EMPLOYEES COMPENSATION INSURANCE?

[london008]

I know about this, but how does it apply. Lets say you start up a LTD. Intend to employ no staff ever, other than yourself as director. Yep you are a permanent resident, you have your MPF set up through your LTD. Do you still get the Employees Compensation Insurance for yourself? I have heard contradicting things on this. I approached HSBC and they said nope, you don't. I thought fine, but then after a bit of research online from a few accounting firms it says yep, if you take a salary as a sole director of your own LTD then you do need it.

Just as a side not we are talking about sitting at home, park, cafe's on the laptop doing web stuff, never seeing clients, never going anywhere, nobody ever coming to you.

Anyone in the same position? Appreciate the advice.

[traineeinvestor]

I have a very small HK company with zero employees. I am the sole director and have classified myself as a "non-executive director" meaning I am not an employee as a matter of law.

I take money from the company by way of directors fees and/or dividends - not salary (because I am not an employee).

This means I do not have to make MPF contributions or take out employees' compensation insurance under the ECI Ordinance. If I was an employee I would have to do both.

The question is specifically addressed by the MPFA (see link) but although I could not see it on the Labour Department FAQ, the analysis should be the same for ECI.

https://www.mpfa.org.hk/engm/informa...oyee/index.jsp

[civil_servant]

I have a very small HK company with zero employees. I am the sole director and have classified myself as a "non-executive director" meaning I am not an employee as a matter of law.

I take money from the company by way of directors fees and/or dividends - not salary (because I am not an employee).

This means I do not have to make MPF contributions or take out employees' compensation insurance under the ECI Ordinance. If I was an employee I would have to do both.

The question is specifically addressed by the MPFA (see link) but although I could not see it on the Labour Department FAQ, the analysis should be the same for ECI.

https://www.mpfa.org.hk/engm/informa...oyee/index.jsp

Aren't you involved in the daily operations?

[traineeinvestor]

Aren't you involved in the daily operations?

Nope. All day to day operations are outsourced. Most days I have zero to do.

[CatcherBiz]

The short answer is, both the HSBC staff and accounting firm are correct.

• Under the current law, yes, the EC insurance is a "Compulsory Insurance", no matter you are self-employed or not;
• Yet, under section 40 (1F), this is the liability of a person (employer(s)) to his employee by accident; as for self-employment case, both are the same person, the question is, will you report yourself for any case of non-compliance, even if there is an accident happened?

40.
Compulsory insurance against employer’s liability


(1)


Subject to subsections (1B) and (1C), no employer shall employ any employee in any employment unless there is in force in relation to such employee a policy of insurance issued by an insurer for an amount not less than the applicable amount specified in the Fourth Schedule in respect of the liability of the employer.
(Amended 47 of 1995 s. 4)


(1F)


The reference in this section to the liability of a person is a reference to the liability of the person under this Ordinance and independently of this Ordinance for any injury to his employee by accident arising out of and in the course of the employee’s employment.
(Added 47 of 1995 s. 4)

Okay, we look into this question from another angle, not whether or not this is a legal requirement or compulsory arrangement.

Back to the principle, this is "an insurance", this is for the purpose of protection of something unexpected.

Let's consider the worst-case scenario, the self-employed person going out for a business meeting, a car accident happened, and extremely unfortunate that person deceased.

Now, there is insurance available, protecting the employee on both injury and fatal event during work, will you consider to purchase one? Approximately HKD2,000 - 3,000 per year and the coverage is not bad at all:-
https://www.labour.gov.hk/eng/public...f=geoexpat.com

For more information about Employees' Compensation, below is the link for your easy reference:-
https://www.labour.gov.hk/eng/public...f=geoexpat.com

Hope this answer suit you well.

[Tyresmoke]

I've got a Limited Company and I'm both the sole Director and only employee. I tried to get ECI as I understood this to be a legal requirement, but can't get it because I work from a home office.

The insurance broker (supposedly an ECI specialist) advised me:
"At the moment, most EC insurance policies are providing silent cover for home office due to Covid-19 if the client is already insured. This would still require the client to have a commercial business address. However, cover for pure office at home is still not available."