Employee Compensation Insurance or EC Insurance is a liability cover specific for businesses with hired workers. This is mandatory in Hong Kong for all businesses.
According to Section 40 of the Employees’ Compensation Ordinance, Chapter 282 of the Laws of Hong Kong, no employer shall employ any employee in any employment unless there is in force a policy of insurance to cover their liabilities both under the Ordinance and at common law for injuries at work in respect of all their employees, irrespective of the length of employment contract or working hours, full-time or part-time, permanent job or temporary employment.
This ordinance also applies to domestic helper insurance but will vary in cost and coverage.
An employer who fails to comply with the Ordinance to secure an insurance cover commits an offence and is liable on conviction to amaximum fine of HK$100,000 and imprisonment for two years.
MUST-KNOW FOR EMPLOYERS
- Minimum insurance cover
- Full cost of insurance CANNOT be deducted from your employees’ earnings. A breach in this ordinance makes the employer liable to a fine of $10,000 and 6 months imprisonment.
- When you add more employees to your business, make sure you contact your insurance provider to discuss any adjustments.
- Ask if the Employee Compensation Insurance covers subcontractors. You are not required to take out a policy for them as there is another type of insurance they can arrange for themselves. You can read our blog about being an expat contractor in Hong Kong here.
- Take note of sick leaves and medical expenses in case an employee is injured during work.
Some information for Employers and Employees
Employee Compensation Insurance covers the following:
- medical care from injury or illness
- replacement income (start date may vary)
- costs for retraining
- compensation for any permanent injuries
- benefits to survivors of workers who are killed on the job
- policy does not cover pain and suffering
- some policies can cover long term and permanent injuries
- volunteers workers may also be covered by some policies
Once an employee makes a claim, they forfeit any chances of pursuing a legal complaint against the company.
FOR A QUOTE OR MORE ANY QUESTIONS ABOUT THIS INSURANCE, FILL UP THE FORM HERE: Employee Compensation Insurance Quote
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Ask us how we can help your business with the proper insurance cover.
Hong Kong continues to be one of the best places for expats to set up business. Technology, commerce, and finance are the top industries that have successfully thrived for 2016. Usual practice for expats is to hire an agency to handle all the paperwork. This is easy and convenient for expats since they won’t need to be in the country while processing everything.
Below is updated information on how to open your business in the country.
If you’re hiring an agency, you’ll need to pay the agency’s fee and submit the name of your company. The agency will then check whether the name is available in Hong Kong or is already taken.
Next, send a copy of your passport, a copy of an official document as a proof of your residence (for instance, a driver’s license) and a questionnaire with standard questions such as your address, your passport number and the name of the director and shareholders (if you plan to open the company alone, you can be both director and unique shareholder) to Hong Kong.
For a simple company structure, which unless you have special requirements shall be enough, your agency will setup your company via E-registration, which takes less than two hours, to get the brand new company’s certificate of incorporation and business registration certificate upon certified the relevant parties’ passport online, for instance via Skype
Note that in the past, expats were allowed to open a Sole Trader Company in Hong Kong without owning a resident permit. This is no longer allowed unless you’re planning to stay in Hong Kong or have the option of opening can a Limited Company.
The incorporation documents and company kit (seal, stamp and so on): about 2,070 HKD (if planning to approach an agency
The Company Registration (Government fee): 1,730 HKD.
The Business Registration Certificate (Government fee): 250 HKD.
The Provision for the Company Secretary: 3,500 HKD
The Provision for the Registered Office Address: 2,000 HKD.
You will also need to open a Hong Kong bank account which is fairly easy to do on your own once you get in the country. HSBC and Hang Seng Bank are the popular choices among international businesses.
OTHER IMPORTANT NOTES:
Hong Kong has a straightforward tax system: your company will pay 16.5% of taxes on any profit generated in Hong Kong and nothing otherwise (as long as you apply for off-shore status).
The required registered capital in Hong Kong is much smaller than in the majority of countries (only 10,000 HKD). This makes it ideal for start-ups who have smaller margins to work with.
We also recommend subscribing to Liability Insurance as well as other crucial covers such as Employee Compensation and Office Insurance. Village Insurance Direct is one of the go-to agencies that helps expats find affordable and comprehensive insurance for business.