Living in Hong Kong as an Expat: Financial Hub, Banking and Property

Hong Kong has long held a unique place in global finance — a city where East meets West, where the rule of law (grounded in English common law) and free-market principles created one of the world's most dynamic economies. For decades, it was the natural Asian base for British bankers, lawyers, traders, and entrepreneurs, and the gateway to China's enormous economy.

The period since 2019 — the mass protests, the introduction of the National Security Law in June 2020, and changes to Hong Kong's political and media environment — has prompted a significant emigration wave and led many international firms to reassess their Asia-Pacific strategies. Some functions have shifted to Singapore; the British National (Overseas) BN(O) visa pathway has brought hundreds of thousands of Hong Kongers to the UK.

Yet Hong Kong remains a major financial centre as of 2026. Its stock exchange (HKEX) is among the world's largest by market capitalisation, its banking system is sophisticated and liquid, its tax system is one of the simplest and most competitive in Asia, and its position as the primary conduit between international capital and the People's Republic of China has not been replaced. For certain categories of international professional — particularly in finance, law, shipping, and trade — Hong Kong remains an exceptional base.

Hong Kong's Tax System

Hong Kong's tax system is famously simple and low-rate. Three main taxes apply:

Salaries Tax

Levied on income arising in or derived from Hong Kong. Hong Kong uses a territorial tax system — income from outside Hong Kong is generally not taxable.

Tax is assessed on the lower of:

• Progressive rates: 2% (first HKD 50,000), 6% (next HKD 50,000), 10% (next HKD 50,000), 14% (next HKD 50,000), 17% (remainder)
• Standard rate: 15% of net income after deductions

Effective tax rates are therefore very low by international standards. A professional earning HKD 1,000,000 (approximately £97,000) pays approximately 11–12% effective salaries tax.

Profits Tax

Levied on profits arising in or derived from Hong Kong at 16.5% for corporations and 15% for unincorporated businesses. A two-tier system applies: the first HKD 2 million of profits is taxed at 8.25% (corporations) or 7.5% (unincorporated).

Property Tax

15% on net assessable value of property leased in Hong Kong.

No capital gains tax, no inheritance tax, no VAT, no dividend tax, no interest withholding tax applies in Hong Kong. This makes it one of the most tax-efficient developed jurisdictions globally.

Foreign-source income is generally not taxable in Hong Kong. For an expat with UK rental income, overseas investment returns, or a UK pension, these are simply not subject to Hong Kong tax — Hong Kong only taxes what arises locally.

Residency and Right of Abode

Hong Kong does not have a formal "tax residency" concept in the way that the UK or OECD countries do. There is no minimum stay requirement to be a Hong Kong "tax resident" (as understood in other jurisdictions).

Residency and immigration: To live and work in Hong Kong, most foreign nationals (other than those from Mainland China and Macau) require a work visa or other authorised status. The main routes are:

• Employment Visa: Sponsored by an employer; most common route for professionals
• General Employment Policy (GEP): For those with skills or expertise beneficial to Hong Kong
• Quality Migrant Admission Scheme (QMAS): Points-based scheme for talent applications
• Capital Investment Entrant Scheme (CIES): For investors committing HKD 30 million+ into qualifying Hong Kong investments (reintroduced and expanded in 2023)
• Dependant Visa: For spouses and children of working visa holders
• Right of Abode: British nationals born in Hong Kong before 1997 have specific rights; BN(O) holders have the UK BN(O) visa route

After 7 years of ordinary residency in Hong Kong, an individual can apply for Permanent Residency (Right of Abode) — which provides the right to live and work in Hong Kong indefinitely without a visa.

Banking in Hong Kong

Hong Kong is one of the world's great banking cities. Licensed banks include global institutions (HSBC, Standard Chartered, Citibank, Deutsche Bank, UBS, JPMorgan) alongside major Chinese banks (Bank of China, Bank of Communications, China Merchants Bank) and Hong Kong-incorporated banks (Hang Seng Bank — now HSBC subsidiary, Bank of East Asia).

For most expats, HSBC, Standard Chartered, or Hang Seng are the natural starting points for day-to-day banking. Account opening has become more complex in recent years as AML standards have tightened; be prepared for thorough KYC documentation.

Private banking: Hong Kong has an extraordinary concentration of private banking talent. Credit Suisse (now UBS following the 2023 merger), Julius Baer, DBS Private Bank, UOB Private Bank, and virtually every major European and American private bank maintain significant operations.

Multi-currency accounts are standard; HKD is pegged to the USD at 7.75–7.85 (the linked exchange rate system, maintained since 1983).

Property in Hong Kong

Hong Kong has consistently been the world's least affordable major property market relative to income. Space is extraordinarily constrained — the territory is largely mountains and sea, with development concentrated on a narrow strip of land.

As of 2026:

• Average apartment price in prime areas (Mid-Levels, Peak, Repulse Bay): HKD 25,000–60,000/sqm
• New Territories new developments: HKD 12,000–20,000/sqm
• Rental for a 2-bedroom apartment in mid-range areas: HKD 25,000–50,000/month

Stamp Duty: Hong Kong simplified its property stamp duty structure in 2024. The Buyer's Stamp Duty (BSD) and New Residential Stamp Duty (NRSD) — which had been applied to non-permanent-residents and foreign buyers at punitive rates of up to 15%+, in addition to the standard scale of ad valorem stamp duty — were abolished in February 2024 as the government sought to stimulate a cooling property market.

