To succeed in business in Hong Kong, it is vital to have a solid understanding of the country’s business culture. Hong Kong business culture reflects highly significant values of Asian culture – the significance of keeping face, a strong deference for seniority and age, and hierarchical relationships. This, however, is complemented by increasing modern-day and Western characteristics, such as an international mindset and an increase in value of foreign investors.
As a global PEO (Professional Employment Organization) it is our goal to be familiar and updated with the business culture in the country we work with and in. By sharing our knowledge about the Hong Kong work culture, we want to support your global expansion plans. Therefore, we will address all the aspects of the work culture in Hong Kong to start your expansion well-informed.
The work culture in Hong Kong
The high value placed on intellectual efforts, a person’s leave of education and proficiency in English can heavily influence an individual's social standing in Hong Kong. Politeness and respect is also important in relationships with locals, so conservative manners are the norm.
There have been recent changes and awareness around the world concerning the importance of work-life balance and flexible working, but Hong Kong’s business culture places significant importance on business etiquette and face-to-face interaction. Here are some tips and tricks to use during your first few months:
- Punctuality: Punctuality is expected and respected – it is best to be on time for all appointments. It is also respectful to allow some courtesy time of up to 30 minutes if someone is late. If you are late, you must have an explanation as to why.
- Languages: Knowledge of English is prized in Hong Kong, but a knowledge of Cantonese or Mandarin can also go a long way.
- Hierarchy: Hierarchy is an influential part of business relations in Hong Kong. Senior members have a larger role in meetings and negotiations. They must also enter and leave the room first, as well as be addressed first or before junior members.
- Introductions/Greetings: The culture in Hong Kong has adopted the Western greeting style of a handshake as the norm – to be accompanied with a nod and direct contact. The handshake is to be light, and senior members might also lower their eyes during the greeting. A person is to be addressed by their title and surname.
- Gift-giving: When giving a gift to an associate or business partner, give the gift in the bag of the shop that it came from – brand names are important in Hong Kong. The gift might be refused at first, but it is best to keep offering, as it is considered rude to accept a gift on the first offer.
There are also gifts to be avoided – blankets (believed to decline prosperity), clocks (connote death), handkerchiefs, sharp objects, and anything that contains the color black, blue and white, as well as anything that is not beautifully wrapped.
- Dress code: In Hong Kong, the dress code is fairly conservative. In Chinese culture, colors have different meetings, so it is necessary so be aware of these meanings when choosing what to wear.
Dark and neutral colors are preferred – and for any professional setting, formal attire is best as it connotes professionalism. The formality of the dress code depends on the industry, however. In industries such as marketing, advertising and fashion, more casual attire is acceptable.
- Relationships: It takes time to build relationships in Hong Kong. Calls and face-to-face meetings are vital to the success of your relationship-building with your associates. Showing interest in your business relationships is deemed considerate and is highly favored.
- Meetings: Make appointments for a meeting a month in advance. The meeting style is honest and quick, and it may take several business meetings in order to accomplish your goals.
Tea is also served at meetings and plays an important role in meetings. Do not start drinking until your host takes the first sip. When the host leaves his teacup untouched, this signals the end of the meeting.
- Communication: Communication in Hong Kong focuses on politeness and saving face. Communication is more indirect, with underlying meanings in their speech. Laughter is soft, and direct refusals or disagreement are never given.
Silence is a useful tool of communication in Asia. Pausing before a response indicates that they are applying an appropriate thought and consideration to what has been said, which signifies respect. Silence can also indicate hesitation, so it is best to look for other cues and implicit meanings in their speech to confirm this.
Citizens of Hong Kong also tend to be reserved in physical touch, and do not tend to make intentional body contact such as hugging, kissing or patting on the back.
Hong Kong Minimum Wage
In February 2021, the Hong Kong Government announced that the statutory minimum wage (SMW) rate will remain at HK$37.50 per hour from 2020, and will remain so until April 2023, pending the next wage review to be conducted in October 2022.
Probation in Hong Kong
There is no set probation period in Hong Kong, as this depends on the employment contract, job type and company. A probationary period usually lasts from 1 to 3 months, and in some cases, even 6 months.
The termination notice for the probationary period is commonly no less than 7 days.
Working Hours in Hong Kong
Working Hours in Hong Kong vary according to the agreements in the contracts, but are commonly between 40-50 hours per week, with at least one rest day for every 7-day work period.
Overtime in Hong Kong
Hong Kong labor law does not have specific requirements concerning overtime work and payments. However, overtime is at the employer’s discretion. If the contract states that overtime payment will be provided, then employers are legally obliged to do so.
Overtime payments, however, are commonly paid at the same rate of normal pay.
Notice period in Hong Kong
Notice periods for employment termination cannot be more than 7 days but is commonly practiced as one month – although this can vary according to the employment contract conditions.
Redundancy, Termination / Severance in the Hong Kong
In the case of termination, both employees and employers must send in a notice, which varies according to the contract conditions and the length of employment.
