Taiwan faces low pay, high tax barriers in drawing HK talent

07/19/2020 05:50 PM
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Hong Kong
Hong Kong's Victoria Habour. CNA file photo

Taipei, July 19 (CNA) Low pay and high taxes in Taiwan represent significant obstacles in attracting talent from Hong Kong, with Beijing's passage of a national security law for the territory expected to lead to the flight of capital and talent to neighboring countries, domestic financial experts said Sunday.

The national security law will hasten the outflow of capital and talent from Hong Kong, providing an opportunity for neighboring countries including Singapore, Taiwan and Japan, to attract high caliber financial professionals, according to experts.

However, Taiwan faces several major obstacles in attracting Hong Kong finance professionals.

The financial industry is considered the most important sector in Hong Kong and Singapore and its development given full support. In Taiwan, the industry essentially bolsters the development of the industrial, business and manufacturing industries, said Wu Wei-tai (吳偉臺), head of the Financial Services Industry Group at PricewaterhouseCoopers Taiwan (PwC Taiwan).

Meanwhile, compared with Hong Kong, Taiwan's financial market is more strictly regulated and the types of financial products allowed for foreign investment are limited, Wu said.

In other words, even if Hong Kong finance professionals are willing to come to Taiwan, there is no room for them to exercise their expertise and manage products they are familiar with in the country, according to Wu.

Structural problems, such as legal frameworks and openness policies, also make Taiwan less attractive, according to Lee Chun (李淳), deputy director of the Taiwan World Trade Organization and Regional Trade Agreements Center of the Chung Hua Institution for Economic Research.

For instance, while Hong Kong and Singapore have adopted the English and American common law systems, which allow the greater flexibility needed for the development of the financial industry, Taiwan follows the continental law system, Lee added.

Meanwhile, Wu Lin (吳麟), deputy CEO at KPMG Taiwan, said his company wants to attract Hong Kong professionals to work in Taiwan, but they are usually hesitant when it comes to Taiwan's pay and tax issues.

For example, Taiwan's accountants affiliated with an international accounting group receive about one third of the pay earned by their Hong Kong counterparts at the same group, while the taxes are much higher in Taiwan, Wu added.

In order to narrow the wage gap between Taiwan and Hong Kong, the government should provide subsidies or allowances for foreign skilled workers and offer tax preference, Wu suggested.

(By Wu Chia-jung, Liu Pei-cheng and Evelyn Kao) Endtiem/AW

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