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Living in Hong Kong ain’t cheap, that’s for sure…

QUESTION

I’m an Australian and British citizen currently living in Australia and I want to found a technology Startup company in Hong Kong because the government incentives seem very attractive to do so.

The downside is that housing is ultra-expensive in Hong Kong and paying this will deplete my resources far quicker than I’d like, effectively nullifying any government incentives and then some!

Is it possible to live over the border in Shenzhen, travel into Hong Kong everyday for work, still be employed by my Hong Kong company and take advantage of all the benefits that are bestowed on it?

I’m likely to be doing significant business with the mainland, so need an option that allows me the flexibility to cross the border often without too much impediment while staying on the right side of the law!

ANSWER

Great question and I am very grateful for you asking it. And I have to say there are a lot of moving parts and I’m not certain by the time I get to the end of this answer, you’ll be particularly enamoured with the answer. However, effectively, you have got two challenges.

Firstly, you need to be lawfully employable in your own business in Hong Kong – that’s challenge number one. And then secondly, you need to, once that’s out of the way, independently go and secure permissions to live in China. Now, I’m not an expert by any means, in China immigration, so I don’t have any value to add in respect of how you might go about gaining lawful residency in China. You’ll need to speak to a Chinese immigration practitioner in relation to that, but kicking off with your need to be lawfully employable in your own business in Hong Kong, you’ll need to do this for two really good reasons. One commercial and one legal. You absolutely need to be compliant with Hong Kong immigration law if you intend to establish a new business in Hong Kong.

And therefore you’ll have to make an application for a business investment visa, because that’s the immigration status that applies in your circumstances. And running aligned with that is your stated intention to seek to take advantage of government incentives. I don’t have any comment on how generous the incentives in the startup scene actually are, in fact; but I do believe, and understand that, if you are going to participate, or seek to participate in such schemes, there will be an expectation that you are in possession of the correct immigration status to be able to do so. So that does firmly put you in the hands of the business investment visa, which I’ve dealt with ad nauseam elsewhere on the site, so I don’t propose to go into the detail of that for your question.

So, effectively, once you have been able to pass the approvability test for an investment visa, you turn your attention to China, as I’ve said. And, once you’ve been able to turn your attention to China and you get the permissions there that you need, the third and the penultimate challenge will be the daily grind across the boundary as you commute.

It’s certainly doable and lots of people do every single day; it’s not something that I would have particularly be looking forward to, but then again, having never lived in China, there may be charms of China that make it all worthwhile, notwithstanding the daily shuttle across the border.

So, effectively, once you have secured both your investment visa for Hong Kong and also your residence permissions in China, and you’ve grasped the nettle of the the Shenzhen shuttle, as it were, the next thing that you’ll have to sort of anticipate in all of this is what happens come the time of your extension application for your first investment visa extension, which comes twelve months after the initial grant.

It’s perfectly okay to spend a lot of time in China. Of course, many, many people do, as I’ve said, they work in Hong Kong, or indeed they live in Hong Kong and work in China, and it isn’t unusual for people who are ostensibly based in Hong Kong to spend a lot of time in China.

So the Immigration Department, at the time that they extend your investment visa, they may look to see why you’ve spent so much time in China. That is, at least why you’ve spent so much time outside of Hong Kong. It may or may not present itself as an issue, but the reason why I raise it is that there are two privileges that go with an investment visa: the first privilege is to actually join in the business, and the second privilege is the privilege to reside. And you may be getting down into a bit of a rabbit hole if you say to the Immigration Department that, well, yeah, you work in Hong Kong, but you live in China; I don’t know what their response to that reality might be in terms of their ongoing willingness to grant you an extension to your investment visa, because the implication, in my experience, is that you both live and work in Hong Kong. But given that you are seeking specifically to live in China, yet work in Hong Kong, it seems to me that only 50% of the criteria for the grant of the visa are present in your case, that is, the need to join in your business in Hong Kong. And the fact that you’ve chosen to live in China is a bit of an open question for me.

So I’m not quite sure what the Immigration Department would make of it, but there you go, as I say, lots of moving parts. Great question, perfectly reasonable question. I understand, you know, your thinking behind all of this, but I hope you found these particular elements of the answer in the discrete or collective ways useful to you.

Okay, all the best.

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