關於在內地（大陸）就業的港澳台同胞享有住房公積金待遇有關問題的意見》). Under the policy, Hong Kong and Macao compatriots working in the Mainland may contribute to housing provident funds in accordance with the Regulation on the Management of Housing Provident Fund (《住房公積金管理條例》) and relevant policies. The deposit base, deposit ratios and processing procedures, among others, shall be subject to the policy provisions consistent with those for the employees contributing to the funds in the Mainland. Hong Kong and Macao compatriots who have contributed to housing provident funds will enjoy rights to withdraw from their own housing provident funds and apply for individual housing loans similar to those of Mainland employees. Those who relocate to other cities in the Mainland can apply for transfer of housing provident funds. Those who have dissolved or terminated their employment contracts with their employers and return to Hong Kong or Macao may withdraw the balance from their housing provident fund accounts in accordance with the relevant provisions. For more information on the Opinions mentioned above, please refer to the announcement of the Hong Kong and Macao Affairs Office of the State Council (Chinese Version Only):
http://www.hmo.gov.cn/xwzx/zwyw/201712/t20171213_1602.html
Wages and salaries earned by Hong Kong people from the Mainland should be subject to the individual income tax in accordance with the PRC Individual Income Tax Law, Regulation on the Implementation of the Individual Income Tax Law of the People's Republic of China and relevant regulations. Hong Kong residents, who have a domicile in the Mainland or do not have a domicile but have lived in the Mainland for over one year, shall pay China individual income tax on the income derived from inside and outside of the Mainland in accordance with the prevailing tax regulations.
If a Hong Kong resident is not employed by any Mainland enterprise and stays in the Mainland for no more than 183 days in any 12 months, and his/her salary is not paid or borne by any Mainland enterprise or permanent institution, his/her salary shall not be subject to individual income tax in the Mainland according to the Arrangement between the Mainland of China and the Hong Kong Special Administrative Region on the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income (the "Arrangement").
Income from wages and salaries by Hong Kong residents shall firstly be divided as domestic income and foreign income:
Moreover, the China individual income tax liability shall be determined based on the time of residence in the Mainland (see table below):
| Time of residence in the Mainland | Mainland Payment | Foreign Payment | Formula Applied (Tax Payable) | ||
|---|---|---|---|---|---|
| Domestic Payment | Foreign Payment | Domestic Payment | Foreign Payment | ||
| 1 day -90/183 days (183 days in accordance with the PRC-Hong Kong Tax Arrangement) | Taxable | Tax-free; Senior executives up to the director provisions of applicable PRC-Hong Kong Tax Arrangement need to be taxed | Tax-free | Tax-free | (Taxable income from monthly salary paid inside and outside China * applicable tax rate - quick deduction) * (monthly salary paid inside China / total monthly salary paid inside and outside China) *(number of days inside China in the month / number of days in the month)
(Note: For senior executives up to the director provisions of applicable PRC-Hong Kong Tax Arrangement, see Note 1) |
| 91/184 days (184 days in accordance with the PRC-Hong Kong Tax Arrangement) - less than one year | Taxable | Tax-free; Senior executives up to the director provisions of applicable PRC-Hong Kong Tax Arrangement need to be taxed | Taxable | Tax-free | (Taxable income from monthly salary paid inside and outside China * applicable tax rate - quick deduction) * (number of days inside China in the month / number of days in the month) (Note: For senior executives up to the director provisions of applicable PRC-Hong Kong Tax Arrangement, see Note 2) |
| 1-year,less than 6-year | Taxable | Taxable | Taxable | Tax-free | (Taxable income from monthly salary paid inside and outside China * applicable tax rate - quick deduction) * [1 - (monthly salary paid outside China / total monthly salary paid inside and outside China) * (number of days outside China in the month / number of days in the month)] |
| Over 6-year | Taxable | Taxable | Taxable | Taxable | Taxable income from monthly salary paid inside and outside China * applicable tax rate - quick deduction |
Note 1: (Taxable income from monthly salary paid inside and outside the Mainland * applicable tax rate - quick deduction) * (number of days in the Mainland in the month / number of days in the month)
Note 2: (Taxable income from monthly salary paid inside and outside the Mainland * applicable tax rate - quick deduction) * [1 - (monthly salary paid outside China / total monthly salary paid inside and outside the Mainland) * (number of days outside the Mainland in the month / number of days in the month)]
Hong Kong Residents who are Employed Directly by the Mainland Employer and Work in the Mainland Only
For Hong Kong residents who are directly employed by and whose wages / salaries are borne by the Mainland employers, such wages and salaries are subject to Individual Income Tax. The income tax will be withheld by the employers.
Applicable individual income tax rates range from 3% to 45%, and can generally be split into seven categories on a progressive basis. Hong Kong residents' salaries received in the Mainland will be subject to individual income tax reporting and payment on a monthly basis, after taking into account a monthly standard deduction in the amount of RMB 5,000. Some non-cash benefits or reimbursement provided to individuals based on actual costs may be exempt from individual income tax if they qualify as "non-taxable" items or benefits. These tax-free items include housing allowance, meal allowance, laundry expenses, and relocation expenses to and from the Mainland, home leave allowance, language training expenses, and children's education subsidies.
For more information on personal income tax please refer to the website of the Shanghai Municipal Office:
http://shanghai.chinatax.gov.cn;
or call the Shanghai Municipal Office's service hotline at 021-54679568
For more information about Arrangement between the Government of the People's Republic of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, please refer to the website of the State Administration of Taxation:
http://www.chinatax.gov.cn/n2925/index.html
According to the Circular of the State Administration of Taxation on Issues Concerning the Implementation of Several Policies on Individual Income Tax (Guoshuifa [2009] No. 121), a Hong Kong resident who opens a factory in the Mainland and takes up the role of a director as well as performs managerial duties, his / her income / director's fees arising from such duties should also be subject to individual income tax.
