Move To Vietnam - what are the implications

peacock · 08-02-2009, 05:08 PM

I've been in HK for 1.5 years and I've recently been asked if I'm willing to move to Hanoi, Vietnam in little over a month from now to help grow our business there and have a stronger foothold in the country. And I am definitely willing to, as it is a tremendous opportunity to develop myself and see more of the world.
My question is, what are the things I have to realize and take into account - I'll probably have a secondment, meaning that my contract will remain in HK. Anybody have any experience in this or any ideas about the following - how will my HK residency be affected, what about taxation, MPF schemes, etc
I realize most of these should be answered by my employer, but I would like to have an idea from others (and maybe suggestions on what else to ask from my employer) before I talk to them.

Any thoughts, ideas or suggestions are highly appreciated!

Cheers

PDLM · 08-02-2009, 06:22 PM

If you live in Vietnam then by definition you are not a HK Resident. Where your contract is is irrelevant - many expats resident in HK have contracts in other countries. You will pay tax and so on based on your residency (i.e. Vietnam) - no tax will be due in Hong Kong on your salary for employment in Vietnam. Since you will not be resident in HK then you would need to start again if you were hoping to get PR after 7 years of continuous residency.

peacock · 08-02-2009, 06:47 PM

thanks for the quick reply - that makes perfectly sense. just wondering if there's any ways of preventing this... tax in 'Nam is just so high :S.
so, it wouldn't make a difference if it be a secondment....?
how many days a year does one have to be in HK to be legible for residency?

psjylife · 08-02-2009, 07:04 PM

Come on!

I'm pretty sure that the daily life in Hanoi is much cheaper than in HK.

U can give the difference to the country where you will actually live!

No?

SpecialK · 08-02-2009, 07:51 PM

If tax is higher then your employer should/will up your salary otherwise why would you move?

gilleshk · 08-02-2009, 08:02 PM

Well, there are several issues here. First if you're going to be paid by a company established in Vietnam then you are automatically liable for whatever you have earned there.

Now there are several people in Hong Kong that spend significant amount of time in China but are officially based in HK. In many cases, they can avoid paying taxes by not spending more than 183 days in China and they therefore maintain their residency in HK and pay taxes over here. They are considered to be on extended business trips.

I believe that would be the only way you could maintain your status in HK. Of course your company would have to agree to that which doesn't seem likely in your case.

peacock · 08-02-2009, 08:11 PM

I guess its a bit of a complicated situation. I currently have a contract with a local HK company, which is part of a multinational, but an independent entity. The multinational mothercompany does have an office and business license to operate in Vietnam, while the company I have my contract with does not (yet). I would be working in the multinationals office, but on a contract/secondment with (and projects of) the local HK company I currently have my contract with.
Hence, I am hoping to be able to keep my contract in HK, and be paid in HK (a bit more of a stable currency as well), yet be actually working in living in Vietnam....

Would this work? Which institution should be able to advice on this?

PDLM · 09-02-2009, 01:22 AM

I'll say it again because it clearly didn't register first time. Where your contract is signed (and the currency you are paid in) is of no relevance at all to where you pay tax in any country that I know of.

Raccon · 12-02-2009, 07:11 PM

peacock, since your company seems to be rather big they should have a HR department that deals with those matters and that can advise you. There might be some ways to at least minimize your tax in Vietnam but that would require the co-operation of your company. Not suggesting anything illegal but they may know some loopholes.

HKFella · 13-02-2009, 02:45 AM

Or they may be willing to do an "expat" style package and tax-equalize you to HK's rates. Taking it further, to reflect lower cost of living, they might claw back some of your pay as a reimbursement while still keeping your base HK notional salary intact for retirement, merit increase, bonus, and other benefits purposes. Also pay you an allowance for being in a much developed place than HK with some safety, legal, and other risks related to living there (country or "hardship" allowance relative to HK). Don't know how that would work for MPF etc. There must be HK-centred MNCs (Cathay/Swire, Jardine, etc) that post their HK staff overseas without detriment to their retirement benefits etc. How do they do it?

If your parent MNC has the scale, they may know all this as The parent HR may know about this and apply it to expats and third-country nationals (TCNs) already.

I don't want to get your hopes up, as a lot depends on your company culture (traditional expat, modified expat, whatever), but above are some ideas for you to explore further. Others may add more.