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Relocating from NYC to HK

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  1. #1

    Join Date
    Sep 2019
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    5

    Cool Relocating from NYC to HK

    Hi all,
    I am glad that I found this forum! I read through several posts regarding HK relocation but I thought I might post my situation and hear your thoughts!!


    - 40 year old single male with no kids (American)

    - Living and working in NYC for past 15+ years

    - Yearly base salary of US$165k + 20% annual bonus = around US$200k total (I think that's around HK$1.5M)


    I am talking to my US based company to relocate me to HK. Since I am initiating this move, most likely I will keep my salary as-is.
    I've been doing some research and apparently expats make a lot more money? My main question is how comfortably I can live in HK with my current salary.

    Living in US and being single, I only walk away with 50% of my salary in cash (they take social security, 401k and other taxes...). I hear that living abroad will benefit my tax situation. Any advice will be greatly appreciated.
    Thank you!


  2. #2

    Join Date
    Jan 2018
    Posts
    1,345

    It depends on the expat, some have fabulous packages, others, not so much. Plenty of people living here on much less, not to mention that the median local salary is quite low, under 20k HKD per month I believe.

    If you can get the same salary plus some kind of housing allowance (even if it is only partial coverage) you could do fine.
    '
    But moving just for the money, especially from a city like NYC where there is so much more on offer culturally, etc. than HK could prove very dissatisfying unless there is something else in it for you. Do you like HK? Do you want to explore Asia? Great! Doing it purely as a financial ploy doesn't seem like enough of a reason to make the move. For me the work I do here is dfferent from what I did in the US (same line of work, very different clients) and it's more interesting to me so that makes it worthwhile. So that's a pretty personal decision about your work, your life, your dating opportunities (some have said they want to move for that reason, and that's totally valid as well), whatever other things about HK make it seem like an interesting thing to do as well as being able to reap the tax benefits.

    Good luck with the decision!


  3. #3

    Join Date
    Oct 2017
    Posts
    586

    Agree with what MAB has said.

    Also, you'll have to pay over the 100k or so mark for money earned abroad. Housing, depending on your expectations, needs, wants, etc., can easily reach 40-60k USD per year (and more if you want to drive here). The salary is OK to live comfortably, but don't expect a huge increase in living standards or qualify of life because income taxes are lower here.

    Have you visited HK before? NYC is a much better city IMO. And taxes are a pain (and/or expensive) to file abroad.

    d3011d and biffski like this.

  4. #4

    Join Date
    Sep 2019
    Posts
    5

    Wow thank you. I really appreciate your reply.

    I am moving mainly for the work experiences and money isn’t necessarily on top of the list but at the same time, I want to have somewhat comfortable life...

    Definitely I will try to get a housing allowance for sure.
    Thank you again!


  5. #5

    Join Date
    Jan 2018
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    1,345

    About the tax- you deduct a base amount (around 95k or a bit more, accountant deals with that) and then you can also deduct your housing expenses (rent, utilities). So that gets you up to at least 130k deduction. Can be much higher if you pick a posh flat. But then, the rest is taxed at the bracket you would have been had you not deducted the 130k. So for the last 70k or so, it is taxed at the 200k tax bracket. Of course, not paying FICA is a huge savings as well. The tax advantages are considerable. And if the work would be interesting then go for it.

    d3011d, Kowloon Goon and spode like this.

  6. #6

    Join Date
    Sep 2019
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    5
    Quote Originally Posted by Kowloon Goon
    Have you visited HK before? NYC is a much better city IMO. And taxes are a pain (and/or expensive) to file abroad.
    Yes I have visited HK multiple times and I love there except the weather I will have to get used to... I also love New York and I call here home but it is always love and hate relationship... You love the city but you also want to leave. A lot of my friends actually have moved out of the city to California and other parts of US.

    I actually wanted to move to Shanghai but there are currently no opportunities there right now. I want to explore HK first and I hope it will open up more opportunities in other parts of Asia.

    Thank you again for your reply. I will keep you posted!
    Kowloon Goon, spode and hin23leung like this.

  7. #7

    Join Date
    Mar 2017
    Location
    north point
    Posts
    278

    Former New Yorker here. I also moved for the new experience and while living abroad has a certain sense of wonder and mystery that is still true after 4 years abroad there are small things that you only take for granted after you leave.

    For starters the cost of living is much higher than NYC if living a western life style. Organic veg, good quality coffee, decent wine is significantly more expensive than in the US. Housing is still eye wateringly expensive even compared to manhattan rents.

    But for me the biggest degradation in quality of life are the little things. Running in Central Park, going to Peloton studio or Barry’s for a quick workout, catching an impromptu show at the Vanguard or Mercury Lounge, checking out the hot new restaurant recommended by the NYT or Grubstreet, eating out of a taco truck at Redhook, etc etc. Some of these activities exist but only a fraction of the quality and experience.


