HONG Kong's thriving economy and buoyant job market attract a range of expatriates - from recent college graduates to senior employees on top expatriate packages. Despite large differences in salaries, all new arrivals need to adjust their personal finances to meet Hong Kong's unique taxation and other economic conditions. But the first thing to do is relax and settle in, according to Matheson PFC director Ivor Dalgleish. He said that new arrivals should avoid rushing into financial plans for at least six to nine months. ''The first priority after arriving in Hong Kong is to settle down and get used to the new environment,'' he said. ''As a starting point, give yourself time to adjust to the cultural change, the different climate and the pace of life before you tackle a financial plan tailored for Hong Kong.'' The danger is over-commitment to a plan that is not flexible enough for the territory. Hong Kong often provides the first full-time employment for graduates from recession-hit countries and Mr Dalgleish said new arrivals in this category needed generally 12 months before they were in a position to begin financial planning. ''Typically, young arrivals will share a flat and generally enjoy their new working and living environment,'' he said. ''In many cases it will be the first time that they have paid their own way and it will take a while before they are established. ''It is also important to remember that most young workers have a wait-and-see attitude and the length of their stay will hinge on how much they like or dislike Hong Kong.'' Those who make the progression from this first category to a more permanent Hong Kong lifestyle are the candidates for a financial plan. They have a good understanding of their cash flow requirements and have had time to adjust to Hong Kong's high living costs. ''These individuals are likely to move into better paid jobs, take on more permanent positions and will often get into taxation planning without even being aware of it,'' Mr Dalgleish said. ''A flight home each year in place of a pay rise or a rental allowance provided by an employer will affect salary and taxation assessments.'' The discovery that Hong Kong's high salaries make a net disposable income possible is often the first opportunity people have to explore financial planning. ''On average, it takes individuals about six to 12 months before they are ready to put together a financial plan,'' Mr Dalgleish said. A financial plan relevant to Hong Kong should only be devised after a thorough examination of an individual's current financial status, overseas deposits which may be generating taxable income, existing financial commitments and policies. Top priority should be given to an emergency fund for air fares home or unexpected expenses as well as to setting up either a taxation account or a fund for regular taxation instalments. Mr Dalgleish said the drawing up of wills and the appointment of guardians for children were also vital. ''After looking at their present cash flow, income and expenditure people are ready to begin to prioritise their needs and the financial plans that they can afford,'' he said. He added that the best financial plans were those which gave high returns without penalties for stopping or altering payments. One of the most common questions posed by British residents working in Hong Kong was whether or not they should continue their British National Insurance payments. ''We generally advise people that they should continue on a class three voluntary basis and for a monthly payment of GBP23.62 (about HK$273) they can secure all the benefits that they would have if they were still in Britain.'' Mr Dalgleish said. He said that when devising a comprehensive financial plan clients should address short-term (one to four years) and medium-term (four to 12 years) needs. In the long term, the financial plan should take the individual up to retirement age, during which time he or she should have accumulated capital to replace his or her income.
