Consultant Work In Hong Kong - Advice Needed

[Clip_My_Wings]

Hi Everyone ....

i need advice about my job situation. i am currently working as a contractor for an investment bank in the uk. There is an opportunity for me to run a global it cost allocation project out in asia based in Hong kong. However to do so for visa purposes I will be required to be a consultant and set myself up as company, invoicing the bank for my services and expenses.

Has anyone had any experience of such a contract?

What would be the implications with regards to tax?

Is there companies in hong kong which specialise in aiding this process (sunbelt asia can you be of assistance?)

what kind of salary expectations should I ask for i mean does anyone have comparable rates for such work. - i would need to cover accomodation/ health insurance/ living expenses ect.

any advice would be greatly appreciated.

Thanks

Edited December 20, 2005 by Clip_My_Wings

[Prakanong2005]

Hi

You might want to start here

http://www.contractoruk.com/overseas_guides/index.html

[Prakanong2005]

This site gives an indication of contract Rates plus locations

[Prakanong2005]

Comparison of Hong Kong and the UK with regard to Tax (IR35 and all that)

http://www.tax.org.uk/showarticle.pl?id=412

[Clip_My_Wings]

Comparison of Hong Kong and the UK with regard to Tax (IR35 and all that)

http://www.tax.org.uk/showarticle.pl?id=412

<{POST_SNAPBACK}>

thanks for the information ...

do you know of any umbrella companies based in hong kong??

[Prakanong2005]

Hi

Sorry I do not know any umbrella company's in Hong Kong.

I use one out of Luxembourg - they do not have fact sheets on Hong Kong but they may be able to help you - email them or give them a call as it can do no harm

http://www.connexion.lu/noc_country_fsheets.php

The good thing about this is part of your money is paid offshore to Lux as well as a smaller living allowance into the host country so being tax efficiaent so to speak.

[The_Moog]

Take the salary you'd ask for in Thailand.

Multiply it by 3

then divide by 5.

That should be the HK$ salary you ought to ask for.

[Clip_My_Wings]

Take the salary you'd ask for in Thailand.

Multiply it by 3

then divide by 5.

That should be the HK$ salary you ought to ask for.

<{POST_SNAPBACK}>

very funny moog ...

i was thinking about taking my uk salary and multiplying by 1.5

i would take a slary in thailand they couldn't afford me.

[Prakanong2005]

Well you should go for a salary increase with each contract renewal - well at least the first few.

The Agency may have found the position but its you they want to keep ;-)

Are you talkng about a salary or contract rate in the UK you wish to multiply?

On expat positions in the permie world it can be 25% allowance on top of your salary plus housing allowance (and all the schools etc for married positions etc).

Going 1.5 a UK contract rate is not being unreasonable if they want you to move but if you were just going for it off your own back you will have to look at rates for similar positions in HK.

Contract rates seem all over the place to me at the moment!

[The_Moog]

It sounded a complicated formula, but actually it was no joke.

I'm saying multiply by 3 as the cost of living is expensive compared to Thailand.

The division by 5 is simply the HK$/THB exchange rate.

Thats for Thai migrants.....

Anyway, if you're coming from UK, its obviously different.

Accommodation is expensive here - bank on GBP 2000 per month. However taxation is just 15%.

1.5x UK salary is ballpark, yes.

Edited December 21, 2005 by The_Moog

[Clip_My_Wings]

It sounded a complicated formula, but actually it was no joke.

I'm saying multiply by 3 as the cost of living is expensive compared to Thailand.

The division by 5 is simply the HK$/THB exchange rate.

Thats for Thai migrants.....

Anyway, if you're coming from UK, its obviously different.

Accommodation is expensive here - bank on GBP 2000 per month. However taxation is just 15%.

1.5x UK salary is ballpark, yes.

<{POST_SNAPBACK}>

Thanks moog .. sorry i thought you were suggesting a salary less than that to be earnt in thailand ..

well the situation im is im currently contracting for 1 and a half years in uk for an investment bank where i did a cost allocation model for IT costs. They now want me to run this model for the asia regions but rather than take me on as staff they want me to be a consultant. it lookis like i can set myself up as a compnay in the uk and invoice them in sterling paying myself a small salary and then pay uk corporation tax on the rest.

seeing as i already have the skills , knowlegde and experience of what is required and will be running the project i think i can ak for a fair amount as they will save on employee contribution costs, relocation and of course having to recruit externally. it looks like i'll ask for a sterling amount , im just wondering what a ballpark figure will be

I know negotiations always take up a scarface dialogue " I go Hi, you go low !!!!"