Children of Hong Kong residents may choose to receive pre-school, primary, secondary and tertiary education in the Mainland.
Children of Hong Kong residents may choose to attend a local kindergarten or international schools (schools that cater primarily for children of expatriates or non-Chinese residents) for pre-school education.
Entrance requirements are set by individual schools and are generally published on their official websites. If Hong Kong residents would like to enroll their children in a local kindergarten, they may contact the kindergarten directly. Whether or not the children will be accepted would be subject to the discretion / decision of individual kindergarten. If Hong Kong residents opt to send their children to international schools, the application should be made to individual international school in accordance with their requirements. The schools will have sole discretion on whether or not to accept such application.
For more information on international schools approved by the Ministry of Education, or a list published by the Shanghai Municipal Commission of Education containing kindergartens located in different districts and counties, please refer to the relevant website of the Ministry of Education and the Shanghai Municipal Commission of Education:
Children of Hong Kong residents may choose to attend a local primary or secondary school, or an international school. Parents or guardian of Hong Kong students in Shanghai should familiarize themselves with relevant education systems, admission requirements, application period, and other detailed information before enrolling their children.
A written application should be submitted to the Overseas Chinese Affairs Office of the district or county government in the region where the parents or the guardian live in. After obtaining the required government approval, Hong Kong residents may then contact the school(s) of their choices, and provide documentation as required by the school(s). Discretion rests with individual school to decide whether to admit Hong Kong students based on local regulations on the size of the classes and the circumstances of the students. Once admitted, those Hong Kong students could attend schools / classes as non-Shanghai resident students on a temporary basis. For more information on the application / admissions into primary or secondary schools in Shanghai, please refer to the website of the Overseas Chinese Affairs Office of the People's Government of Shanghai Municipality:
http://qwb.sh.gov.cn/gb/shqb/english/index.html
If Hong Kong residents choose to send their children to international schools, the application shall be filed directly with the schools in accordance with their requirements. The schools will have the sole discretion on whether or not to accept the applicants. In the event where Hong Kong students are being transferred to these international schools during the school term, they must present their transcripts and participate in entrance examinations organized by the schools. After admission, the relevant schools should report their students' information to the Shanghai Municipal Commission of Education for record.
For more information on international schools approved by the Ministry of Education, or a list published by the Shanghai Municipal Commission of Education containing kindergartens located in different districts and counties, please refer to the websites of the Ministry of Education and the Shanghai Municipal Commission of Education:
Students may choose to attend international schools that cater primarily for children of expatriates or non-Chinese residents. For more information on the schools, please refer to the official website of the Shanghai Municipal Commission of Education:
http://study.edu.sh.gov.cn/en/
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Hong Kong residents who wish to apply for colleges in the Mainland can sit for an entrance examination organised by the colleges and universities that accept overseas Chinese, Hong Kong, Macao and Taiwan students. Some of the main admission requirements are as follows:
As for the examination content and requirement, please refer to the Syllabus of joint entrance exam held by mainland colleges and universities to recruit overseas Chinese, Hong Kong, Macao and Taiwan students formulated by the Ministry of Education.
For more information, please refer to the websites of the Hong Kong Examinations and Assessment Authority or Mainland college enrollment information for Hong Kong, Macao and Taiwan students (Chinese Version Only):
In addition, according to the notice issued by the Ministry of Education with respect to Fine-tuning Work of Enrollment Hong Kong students without sitting for the entrance examinations in Colleges of the Mainland during the year of 2012 (Jiao Gang Ao Tai Han [2011] No. 72), from 2012 onwards, a number of Shanghai universities and institutions may recruit Hong Kong students who meet certain requirements / qualifications without the need to sit for the entrance exams. Hong Kong students who have sat for the Hong Kong Diploma of Secondary Education Examination or Hong Kong Advanced Level Examination can apply for open enrollment in Mainland universities. The admission requirements may vary and prospective students can refer to enrollment brochures of individual universities or post secondary institutions.
For more detailed information, please refer to the official websites of the Education Bureau of the Government of the Hong Kong Special Administrative Region and Shanghai Municipal Commission of Education:
The Ministry of Finance and the Ministry of Education have promulgated the Measures for the Administration of Scholarships for Hong Kong, Macao and Overseas Chinese Students (hereinafter referred to as "Measures") (《港澳及華僑學生獎學金管理辦法》), which have been distributed to the local finance departments, education departments of all provinces, autonomous regions and municipalities and all higher education institutions under the Central Government on setting up special scholarships for Hong Kong, Macao and overseas Chinese students studying in the Mainland. "Grand Prize" scholarship is added for Hong Kong and Macao students by making reference to the scholarship system for local students. The number of scholarships and rates of scholarship awards have been enhanced. For details of the above Measures, please refer to the announcement of the Hong Kong and Macao Affairs Office of the State Council (Chinese Version Only):
http://www.hmo.gov.cn/xwzx/zwyw/201712/t20171213_1602.html
Hong Kong and the Mainland have reached an agreement on mutual recognition of higher education credentials and signed a Memorandum of understanding between the Mainland and Hong Kong on Mutual Recognition of Academic Degrees in Higher Education (hereinafter referred to as "Memorandum") on July 11, 2004.
According to the Memorandum, Hong Kong and the Mainland would determine a list of accredited colleges and universities and regularly update the list. Diplomas, including a bachelor's or higher degree certificates awarded by accredited colleges and universities of one party will be recognized by the other. A summary of the main points made in the Memorandum:
For more detailed information of the Memorandum, please refer to the website of the Ministry of Education:
http://www.moe.gov.cn/publicfiles/business/htmlfiles/moe/moe_2792/index.html