Common practice is one month’s notice. However, both the employer and employee can terminate the employment contract immediately and without pay in cases of serious misconduct.
Severance payments are given to employees upon termination or redundancy, at the rate of the daily full wages of the employees, if they have been working for the company for over 24 months. In cases of long-service employments, or employees who have worked in a company no less than 5 years under a continuous contract, they are entitled to a long service severance payment.
Both types of severance payments cannot exceed HK$390,000.
Pension Plans in Hong Kong
Hong Kong uses a three-pillar pension system for employees to make pension payments, which include:
- A publicly managed and tax-financed social safety net
- A mandatory, privately managed, and fully funded contribution scheme
- A voluntary personal savings and insurance.
The second pillar is most commonly known as the Mandatory Provident Fund system, and in regulated by the Mandatory Provident Fund Schemes Authority. There are 3 types of schemes – the master trust scheme, employer-sponsored schemes, and industry schemes. The first type is the most common, whereas the second and third depend on the type of company and sector.
5% of the average monthly wages must be paid monthly to the fund by both the employer and employee and is saved or invested in for future retirement.
Public Holiday in Hong Kong
Employees can enjoy 12 days of statutory public holidays, which include:
- 1st of January
- Chinese (Lunar) New Year’s Day and an extra two days after it
- Ching Ming Festival
- Labor Day – 1st of May
- Tuen Ng Festival
- Hong Kong Special Administrative Region Establishment Day – (1st July)
- the day following the Chinese Mid-Autumn Festival
- Chung Yeung Festival
- the National Day of the People’s Republic of China (1st October)
- Chinese Winter Solstice Festival or Christmas Day (employer must choose one of the two)
If a holiday takes place on the same day as a rest day, the employer must appoint an alternative and appropriate day for the holiday benefit. Holiday Pay is entitled to employees who have worked under a continuous contract for no less than 3 months and is no less than the average daily wage of the employee.
Sick Leave in the Hong Kong
Employees under a continuous contract are offered two types of pay for sick leave – paid sick days and sickness allowance.
Paid sick days are an entitlement, which starts at 2 paid days in the first year of employment and increases progressively according to length of employment.
Sickness allowance is an added benefit given to employees by their employers under the following conditions:
- sick leave taken is not less than 4 consecutive days,
- sick leave is supported by a medical certificate, and
- the employee has sufficiently accumulated paid sick days.
Sickness allowance is a daily payment for eligible employees which is counted per day of sickness leave, and should be no less than 4/5 of the average daily full-wages earned by the employees in the last 12 months of employment.
Sickness allowance should be paid no later than the employee’s pay day.
Vacation / Holiday in Hong Kong
Paid Annual leave is granted to employees every year under a continuous contract and after 12 completed months of service. The number of days increases progressively in parallel to the number of completed length of service periods, as follows:
- 1st and 2nd years: 7 days per year
- 3rd - 9th years and onwards: From 8 days to 14 days per year (an annual increase of 1 day per year).
The annual leave pay day rate should be the equivalent of the average daily full-wages earned by an employee in the 12-month period that precedes the leave dates, and should be paid to the employees no less than one working day after the period of annual leave taken.
Maternity/Paternity Leave in Hong Kong
Maternity leave is no less than 14 weeks (which was increased from 10 weeks in December 2020), with additional leave granted in the case of illness/disability due to the pregnancy or childbirth. Maternity Leave is also granted for miscarriages at or before 24 weeks of pregnancy.
Maternity leave should be taken either 2 weeks or 4 weeks before the expected date of childbirth, and should send notice to the employer in advance, as well as receive an agreement.
Apart from being employed under a continuous employment contract, eligibility for maternity leave pay is granted if the period of employment service is not less than 40 weeks before the start date of scheduled maternity leave.
The daily rate of maternity leave pay must be no less than 4/5 of the average daily full wages earned in the last year. The additional 4 weeks’ pay will be charged at the same rate but will be capped at HK$80,000. This will be paid by the government on a reimbursement basis through an administrative scheme.
Paternity Leave is 5 days and is only eligible for the pay if they have been under a continuous contract for no less than 40 weeks before the start of the scheduled paternity leave. Paternity allowance is 80% of the employee’s average daily wages.
Bonus in Hong Kong
Common bonuses in Hong Kong include a 13th month payment, which is either paid as a Christmas or Lunar New Year bonus. Other bonuses apply but vary according to the contract conditions and are at the employer’s discretion.
Car allowance Hong Kong
Car allowance is used in Hong Kong but varies according to the company sector and is seen more as a fringe benefit. Housing allowance is most popular of these benefits.
Learn more about business opportunities in Hong Kong
To expand into Hong Kong fruitfully, an understanding of the local business culture is vital for your business’ success. With Bradford Jacob’s expertise and knowledge of employment through our Professional Employment Organization (PEO), as well as our experience with Hong Kong customs, law, compliance, and tax regulations, we can assure the recruitment of the right people to make your expansion goals a reality. Contact us to find out more!