Hong Kong is seeing a resurgence of interest from expatriates, with more than 120,000 new migrants arriving in 2025 to work or start businesses. This influx is partly driven by the city's low tax environment, including a progressive salaries tax starting at 2% for the first HK$50,000, and additional tax benefits like rental reimbursement schemes that can significantly lower taxable income. The government also offers a "personal assessment" mechanism to combine multiple income streams for a single, potentially lower, tax bill.
Two key government initiatives, the Top Talent Pass Scheme (TTPS) and the Enhanced Supplementary Labour Scheme (ESLS), introduced around 2023, are significant drivers of this return. The TTPS, aimed at high earners and graduates, has approved over 68,000 applications since late 2022, with 95% of these approvals going to mainland Chinese individuals. Similarly, 97% of the over 46,000 permits issued under the ESLS for semi-skilled workers have also gone to mainland Chinese. These schemes have contributed to a substantial increase in financial assets under management, which grew 2.1% to HK$31 trillion ($4 trillion) in 2023, with net fund inflows tripling to nearly HK$390 billion last year.
While the return of overseas hires is boosting the luxury rental market, leading to tighter housing supply, the influx of mainland Chinese workers has created tension in the local job market. Local job seekers are reportedly facing increased competition, and some employers are being penalized for prioritizing cheaper foreign labor over suitable local candidates. The government, however, maintains its principle of prioritizing local workers and conducts inspections to ensure compliance, recently banning a cleaning firm and a restaurant from hiring imported workers for violating these policies. Despite these tensions, the talent schemes have proven successful in attracting individuals, with one in two TTPS visa-holders applying to extend their stay in Hong Kong.
