The Gig Economy of Hong Kong

The gig economy and the corporate world

There is a rapid and radical change in the corporate labor force than ever before 2015. Very short-term contracts, flexible hours, and contingent freelance workers are increasingly being adopted. These changes taken together with smart machines, drones, and robotics are changing the workforce. In turn, more and more people are concurrently holding multiple jobs.

Unfortunately, Hong Kong’s labor law seems more rigid on the current job and work structure. The labor law does not take into consideration the fact that most organizations are considering short-term workers and freelancers. Such workers are subjected to review from law enforcement agencies when they shift from one position or work to another.

If you are looking forward to working with larger companies, then you should incorporate your company since giant institutions prefer working with corporate entities compared to individual freelancers. Besides, incorporation will help you propel your brand to a higher level of professionalism. We, at Paul Hype Page, have experience in incorporating companies. We will help you with the process, along with filing your tax returns in accordance with the IRD requirement.

Further, incorporating your company will benefit you when filing taxes. Our consultation services will aid you to file all your taxes to ensure smooth business operations in Hong Kong.

Legal Issues and Pitfalls of Engaging Contingent on-Demand Workers in Hong Kong

• Independent contractor and misclassified employees

  To differentiate an independent contractor from a long-term employee in Hong Kong, several key factors need to be considered. First, examine the level of control the organization exerts over the individual. Next, assess how integrated the individual is within the company. Check if the company is obligated to provide work to the individual. Determine if the individual runs a personal business. Evaluate if the individual manages their own schedule. Lastly, consider if the individual assumes their own financial risks.
  For example, a Hong Kong labor court might dismiss “an independent contractor” if the relationship between the company and the worker is one of that exists on the employment contract.
  If an employer misclassifies an on-demand worker as an independent contractor instead of a staff, it may lead to disputes over MPF contributions, vacation pay, severance pay, and employees’ compensation. A company might face criminal conviction or criminal penalty.

• Record-keeping
  

  According to the Minimum Wage Ordinance of Hong Kong, the minimum wage rate is HDK 37.50 per hour. Many companies find it challenging to keep track of hours casual workers have accumulated to comply with said requirements. In Hong Kong, any casual workers who have worked 18 hours or over per week for a month are considered continuously employed by law. They will be entitled to at the minimum of 1 day off every week or paid statutory holidays and vacations. However, it is awfully hard to track how many hours these casual workers have worked each week in reality.

• Contract drafting & holiday pay issues
  

  On many occasions, employers assume that the remuneration of contingent on-demand workers covers holiday pay. However, in Hong Kong, it is a criminal offense chargeable in court if an employer fails to pay an employee their due statutory holiday pay.

The Setbacks of the Gig Economy in Hong Kong

There is a higher risk of unemployment, lower employment income, and more inferior labor benefits and protection.

The Future of the Hong Kong Gig Economy

Large corporations have agreed that a blended workforce facilitate them become more agile, quickly meet changing market and consumer demands, and in so doing, they better manage their finances. These companies in critical industries contribute significantly to the national Gross Domestic Product (GDP).

Regulatory agencies are also working to ensure that there exist equal employment rights and protection. This economy is set to continue growing and may soon become the new workforce dynamic. The future is wide open, and there is no doubt that Hong Kong can be at the forefront of the world’s gig economy.

Basic Requirements to register office branch in Hong Kong

If you want to bring the presence of your foreign company in Hong Kong through a branch office then you will need the following;

1. Name

The name of the proposed branch office should match the name of the overseas parent company. However, it is still possible for the Hong Kong Companies Registry to disallow the name in the case that the name of the parent company is already in use by a different company in Hong Kong or if the name is deemed as improper or misleading. That implies that the first step is to conduct a name search to help determine the authenticity of the name.

2. Officers

A branch office in Hong Kong needs to appoint at least one person who is a resident in Hong Kong and allowed to receive legal notices that are being served to the company. The authorized representative can either be a corporate body or an individual who is qualified to accept legal notices. Paul Hype Page can act as an authorized firm for your branch office activities.

3. Physical place of doing business

A branch office needs to establish a physical location where it will execute its administrative duties. The place must be a physical location where the company stores its statutory documents among other legal documents.

4. Constitution and Activities

The company’s structure and its activities are directed by an overseas parent company. As such, this implies that the branch office will use its Memorandum and Articles of Association (MAA). Therefore, a branch office will be operated in accordance with the constitution of the parent company.

5. Required documents for the registration

When registering a branch office in Hong Kong, you will require the following documents;

• A duly filed form that captures the details of the branch office you are about to register in Hong Kong. Such information includes registered address, local representative, particulars of the parent company, among other essential company details.
• A certified copy of the parent company’s constitution that is the Memorandum and Articles of Association for the parent company.
• A copy of the Registration Certificate of the parent company.
• Identification documents of the proposed local branch office.
• The latest accounts documents of the foreign company whose branch office is intended to be set up in Hong Kong.

The Procedure of Registering an office branch in Hong Kong

Foreign companies need to engage professional firms when they want to set their branch office in Hong Kong. The good news is that Paul Hype Consultant services are such a branch professional firm that has experience in setting up such branch offices. It is also a requirement that the branch office applies for registration within a month of establishing a physical place of doing business in Hong Kong. The two simple steps that are involved in setting up a branch office in Hong Kong is:

1. Approval of the Company Name

The name of the branch company that is to be set up in Hong Kong needs to be the same as that parent company’s name. The name will generally be approved unless it;

• Infringes the trademarks
• Is offensive or contrary to Hong Kong’s public interest
• Is similar to the name of another company that is already incorporated with the Hong Kong Companies Registry

2. Application of the Branch Office Registration

The second step after approval of the proposed branch office name is to submit the necessary registration documents to the Companies Registry. If the name approval was successful and all the required documents presented as required by the companies registry offices, then the approval of registration follows immediately, and the Certificate of Registration of the Non-Hong Kong Company is issued immediately. The certificate must be collected physically at the Companies Registry offices. However, if the presenter sends another party to collect the certificate, then they must send them with a well-written authorization on the same.