Looking to set up a Mandatory Provident Fund for your Hong Kong company? Here is some basic information to know for setting up an MPF fund in Hong Kong.
What is an MPF scheme?
“MPF” stands for Mandatory Provident Fund, which is a compulsory pension fund for employees in Hong Kong. This system is operated under the framework of the Mandatory Provident Fund Schemes Ordinance (MPFSO). Both full-time and part-time employees who fall between the ages of 18 and 65, irrespective of the industry, need to join an MPF scheme. Self-employed persons can join an MPF scheme as well.
How does MPF in Hong Kong work?
Under an MPF scheme in Hong Kong, both employer and employees will contribute every month into a “contribution account” set up for the employee. These monthly contributions will continue until the employee leaves the company.
Self-employed persons can also choose to make their contributions either on a monthly or yearly basis on or before the contribution day. As the financial year under an individual MPF scheme may vary, self-employed persons need to inform the trustees of their preferred frequency for making contributions when they first enroll in an MPF scheme.
Important note: It is the ultimate responsibility of the employers to choose an MPF scheme and enroll their employees.
How to join an MPF scheme?
If you have new employees joining the company for a continuous period, an MPF scheme should be set up for them within the first 60 days of employment. The company would also need to choose their desired MPF trustee company to invest the MPF contributions in.
To enrol a new employee, provide them an enrolment form for the MPF scheme. They will need to indicate their portfolio to invest their MPF contributions into, their personal details, self certification including their tax residency and return the signed form back to the company. The company will then send this form to the MPF trustee to set up the scheme.
By now you may have an understanding about what an MPF scheme is and how to set one up for your company in Hong Kong. It’s important to know that it is the company’s legal obligation under the MPF system to enrol their new employees into an appropriate MPF scheme.
If you are looking for more information about MPF schemes in general, Startupr can help.