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How do I set up an MPF for my Hong Kong Company?

Curious about how retirement plans work in Hong Kong? Or what the steps are for setting up a retirement savings plan for your company? Retirement plans are set up under a Mandatory Provident Fund in Hong Kong, introduced by the government in the early 2000s. This has led to the framework of retirement plans that every company in Hong Kong must abide by.

If you have a company in Hong Kong and plan to employ staff, you should know all about the different rules that govern Mandatory Provident Funds and when you need to make MPF contributions. If you’d like to know how to set this up for your company, keep reading!

What is a Mandatory Provident Fund or MPF?

A Mandatory Provident Fund, or MPF for short, is an employment-based retirement protection plan. Under this scheme, all employees and self-employed persons at least 18 or older and under 65 are required to join an MPF scheme. This retirement scheme is overseen by the Hong Kong authorities and managed by private MPF trustees, normally a bank or insurance fund provider.

Under the Mandatory Provident Fund Scheme Ordinance in Hong Kong, employers are required to enrol employees in schemes to receive Hong Kong MPF contributions for retirement. There are a few different MPF schemes that companies can choose from.

Different Types of MPF Schemes

MPF schemes in Hong Kong work on the principle of fully funded contributions into privately managed plans. Employers and employees contribute to these funds as a trust, which separates fund assets from those of the manager, and then the investment decisions are delegated to a trustee.

There are three types of MPF schemes in Hong Kong:

Master Trust Schemes

The most common scheme for Hong Kong MPF contributions is the Master Trust Scheme. This fund is open to self-employed persons, employees of participating employers, and also those with accrued benefits to be transferred from other schemes.

As the contributions are done by the employers and their employees, Master Trust Schemes have a high degree of efficiency in terms of scheme administration.

Employer-sponsored Schemes

The second type of MPF scheme is an employer-sponsored scheme. This fund is only for employees who have a single employer and its associated companies. Due to it’s restrictions in membership, this scheme is quite cost-effective to run as an employer-sponsored scheme when the number of employees is large.

Industry Schemes

Last but not least, there are industry specific MPF schemes in Hong Kong as well. This fund is specially designed for employees who have been working in the catering and construction industries. These are for casual employees who are employed on a day-to-day basis or for a fixed period of less than 60 days.

The best part about this scheme is that casual employees don’t have to change schemes if they plan to change jobs within these two industries. However both their old and new employers must be companies registered with the same Industry Scheme.

How does the MPF scheme in Hong Kong work?

The MPF system in Hong Kong is a privately managed retirement system. This scheme is operated by trustees, commonly known as MPF trustees, service providers, and MPF intermediaries who take part and play different roles in the MPF System. Let’s get a brief description of every operator:

MPF Trustees

MPF trustees are the principal operator of Mandatory Provident Fund schemes in Hong Kong. The trustee can be a company or a natural person, but is most likely a large bank or insurance company.

The company will choose which MPF Trustee it would like to manage the MPF funds for it’s employees. Within the scheme member’s interest, an MPF trustee has to exercise fiduciary duty in operating MPF schemes.

List of MPF Approved Trustees 

Here is the list of MPF approved Trustees in Hong Kong.

Name of Trustee
AIA Company (Trustee)Limited
Bank Consortium Trust Company Limited
Bank of Communications Trustee Limited
Bank of East Asia (Trustees) Limited
BOCI-Prudential Trustee Limited
China Life Trustees Limited
Cititrust Limited
HSBC Institutional Trust Services (Asia) Limited
HSBC Provident Fund Trustee (Hong Kong) Limited
Manulife Provident Funds Trust Company Limited
Principal Trust Company (Asia) Limited
RBC Investor Services Trust Hong Kong Limited
Sun Life Pension Trust Limited
Sun Life Trustee Company Limited
YF Life Trustees Limited

Scheme Administrator

The scheme administrator handles the day-to-day administrative work of an MPF scheme. The work includes handling the requests for transfers or withdrawal of accrued benefits, keeping records of the MPF scheme, and also providing other customer services to enrolled employers and scheme members.


Hong Kong-registered trust company or authorized financial institution in Hong Kong acts as a custodian for this scheme. They are appointed by the MPF trustee for the function of the safekeeping of scheme assets.

Investment Manager

Investment managers are responsible for managing the investment of funds of the Hong Kong MPF contributions. The funds enter into the investment management contract with the MPF trustee, but the role of the investment manager is independent of the MPF trustee and custodian of the MPF scheme.

MPF Intermediaries

In order to engage in MPF and marketing activities, an MPF principal intermediary (a business entity registered with MPFA) is required. These intermediaries can be an authorized financial institution, registered corporation or authorized company that is carried on a long term insurance business or a licensed long term insurance broker company.

