Since August 2018 Hong Kong, Macau and Taiwanese (HKMT) residents no longer need work permits to work in mainland China. The State Council made the announcement in July, and in a move towards a more unified China, the Ministry of Human Resources and Social Security has been tasked with simplifying the process and allowing the HKMT residents to more easily seek opportunities in China, and for employers to cut down on the red tape.
Previously, employers would have to submit 10 types of supporting documents, now an employee need only prove they have an employment contract or present a business license. Work permits valid until the end of 2018 can still be used, but employers will need to ensure contracts are correctly in place for existing HKTM residents to stay.
It is yet unclear if HKMT residents will have the same rights or access to the social support system as their Chinese counterparts; although many employers will have private benefits policies that they will now be able to extend to this group.
Employers also need to be mindful of the tax implications of establishing employees in China, and upcoming tax reforms are likely to have an impact, so organisations need to have the appropriate measure in place to withstand the impact of the imminent changes.
It is early days, and so far, we have seen little impact on the mobility of workers. We expect to see the talent pool gradually react as further investment and greater emphasis is put into integrating the economic ecosystem of the Hong Kong-Macau-Guangdong Bay area. However, we remain cautious. Research conducted by the pro-Beijing Youth Power Association earlier this year, found that young Hong Kong workers are not that excited or motivated to make a move to the mainland despite the area receiving heavy investment and purporting to offer unparalleled opportunities, especially in tech.