[Clip_My_Wings]

It sounded a complicated formula, but actually it was no joke.

I'm saying multiply by 3 as the cost of living is expensive compared to Thailand.

The division by 5 is simply the HK$/THB exchange rate.

Thats for Thai migrants.....

Anyway, if you're coming from UK, its obviously different.

Accommodation is expensive here - bank on GBP 2000 per month. However taxation is just 15%.

1.5x UK salary is ballpark, yes.

<{POST_SNAPBACK}>

Thanks moog .. sorry i thought you were suggesting a salary less than that to be earnt in thailand ..

well the situation im is im currently contracting for 1 and a half years in uk for an investment bank where i did a cost allocation model for IT costs. They now want me to run this model for the asia regions but rather than take me on as staff they want me to be a consultant. it lookis like i can set myself up as a compnay in the uk and invoice them in sterling paying myself a small salary and then pay uk corporation tax on the rest.

seeing as i already have the skills , knowlegde and experience of what is required and will be running the project i think i can ak for a fair amount as they will save on employee contribution costs, relocation and of course having to recruit externally. it looks like i'll ask for a sterling amount , im just wondering what a ballpark figure will be

I know negotiations always take up a scarface dialogue " I go Hi, you go low !!!!"

<{POST_SNAPBACK}>

so waht would be an approiate day rate in pounds ???

[Prakanong2005]

Hi

Why set up a UK Company

Could you not offshore it?

Or a similar situation to my own where I have "investment income" paid from the BVI to a offshore account and a small salary paid into a taxable account in the country i work.

There are other methods that guys use where they get paid 50GBP a day allowance to live - a small salary to pay minimum NI and the rest goes into a IoM Offshore account

The end result is about the same - circa 77% of your contracting rate goes in your pocket in both systems.

As appropriate rate - it all depends on skillset and system working on and I do not know your market.

The guys I drink with range from 500 - 1200 Euro a day where I am.

There is a whole mixture here with Cobol/PL1 programmers, SysAdmin on Tandem, Trading system Specialists and SAP guys.

Obviously the last two skillsets are getting the high end of the rates in the 900-1200Euro range.

[Prakanong2005]

Hi

I have just thought - it sounds as if you are going to invoice them direct with no Agency.

If so add 15%-33% as that is what those "Pimps" take before you get yours.

[Clip_My_Wings]

Hi

I have just thought - it sounds as if you are going to invoice them direct with no Agency.

If so add 15%-33% as that is what those "Pimps" take before you get yours.

<{POST_SNAPBACK}>

well i spoke to a company called TreasureGaurd who will invoice the investment bank for my services and charge 3% but assure me only 20% of totla earnings will be taxed.

i can invoice then in sterling setting up an off shore company is an option and is something i can discuss with them frther down the line.

telll me who are these "pimps2 who will take 15-33% of my money ??

[Prakanong2005]

"Pimps" - its what we call our "Recruitment Consultants" - a necessary evil but they are bottom feeders lower tha estate agents or time share salemen ;-)

3% for the invoicing company seems OK - I pay 4% currently.

Getting taxed on only 20% is good as well - is the rest of the money going offshore like ours does?

[Clip_My_Wings]

"Pimps" - its what we call our "Recruitment Consultants" - a necessary evil but they are bottom feeders lower tha estate agents or time share salemen  ;-)

3% for the invoicing company seems OK - I pay 4% currently.

Getting taxed on only 20% is good as well - is the rest of the money going offshore like ours does?

<{POST_SNAPBACK}>

pimps exactly ... i joined the bank through payroll last year .. the amount the bank paid for a 12 month contract for me was £8190 without va..t .. i know because i signed the invoice

crazy money

[Prakanong2005]

I have heard the average cut for them is 17-22% but it can be more or less.

When i turned up where i am now I was in an expat bar talking to an accountant who does contrators accounts and he said to me, "Oh you are working for Mr 35%"

I can well beleive that at the time but I am earning 1/3 as much again now with increases but the bastards will not go open book so I suspect its still around 25%

A guy I know here is down to 12% open book with his Pimp but he is in heavy demand and she needs him. One of the guys he works with contracts direct and has 5 guys in himself.