  8. #8

    Join Date
    Feb 2011
    Location
    Hong Kong
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    5,925
    Quote Originally Posted by d3011d
    Yes I have visited HK multiple times and I love there except the weather I will have to get used to... I also love New York and I call here home but it is always love and hate relationship... You love the city but you also want to leave. A lot of my friends actually have moved out of the city to California and other parts of US.

    I actually wanted to move to Shanghai but there are currently no opportunities there right now. I want to explore HK first and I hope it will open up more opportunities in other parts of Asia.

    Thank you again for your reply. I will keep you posted!
    A lot of people move because they want to get away from the high property prices. At least was my experience when I was in DC.

    HK is a great place, but don't expect that your quality of living will improve. The summer heat is unbearable. Just 2-3 minutes outside and I'm sweating and that's wearing shorts and a t-shirt, and it's everyday for several months (4-6 months). The winters are very nice with loads of activities to take part in.

    What's your budget for rent and what size of apartment are you looking for? At least to set your expectations right.

    Food wise, what do you like to eat. Do you drink regularly? Can you go to a restaurant with no English menu and get by? Or do you need western food? Western food at the entry point is pretty bad in my opinion and not cheap. Chinese food is great but many Americans don't like because they have bones or look quite different. Fish served with the head, chicken served with the head, etc.

    I have these issues when friends visit me from the states.

    Also, now is a bit chaotic, I would wait until the situation in HK cleans up before moving here. Do you have a job waiting for you back in the states should the HK office need to cut costs or downsize? Who is responsible for the lease and deposit as well?
    d3011d, biffski and z754103 like this.

  9. #9

    Join Date
    Jun 2016
    Posts
    611

    The bottom line is HK is a much more dense urban environement than even Manhattan. Healthier food options (no Whole Foods or even Trader Joe's) are very limited. You are going to miss Costco and Amazon - basically expect to pay more for any item as high real estate prices and oligoploistic practices are embedded into all things you need. If you think Gristedes is a nasty place to shop then you have not seen some Wellcome stores. Expect rent per square foot to be much higher. To be incentivized to make the move you should ask for a higher salary IMO.

    tf19, d3011d, biffski and 2 others like this.

  10. #10

    Join Date
    Sep 2017
    Location
    Mid-Levels
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    There are many reasons why you would want to move to HK or rather move out of NYC and I am sure you have considered them all. Since you asked for an opinion on tax benefits and whether your mentioned salary is comfortable. Here's my take on it.
    PS: We moved from NYC to HK 2 years ago. Idea was to do 2 years, but as they say, its either 2 or forever.

    Is your salary comfortable - I think it is very much. If you take your base pay, you have a base monthly salary of HKD 107,250 per month less HKD 1500 deduction for retirement plan contributions = HKD105,750. Spend HKD 20-23k for a large studio or decent 1 bed in mid-levels, sai ying pun, etc (i've seen many in my recent search for apartments), HKD 1k for utilities ... thats all your housing taken care off.

    Tax situation - based on HKD 1.5m total pay, your tax bill for 2019-2020 year will be HKD 211,500 or 14% ... good savings from 24% in the US.

    Take home pay situation - this is where things need to be weighed in. Lets look at line by line what gets taken out of your paycheck in the US and see whether it is a benefit or not:

    Social Security/Medicare - You will not be contributing to this fund. Your SS statement will show $0 annual contribution. How does this affect your retirement benefits is what you need to be able to accept. Maybe this is a benefit, since your views maybe that you are anyhow not going to get anything out of it.

    401k - even - you can chose to participate in your employer's retirement plan here in HK. For HK taxes you can only deduct HKD 1500 per month max. You cannot deduct contributions to HK retirement plan on your US taxes. I personally contribute just 1500 a month, declare on the US that I don't participate on employer retirement plan (I've deliberated on the rules a lot), and then contribute separately into my pre-tax IRA account in the US to build some retirement savings. I also aim to contribute in my post tax brokerage account as well. I used to max out my 401k contributions when I was in US, but here in HK, I split that contribution into IRA and brokerage account.

    Medical, Dental, Vision - Hopefully your employer in HK will cover this .. preferably in full! - If yes, def a benefit as you don't have this outgoings from your HK paycheck.

    Transportation - even - you will not have expensive monthly passes, but then you may end up splurging on taxis coz of hot weather. In HK your spend will be in after-tax dollars even for public transport.

    NYC Taxes - Benefit! - no more deductions for these.
    NYS Taxes - Benefit! - no more deductions for these.

    Fed Taxes - Benefit! - USD200k - USD103.5k (foreign earned income exclusion) - USD15k (estimated housing exclusion) = USD69.5k AGI - $12k standard deduction = USD57.5k taxable income. Determine tax bill - credit for taxes paid to HK (adjusted portion) = Tax liability to US. You will find that this number is slightly beneficial compared to what you would have paid while working in the US.

    hope this helps!

    jack55, d3011d and z754103 like this.

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