Who is covered under a mandatory provident scheme in Hong Kong?

Under a mandatory provident fund scheme in Hong Kong, those required to enroll are:

  • All self-employed person, whether they are the partner in a partnership firm or the business owner of a sole proprietorship firm
  • A permanent worker or regular employee who directly work for and get paid by a single employer
  • A temporary worker or casual employee at least 18 but under 65 years of age, regardless of the industries they are working

Who is exempted from an MPF scheme?

And those exempt from entering into an MPF scheme are:

  • People who have entered Hong Kong for employment for not more than 13 months
  • People who are covered by overseas retirement schemes
  • Domestic employees
  • Occupational retirement schemes members which have MPF exemption certificates
  • Self-employed hawkers
  • People covered by statutory pension or provident fund schemes, such as civil servants and subsidized or grant school teachers
  • EU office’s employees of the European Commission in Hong Kong

How can you join MPF?

Both part-time and full-time employees can join an MPF scheme. However, current employers are required to enroll their employees in an MPF scheme no later than the first 60 days of employment.

For self-employed persons, they need to enroll themselves in an MPF scheme within 60 days once they have set up their self-employed businesses.

How much is a mandatory contribution?

Self-employed persons, employers, and its employees are required to contribute an amount (normally 5% of the employee’s relevant income) to the retirement plan. Any amount of the mandatory contribution paid for an employee and self-employed persons are immediately vested in their account, as soon as they have paid to their selected MPF trustee. This proportion is subject to the maximum and minimum relevant income levels. 

A table of mandatory contributions by employer and employee in a regular and casual employment are:

Monthly Relevant
Income of Employee
Employer’s Mandatory
Employee’s Mandatory
Less than $7,100 5% of incomeExempted(income floor)
$7,100 to $30,000 5% of income 5% of income
More than $30,000 $1500 (income ceiling)

$1500 (income ceiling)

In case of voluntary contributions, the employees, employers, and also self-employed persons are free to make their own contributions on the top of their initial MPF contributions.

Withdrawal of Accrued Benefits

Accrued benefits consist of all the accumulated contributions and the return on this investment over time. As the MPF is a retirement saving plan, scheme members can withdraw their accrued benefits once they reach the age of 65.

However under certain conditions, member’s accrued benefits are allowed to be withdrawn from their MPF schemes. The circumstances for this are:

  • Terminal illness;
  • a small balance of $5,000 or less, and as at the date of the claim, at least 12 months have elapsed since the last contribution day in respect of the member; or
  • early retirement at age 60 or above;
  • death (the accrued benefits will be regarded as part of the member’s estate to be claimed by the personal representative of the estates.
  • permanent departure from Hong Kong;

What are the ways to save the accrued benefits for employed persons in the MPF systems?

Members can save their accrued benefits in two different ways, through a contribution account and personal account. These two types are described below:

  • Contribution Account: This account is to receive the mandatory and voluntary contributions made by an employee and his employer under the current employment or a self-employed person under self-employment.
  • Personal Account: The main aim of this account is to receive the accrued benefits collected in the ex-employment and ex-self employment from other accounts of the MPF scheme. The amount in this account can be transferred to any other MPF scheme.

For Employers

Under the Employment Ordinance, when an employee is liable to pay for his employee Severance Payments or Long Service Payments under the Employment Ordinance, they can withdraw his portion of MPF accrued benefit from their employee’s MPF account after balancing these two payments. But if the benefit is insufficient to cover the employee’s liable payment, they have to recover all the difference in accordance with the employee’s requirements.

For Employees

All contributions done by the employees and his current employers are received in a contribution account. Under the Employee Choice Arrangement (ECA), they are allowed to withdraw their percentage of accrued benefits from the contribution account once a year. However, when the employee starts a new job under a new employer, then all the accrued benefits will be transferred to their personal accounts. 

For Self-employed persons

If you are a self-employed person, as per your choice, you can transfer your accrued benefits in either a contribution or personal account of the MPF scheme. 


By now, you may have a better idea about how you can set up an MPF scheme for your company in Hong Kong. The decision of which MPF scheme you want to choose depends on many factors, including the investment fund types, fees, charges payable, and overall quality of customer service offered by the trustee of the scheme.

Since new entrepreneurs and startups may lack the initial experience of handling MPF related matters, it is always advisable to seek help and take the services of a professional. They will be able to assist you with all the compliance issues revolving around MPF schemes and also support for the different MPF trustees.

If you are looking for more information about MPF schemes in general, feel free to contact Startupr today.