Qianhai economic zone will offer a special tax rate of just 15 per cent
The Qianhai special economic zone will be targeting Hong Kong financial professionals
Struggling to find the right job in Hong Kong? How about across the border, just an hour away by car from Hong Kong?
Zhang Bei, the boss of the Qianhai special economic zone, says the small but important zone can create many job opportunities for young Hongkongers, especially those with financial experience.
"We will vigorously bring in Hong Kong talent to take part in the development of Qianhai special zone, which we hope can become a good platform for career growth and job promotion for many young Hong Kong people," Zhang said.
The clincher could be a special tax rate set at just 15 per cent, the same as the maximum in Hong Kong and far lower than the typical rate on the mainland.
The 15-square-kilometre special zone is set to play a key role in efforts to internationalise the yuan and experiment with currency convertibility. Its mission has won approval from President Xi Jinping , who dropped by during his first domestic tour in December after taking over as Communist Party chief.
Qianhai got permission from Beijing to offer the low tax rate to Hong Kong people or foreign nationals who live and work in Qianhai. It's designed to attract Hong Kong financial professionals who are put off from working in other mainland cities, such as Beijing and Shanghai, by high tax levels.
While the low-tax policy will also apply to foreign nationals, Zhang says the scheme is squarely targeted at Hong Kong talent. Those hoping to take advantage must, however, spend at least one year living and working in Qianhai, according to Zhang.
Thousands of jobs have been cut at global banks in Hong Kong since last year as the euro-zone crisis deepened and the economic recovery in the United States continued to disappoint.
The 15 per cent salary tax in Hong Kong has helped the city's financial sector attract professionals, despite relatively high living costs.
In Shanghai, by comparison, the individual tax rate can reach up to 45 per cent. The Shanghai government has offered tax rebates to some foreign employees but such rebates are so far only available to a small number of senior executives who have their offices registered in Pudong New Area, Shanghai's would-be Wall Street.
"We don't have a limit on how many Hong Kong or foreign employees can enjoy the 15 per cent tax rate as long as they meet some basic requirements, and it's not only for CEOs," said Zhang. The requirements would relate to an employee's educational background and work experience.