Hong Kong ROPS

  • 25% tax-free cash lump sum (PCLS) available at age 55 or later, the rest of your pension pot to give you an income for life
  • 0% tax in Hong Kong on income, growth and death
  • Many Double Taxation Agreemeents give the income taxation rights to Hong Kong, so you may not need to pay tax in your country of residence
  • Your retirement income is taxed in Hong Kong if you are tax resident in these countries at retirement: Austria, Belgium, Brunei, Canada, China, Czechoslovakia, France, Guernsey, Hungary, Indonesia, Ireland, Jersey, Kuwait, Lichtenstein, Luxembourg, Malaysia, Malta, Mexico, Netherlands, Qatar, South Africa, South Korea, Switzerland, Thailand, UAE and Vietnam
  • If you live in a country not mentioned above at retirement, you just pay local income tax rates in your country of residence on your retirement income
  • Highest Rated QROPS Jurisdiction anywhere in the world by Standard & Poors credit ratings agency – AAA rated
  • Stable legal and regulatory environment based on English Common Law. Read more about the strict regulation in HK here.
  • Data privacy ordinance, ensuring the safeguarding of your personal data.

Hong Kong ROPS / QROPS

Hong Kong is now becoming a more popular place for British expats looking to move their pension out of the UK tax net. Hong Kong is becoming particularly for high net worth British expats living in Asia and Asians returning from the UK, especially as there is zero tax at source, compared to Gibraltar which charges 2.5% income tax at source, Malta which faces up to 35% income tax if no DTA is available and the Isle of Man which has a 20% income tax if no DTA is available.

A Hong Kong faces zero tax at source in HK and Hong Kong has many Double Taxation Agreements which often gives the taxing rights to Hong Kong.

A ROPS in Hong Kong faces no tax on income in HK and no tax on death. It eliminates taxation in the UK as long as you remain tax resident abroad.

A ROPS in Hong Kong allows 25% tax-free lump sum, also known as the Pension Commencement Lump Sum (PCLS). Further drawdowns are also available.

List of Countries with a Double Taxation Agreement with Hong Kong

Austria, Belgium, Brunei, Canada, China, Czechoslovakia, France, Guernsey, Hungary, Indonesia, Ireland, Italy, Japan, Jersey, Korea, Kuwait, Liechtenstein, Luxembourg, Malaysia, Malta, Mexico, Netherlands, New Zealand, Portugal, Qatar, South Africa, Spain, Switzerland, Thailand, UAE and the United Kingdom all have Double Taxation Agreements with Hong Kong.

However, some of these countries are taxed in their country of residence rather than Hong Kong despite the existence of a DTA: Italy, Japan, Portugal, Spain and New Zealand are all taxed in their countries by their local tax authorities on retirement income remitted.

The UK also re-wrote their tax rules in 2011, so that offshore pension schemes, such as in Hong Kong are taxed on income in the UK if you are tax resident in the UK. However, as long as you remain tax resident outside the UK, your HK pension will have no tax on income, growth or death in HK. You can read the Finance Bill here.

Hong Kong ROPS for Residents in the USA

Hong Kong does not have a Double Taxation Agreement with the USA, however pensions in Hong Kong are not taxed on income, growth or death as long as you remain a resident outside Hong Kong.

Furthermore, a Hong Kong ROPS is not vested, so it may be a suitable overseas pension scheme for residents in the USA. UK pension transfers to a 401k or Roth IRA are not allowed by the American tax authority, the Inland Revenue Service (IRS). However, you can move your UK pension to Hong Kong. This will get your pension out of the UK tax net. You may then only pay income tax on the pension at retirement in the USA, but you would need to seek advice from an American tax attorney. You would need a ruling from the IRS and at present it is not clear how income would be taxed at retirement if you became tax resident in the USA in the future and started drawing income in the USA at retirement.

Click here for the latest Hong Kong ROPS list.

Why Move a UK Pension to a Hong Kong ROPS?

  • A Hong Kong ROPS is open to both residents and non-residents of Hong Kong, i.e. you can live anywhere in the world and move your UK pension to a Hong Kong ROPS
  • There is no tax relief in Hong Kong on contributions paid to the HK ROPS plan. Furthermore, neither residents nor non-residents are subject to taxation in Hong Kong
  • Many of the Double Taxation Agreements gives the taxation rights to Hong Kong
  • Pension income which is derived from employment or self employment outside Hong Kong is not subject to tax in Hong Kong
  • Lump sum pension benefits are not subject to tax in Hong Kong
  • Invest in any currency of your choice and invest in an almost unlimited range of mutual funds, shares, ETF’s, gilts, bonds or treasuries. If it is listed on any major stock exchange, it is likely acceptable
  • Self directed HK ROPS option acceptable, although ROPS trustees must sign off on any investments
  • Please note that Retirement Benefits must be taken before 75 years of age

Hong Kong ROPS Fees

Transfer Value                                Greater than £70,000          Less than £70,000

Transfer from UK Scheme                £695 set up fee + £995 p.a.       £345 set up fee + £345 p.a.
Transfer from Existing QROPS        £495 set up fee + £995 p.a.       £345 setup fee + £345 p.a.

There is an extra fee of £295 for each additional pension transfer into a Hong Kong ROPS. The fees change often as we work with various companies who run promotions every so often, so please email us for the latest fees, they may be lower or higher than quoted.

Please email us today for the best Hong ROPS quotes and a free pension transfer analsyis.