As of 2026, stamp duty for all buyers (resident and non-resident) is levied at the standard ad valorem rate: approximately 1.5–4.25% depending on property value. This makes Hong Kong property more accessible for expats than it was in the 2013–2024 period.

However, prices remain very high. Most expats rent rather than buy, with rental typically covered (at least partially) by employer housing allowances at senior level.

Investment Environment

Hong Kong's investment environment is excellent for globally diversified portfolios:

• HKEX: The Hong Kong Stock Exchange lists over 2,500 companies. H-shares (Chinese companies listed in Hong Kong) and Southbound Connect (Hong Kong-listed stocks accessible to mainland investors) make Hong Kong the conduit for Chinese equity investment
• Hong Kong-domiciled mutual funds and ETFs are widely available through regulated brokers
• US and global equities are accessible through international brokers (Interactive Brokers, Saxo, and all major banks operate here)
• Bond markets: Hong Kong is Asia's largest dim sum bond market (RMB-denominated bonds issued outside China)

No tax on dividends, interest, or capital gains makes Hong Kong extremely efficient for investment accumulation.

Pensions for Hong Kong Expats

Mandatory Provident Fund (MPF): Hong Kong's statutory retirement savings system requires employer and employee contributions of 5% each (capped at HKD 1,500/month each) for employees aged 18–64. The MPF is not directly comparable to a UK pension — contribution amounts are modest and the investment choices are limited. Upon leaving Hong Kong permanently, MPF accrued benefits can be transferred overseas or withdrawn (subject to the rules of the specific MPF scheme).

UK pension for Hong Kong expats: Maintaining a UK SIPP or continuing contributions to a workplace pension in the UK is advisable for British expats who have meaningful UK pension entitlement. UK pension income paid to Hong Kong residents is not taxable in Hong Kong.

UK State Pension: Hong Kong is a "frozen pension" jurisdiction. It is not in the EEA and has no reciprocal social security agreement with the UK that provides for uprating, so the UK State Pension paid to recipients living in Hong Kong is frozen at the rate first received and does not rise with the annual triple-lock increases. Over a long retirement, inflation can substantially erode its real value — a key planning consideration for British expats intending to retire in Hong Kong.

Estate Planning for Hong Kong Expats

Hong Kong has no inheritance tax or estate duty (abolished in 2006). Assets passing on death in Hong Kong are not taxed. This makes it straightforward to leave Hong Kong assets to beneficiaries.

However, UK Inheritance Tax remains relevant for British nationals. Since 6 April 2025 the UK has moved from a domicile-based to a residence-based IHT system: a "long-term UK resident" (broadly, someone who has been UK-resident for at least 10 of the previous 20 tax years) is within the scope of UK IHT on their worldwide assets, with UK IHT of 40% applying above the nil-rate band. Those who have left the UK can fall out of long-term resident status after a number of years of non-residence, but the position should be checked carefully for your circumstances.

Ensure you have:

• A valid Hong Kong will covering Hong Kong assets
• A UK will covering UK assets, with appropriate IHT planning
• Beneficiary nominations reviewed on MPF, life insurance, and any pension schemes

Practical Considerations for Hong Kong Expats

Air quality: Hong Kong's air quality has improved but can still be poor during winter months, particularly when northeast winds bring pollution from the Pearl River Delta. Consider this for health planning.

Cost of living: Extremely high by global standards — comparable to London or New York. Accommodation, international schooling (HKD 150,000–250,000/year), and food are the major expenses. Employer packages for senior professionals typically include housing and school allowances.

Political environment: The National Security Law and changes to Hong Kong's political landscape since 2020 have altered the operating environment for some professionals and businesses. Freedom of expression and press freedom restrictions are material changes from the pre-2020 position. Individuals should assess their personal and professional circumstances against the current environment.

Financial Planning Checklist for Hong Kong Expats

1. Review UK departure — HMRC notification; SRT analysis
2. Open a Hong Kong bank account and check MPF enrolment
3. Maintain voluntary UK NIC contributions for State Pension if appropriate
4. Review UK SIPP or pension arrangements — UK pension income is not taxed in Hong Kong
5. Consider the Capital Investment Entrant Scheme if eligible and planning long-term presence
6. Arrange international health insurance — Hong Kong's public hospitals are good but private care is recommended for expats
7. Draft a Hong Kong will; coordinate with UK will and IHT planning
8. Keep detailed records of time spent outside Hong Kong (if managing UK SRT position)
9. Establish FX strategy for HKD/GBP management

Compliance Reminder

Hong Kong's tax system is simple but its banking and corporate governance environment has become more complex. UK IHT obligations can continue for British nationals under the residence-based rules in force since 6 April 2025 (long-term UK residents are taxed on worldwide assets). This guide reflects the position as of 2026. Professional advice is essential. Investment and property values can fall as well as rise, including in response to geopolitical developments.

How Global Investments Can Help

Global Investments advises internationally mobile professionals across Asia, including Hong Kong. We provide UK and international pension planning, offshore investment solutions, cross-border estate planning, and tax-efficient wealth structuring for HNW individuals based in Hong Kong. Contact us for a confidential consultation.