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Employment Certificate for the Residents in Hong Kong and Macao was Cancelled in Shenzhen Qianhai, to Optimize Business Environment in Guangdong-Hong Kong-Macao Greater Bay Area

03 22, 2018      Source: 21st Century Business Herald

On March 19th, the department concerned in Shenzhen Qianhai has announced that Hong Kong and Macao residents working in the area would be exempted from applying for “Employment Certificate for the Residents in Taiwan, Hong Kong and Macao”. At this point, the "Employment Permit System for the Employment of Taiwan, Hong Kong and Macao Personnel in the Mainland", implemented nationwide since 2005, has been eliminated in Qianhai for the first time. This provides much convenience for the development of Hong Kong and Macao residents into the northern areas and it is also one of the results that the Guangdong-Hong Kong-Macau Greater Bay Area aims to achieve, as well as a necessary condition for in-depth and coordinated development in the bay area.

Resolving Job and Residence Difficulties for Hong Kong and Macau Talents in Mainland

For a long time, Hong Kong and Macau residents have to obtain employment permits before they work in the Mainland, and the procedure for applying for the employment permits is relatively complicated.

Take Shenzhen as an example. Hong Kong and Macao residents need to make multiple trips among multiple departments, which would take at least one week or more. And there are still many restrictions in the processing procedures. For example, the physical examination can only be conducted at the Shenzhen Entry-Exit Inspection and Quarantine Department (the port hospital), and the physical examination certificate has a validity period for only one year.

More importantly, the application for employment permit does not have permanent validity. The validity period of the employment permit is generally less than two years, and it needs to be extened upon expiration. If Hong Kong and Macao residents change their work places in the Mainland, the employment permits for the original work places need to be cancelled, and they need to apply for new employment permits again. After the renewal and change of Hong Kong and Macao resident's home return permit number, it is necessary to re-apply the corresponding change procedures in social security and other systems.

This inconvenience has, to some extent, restricted the enthusiasm of Hong Kong and Macao talents for employment in the Mainland. In 2017, the Guangdong Provincial Committee of the Communist Youth League and the Guangdong Youth Federation conducted a survey on nearly 300 young people from Hong Kong and Macao, showed that as many as 60% of the respondents believed that the procedures for residing and working in the Mainland are too cumbersome.

Lin Zhiying, Deputy Director of the People's Livelihood Policy Research Committee of the Hong Kong Guangdong Youth Association, has been calling for the cancellation of the employment permit. He believes that the employment permit has resulted in two major "troubles": First, enterprises need to assist in the handling of the permit, increasing the burden on employers; Second, the processing time is too long, while the enterprise cannot wait too long before employees obtain the required permits. This means that for the enterprises in the mainland, they will be more inclined to hire people who do not need the application of employment permits if there is another choice.

Shen Minghao, Dean of Guangdong-Hong Kong-Macau Greater Bay Area Research Institute, Guangdong University of Foreign Studies, believes that although Hong Kong and Macao talents are currently encouraged to start working in the Mainland, they are not able to enjoy the equivalent treatments due to institution and mechanism problems. Therefore, the effect of talent introduction is not satisfactory. And this will be an important issue that needs to be solved in the future development in Guangdong-Hong Kong-Macau Greater Bay Area.

Qianhai government has implemented an exemption from the employment permit, trying to eliminate some impedance by the roots. According to this new policy, Hong Kong and Macao residents will not only be exempted from the application for employment permits when they work in Qianhai, but also will be exempted from the pre-examination of employment permits in terms of social security and overseas high-end talent tax subsidies.

In addition, the series of employment facilitation policies for Hong Kong and Macao residents implemented in Qianhai, further include the following contents: allowing Hong Kong and Macao residents to pay housing accumulation funds voluntarily, and enjoy citizen treatment in the payment and withdrawal of housing provident funds, and can enjoy loan rights of individual housing by using housing fund (only limited to self-living); planning to expand the range of individual income tax subsidies and so on.

The above-mentioned two aspects are directly related to the income of Hong Kong and Macao residents who work in the Mainland. Taking a provident fund as an example, if Hong Kong and Macao residents are unable to pay housing provident funds in the Mainland, they will not only be unable to enjoy preferential policies concerning renting and housing purchases, but will also experience a reduced “invisible income” by about 10% compared with the mainland residents.

According to public information, there are currently more than 8,000 foreign talents gathering in Qianhai, most of them come from Hong Kong and Macau. This means that thousands of Hong Kong and Macao residents would directly benefit from these new policies.

From an official point of view, there is no doubt that more Hong Kong and Macao talents are expected and desired in Qianhai. According to Yang Shan, Deputy Director of the Human Resources Department (Human Resources Division) of the Qianhai Administrative Bureau, Qianhai has lowered the entry threshold for more than ten professional talents, including Hong Kong accountants, certified tax agents, and building surveyors, and such lowered profession threshold will soon be expanded to cover the financial and legal talents in Hong Kong and Macau. More and more convenience measures will further promote talent exchanges.