Can I Set Up A Hong Kong Company, Employ My Business Partner & Sponsor An Employment Visa For Him?

The answer to this question is multi-part and ultimately driven by the challenges associated with a New Business Situation…

QUESTION

I am based in Hong Kong and would like your advice on visa applications for a friend.  

A friend of mine, who is based in the US and I have been discussing a business opportunity for Hong Kong and I wanted to know the best way for him to secure a working visa.

We had discussed me setting up the company and then employing him and subsequently sponsoring his visa through the company.

Would that work?

The alternative would be for him to apply for an investment visa as he would be the brains behind the operation.

Please can you let me know which option would be best or which would be more successful?
 
Another friend of mine who set up her own recruitment agency here in Hong Kong said that as an expat setting up a company you are unable to employ someone from overseas for the first year of your business being operational.

Is that also correct?
 
Any light you could shed on this would be greatly appreciated.

ANSWER

Okay, what a lovely question with three particular moving parts that I’d like to address.

The first moving part really relates to your own immigration status. I’m going to take the view that you don’t have an immigration problem to participate in this venture, one way or the other. So, for example, because you have a dependent visa, or because you have the right of abode or unconditional stay or right to land or one of the other two types of immigration status that exists that will allow you to participate in this venture with your business partner. So, I’ll assume that there are no immigration applications that in a sense impact on you, because if you were an employment visa holder working for a third-party employer and you wanted to join in this business, there would be an immigration implication arising for you as well as for your business partner, too. But as I say, I’ll just make the assumption that you don’t have that problem in this mix.

Therefore, turning our attention to the second issue, which is what type of mechanism would be suitable for your partner to secure immigration permissions to be in Hong Kong to carry on this business with you.

Well, whether he applies for an investment visa because he’s got the overwhelming majority of the shares in the business or whether, for example, you decide that you’re going to split the business 50/50 between the two of you, the bottom line is that the Immigration Department will be working with a new company or a new business situation. Whether it’s the investment visa or whether it’s an employment visa, because you only own a smaller percentage of the shares, if it’s a new business situation and invariably it is, because in an investment visa scenario it’s a new business per se, then the Immigration Department will apply the approvability test for the investment visa irrespective of how you go about couching the application, all things considered.

That is, in the new business situation, they look to see that the enterprise can make a substantial contribution to the economy of Hong Kong. So, as I say, this would involve the creation of local employment opportunities, it would involve the establishment of a proper office and you need to ensure that you’ve got both funding resources and operational resources. Those are the types of things that are normally present that are driving you to make this investment in Hong Kong in the first place.

All of these facets of the approvability Stiller’s as I’ve couched it, absolutely need to be present, irrespective of whether he takes an employment visa because only got a smaller percentage of the shares than you or it’s an investment visa because he’s got a clear majority of the shares all things considered.

So, one way or the other, it doesn’t really matter, you’re still going to have to pass the essential elements of the approvability test, which I’ve dealt with elsewhere on the blog. So you should be able to find that information when you go looking for it.

Now, the third piece to this is your own friend, who sets up a recruitment agency, who stated it was her experience that in the first year, per se, you’re unable to employ someone from overseas.

Well, that’s not strictly true. Effectively the Immigration Department look at the bona-fide days of the applicant from the perspective of them being able to show they possess special skills, knowledge and experience of value that are not readily available in Hong Kong and that no local person can be expected to do that job. But again, it doesn’t matter the age of the company, if the company is properly resourced, and if the three legs of the approvability stool are all in place, it doesn’t matter the age of the proposed sponsoring entity. If is it a suitable and credible sponsor given the nature of the activities that are going on and the level of resources and availability of local staff to support that business, too.

So, Immigration Department look at it from 39,000 feet. There’s certainly no blanket preclusion that say in the first 12 months, there’s no chance of employing foreigners. It just depends on how strong and well established the business is at the time they make the application.

Okay, I hope you found that useful!

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