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MPF - Do I need it?

  1. #1
    MXZ
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    MPF - Do I need it?

    Hi guys,

    I've been looking to get MPF sorted, but the two banks I've spoken to about MPF (HSBC and BEA) have both said that I'm exempt. I explained that as a person here on a dependent visa looking to stay indefinitely that I was required to contribute - and they looked at me as if I was nuts.

    On the HSBC website it says exempt people include:

    people from overseas who enter the Hong Kong SAR for employment for less than 13 months, or who are covered by overseas retirement schemes

    That would suggest that I don't need MPF as long as I'm covered by another pension somewhere else. However I remember it being discussed on this board that that was no longer the case...

    So... Do I need MPF? If so, any suggestions as to who I should sign up with? If not, any suggestions on where I can arrange an offshore pension scheme instead? :-)

    Thanks in advance!

  2. #2
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    I think it's a bit of a grey area. The official rules are on the site of the MPFA but it isn't clear what constitutes an acceptable overseas pension scheme. I didn't pay MPF when I was employed by a UK company but on assignment here because that company and I paid into a UK-regulated defined benefits pension scheme. When I then went to a local employment my contract had a "pension contribution" (paid to me) written into it, and I produced for the payroll people proof that I was paying into a savings scheme more than that (and more than I would have to pay into MPF). This isn't a savings scheme that is regulated as a pension (I could get the money out again any time, albeit with some small penalties) but it seemed acceptable to them.

    What is clear is that once you become a Permanent Resident then the overseas retirement scheme exclusion no longer applies, and you must pay MPF.

  3. #3
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    Are you currently working? My understandig is if you are a foreigner on a work visa then MPF contributions should commence after 13 months of employment in HK. The standard contribution is 5% of your mthly income, capped to a max. of HKD1000 (mandatory contribution), by both the employer and employee. However, for larger companies or western companies, the contribution could be more generous and thus higher than the legal minimum (voluntary contribution).

    However, MPF accounts should be set up by the company, not by you as an indiviudal.

  4. #4
    MXZ
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    Hi,

    I'm self employed in that I do contract work, mostly for companies in the EU and US. I do very little work in HK itself apart from the fact that I live here so I don't work for a HK company or anything like that.

    I will try contacting MPF directly for advice, but I thought it would be best to get the solid opinions of the board first so at least I have a vague idea what I'm talking about.

  5. #5
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    have you ever paid TAX in Hong Kong ? if Self-employed and your annual income is less than 100K/108K, you don't need to pay any MPF.
    if you plan to continue in HK more than 13 months better join MPF scheme...mine is with BCT www.bcthk.com

  6. #6
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    Quote Originally Posted by ghkg
    have you ever paid TAX in Hong Kong ? if Self-employed and your annual income is less than 100K/108K, you don't need to pay any MPF.
    Not true. The minimum threshold for MPF is $5,000/month. Tax and MPF are completely separate things.

    See MPFA Contributions and other pages on that site for more details.

  7. #7
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    sorry , it was typo..you have to pay the MPF 5% of your income but can select the option basic allowance 108K/100K...or according to TAX you paid for the profit amount , or maximum income with contribution 1000$...it is related to TAX..

    MPFA FAQs

  8. #8
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    if self employed and don't want to pay maximum cap amount 1000$ as contribution you will be requested by the MPF trustee to submit the income tax return proof