Posted by
ck112
14 yrs ago
This might sound stupid from the subject, but I've actually just arrived in HK. However, I will be here on a short-term contact for around 3years, and plan to regularly put aside and invest some cash (with the odd lump sum).
As HK is very favorable in regards to tax benefits in general. I'm trying to work out what the best way to invest spare cash here is, that might be able to take advantage of the HK tax system over the next 3 years and also in the future. I guess a key question is, could there be any advantage to leaving any investments here in HK, after I've left?
(Assume after 3 years I will be moving back to Europe, likely UK.)
Don't bother mention offshore long term investments plan (have done the research and am not interested), and am not talking about MPF's.
Am interested to hear thoughts on the best way people would approach short term investing in HK, from people more financially savvy than myself.
Any thoughts? CK.
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I wouldn't go to a bank and ask for advice. Banks make money per transaction, and their incentive is to make you move your money around as opposed to make it grow.
I would get a good investment management firm which is independent of banks or funds (this is important), and which is paid based on the size of your invested capital. Make sure your advisor knows you want to make short term investments.
It can be a good idea to leave investments in HK when you leave. If nothing else, if you have a good manager here, that firm can keep serving you well.
I recommend the Henley Group.
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If you decide to leave assets in Hong Kong, do not assume that you can hide them from the taxation authorities in your home country. The way technology is advancing, it is better to assume that everybody knows everything about your affairs.
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Good point woods99. Assume the home country knows. I would say that you should keep the investments in HK based primarily on having good management, not because you can hide them.
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ck112
14 yrs ago
Thanks for the reply's and defiantly a good point on the taxation, and isn't my plan to be hiding am just working out what could work out best in the long run.
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I would leave your investments in HK after you leave because:
1) there's no capital gains tax or dividend tax (tho' as mentioned above look at how your home country deals with this)
2) it gives you much better access to investments in this part of the world which is expected to grow much faster than Europe. E.g. you could buy Chinese stocks listed on the HK Stock Exchange
Three years isn't much time to invest. Unless you want to do it yourself I'd also suggest finding yourself a good independent financial advisor.
From what you say there's only one product on the market that looks to suit your purposes as it's got no lock in period and doesn't have any penalty charges or exit fees. What's more it's got lower fees than a lot of other products out there.
Private message me for more details.
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Depending on the sum of initial investment, there are several options. Many firms have initial lock-in periods of only 18-24 months.
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Just to clarify, when I mentioned 'no lock in period' above I meant you can take all your money out without penalty or charge at any time.
That's not to be confused with other products where you are locked in to paying into them for 18-24 months or longer and you can't take all your money out until years later without getting hit by heavy early redemption fees.
Just wanted to make that clear.
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Thanks for clarification. However in both cases you mention, there are products that allow you to take all your money out with little or no penalty after 18-24 months.
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Thanks for the clarification too axptguy38. Hope that's clear to the other readers.
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ck112
14 yrs ago
Thanks for the thoughts and know that 3 years isn't much time which is why I was asking what might be best to do in HK given that short time period.
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If you do not have lots of time to follow events plus some experience, I would not recommend trading by yourself.
And why limit yourself to local stocks when there are commodities, stocks in other markets and so forth? A good adviser can open up markets that you would not reach on your own.
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Good points raised by woods and axptguy regarding the tax implications of your home country. Assuming (and this is a very important assumption) the UK personal income tax works in similar ways to the Canadian tax system, unless you qualify as a non-resident of the UK, many of the benefits of the tax system here in Hong Kong is almost irrelevant. In fact, it may even end up being worse if some of the 'taxes' that you pay here may not eligible as credits when filing your UK tax return.
Tax application will have a significant impact on your investment decisions. If the tax system works the same way and you are still regarded as a resident of the UK, then investing in Hong Kong while you are in Hong Kong is almost no different than investing in Hong Kong while you are in the UK.
(I would have to do a little research to verify some of what I have 'assumed' above.)
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Just did some quick reading and it appears that the UK tax system is a little easier and provides more clear guidance on becoming a non-resident compared to the Canadian tax system.
Also, from what I have read, the 'around 3 year' period is a significant threshold.
You should certainly get some advice from an expert in UK tax legislation. I am pretty sure there is a tax treaty between the UK and Hong Kong. That will have some significance to how your investment income will be handled.
HTH.
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