Do Overseas Founders Need MPF? Exemptions Explained
Reviewed by Captime's licensed team (TCSP Licence TC010212) · Updated · Editorial policy
Overseas founders may be exempt from MPF in Hong Kong. Learn when MPF applies, who qualifies for exemptions, and the key employer rules in 2026.
Key Takeaways
- Company ownership alone does not create an MPF obligation. The employment relationship matters.
- Overseas work can still be covered when a person is employed in or from Hong Kong with a sufficient Hong Kong connection.
- An executive director involved in daily operations and receiving remuneration generally needs MPF unless exempt.
- Some people entering Hong Kong for employment are exempt for a stay of 13 months or less or because they remain in an overseas retirement scheme.
- Eligible regular employees aged 18 to 64 generally must be enrolled within 60 days; probation does not pause the deadline.
- Monthly contributions are generally 5% of relevant income, subject to statutory minimum and maximum income levels.
Quick Answer
Owning a Hong Kong company does not automatically mean an overseas founder must join the Mandatory Provident Fund (MPF). The key question is whether the person is employed in or from Hong Kong, whether there is a sufficient connection with Hong Kong, and whether an exemption applies. Eligible Hong Kong employees generally must be enrolled within 60 days.
When Does MPF Apply to an Overseas Founder or Hong Kong Hire?
For overseas founders, MPF depends on the employment arrangement, not simply the shareholder or director title. MPFA guidance looks at whether an employee is employed in or from Hong Kong. A person working abroad may still be covered where there is a sufficient connection with Hong Kong, while someone employed outside Hong Kong by an overseas establishment may fall outside the system.
Directors should also look at what they actually do. MPFA states that an executive director involved in daily operations and receiving remuneration should be enrolled unless exempt. Its April 2026 guidance also distinguishes directors’ fees arising from an employment relationship from fees paid solely for holding office.
A person entering Hong Kong for employment may be exempt if permitted to stay for 13 months or less or if they remain a member of a retirement scheme outside Hong Kong. If the stay is extended beyond 13 months, the exemption generally ends after the first 13 months, and the employer should reassess enrolment.
Eligible regular full-time and part-time employees aged 18 to 64 generally must be enrolled within 60 calendar days, including during probation. Casual employees in the construction and catering industries follow separate rules and may need enrolment within the first 10 days.
How Captime Helps
Captime Corporate Management Limited (TCSP Licence No. TC010212) helps overseas founders review their Hong Kong employment and MPF position, including common exemption scenarios. When you hire in Hong Kong, Captime can also support MPF enrolment, payroll and monthly contribution administration, helping you keep deadlines, records and employee obligations organised.
Official References
- Mandatory Provident Fund Schemes Authority (MPFA) — MPF Coverage
- MPFA Guidelines IV.16 — MPF Coverage on Employees Working Outside Hong Kong
- MPFA Guidelines IV.12 — Relevant Income in Respect of a Relevant Employee
- MPFA — Mandatory Contributions for Employees
- MPFA — MPF Contributions During Probation
- MPFA — Enforcement Measures and Penalties
Comparison Table
| Situation | Typical MPF Position | Key Point |
|---|---|---|
| Founder works overseas but is employed in or from Hong Kong | May still be covered | Check the Hong Kong connection |
| Executive director paid for daily operations | Generally covered unless exempt | Employment relationship matters |
| Overseas employee entering Hong Kong for 13 months or less | May be exempt | Recheck if the stay is extended |
| Overseas employee in an overseas retirement scheme | May be exempt | Keep supporting evidence |
| Eligible regular Hong Kong employee | MPF generally required | Enrol within 60 days |
| Monthly relevant income below HK$7,100 | Employer contributes; employee generally does not | Monthly paid employees |
| Monthly relevant income above HK$30,000 | Mandatory contribution capped at HK$1,500 each side | Check current thresholds |
For monthly paid employees, employer and employee contributions are generally 5% of relevant income. Below HK$7,100, the employee generally does not contribute; above HK$30,000, mandatory contributions are capped at HK$1,500 each.
Frequently Asked Questions
Not automatically. Owning a Hong Kong company does not by itself create an MPF obligation. Coverage depends on whether the founder is employed in or from Hong Kong, their actual role and remuneration, and whether an MPF exemption applies.
It depends on the director’s role. An executive director involved in daily operations and receiving remuneration generally needs MPF unless exempt. A non-executive director who is not involved in daily operations generally does not need MPF solely because of the director title.
Not necessarily. A founder working overseas may be outside the MPF system if the employment has insufficient connection with Hong Kong. However, employees employed in or from Hong Kong can remain covered while working abroad temporarily.
A person entering Hong Kong for employment may be exempt if permitted to stay for 13 months or less, or if they remain a member of a qualifying retirement scheme outside Hong Kong. The exemption should be reassessed if their circumstances change.
Directors’ fees can count as relevant income when an executive director performs daily operational duties as an employee. Fees paid only for holding a non-executive office are generally different. Dividends paid to a shareholder are not employment remuneration for MPF purposes.
Eligible full-time and part-time employees aged 18 to 64 generally must be enrolled within the first 60 calendar days of employment. A probation period does not extend the MPF deadline. Separate rules apply to casual workers in construction and catering.
Employers and employees generally each contribute 5% of relevant income. For monthly-paid employees, the employee contribution starts at HK$7,100, while mandatory contributions are capped at HK$1,500 per month per side when monthly income exceeds HK$30,000.
Failure to enrol an eligible employee can lead to serious enforcement action. The maximum penalty is a HK$350,000 fine and three years’ imprisonment, so overseas founders should confirm MPF status and exemptions before relying on them.
Video transcript
Read the full transcript
Video 25 Transcript You run a Hong Kong company from London, Lisbon, or Lagos? Do you need MPF? Here's the direct answer. Usually, not for yourself. MPF, the Mandatory Provident Fund, is Hong Kong's compulsory retirement scheme for people employed in Hong Kong, and two specific exemptions cover most founders who aren't. But the day your company hires anyone in Hong Kong, MPF becomes mandatory, with a 60-day enrollment clock and 5% from each side. In this video, what MPF is, exactly when an overseas founder is exempt, and what changes the moment you hire locally. MPF runs under the Mandatory Provident Fund Schemes Ordinance, Chapter 485, policed by the MPF Schemes Authority.
The mechanics are simple. For every covered employee, the employer contributes 5% of the employee's monthly income, the employee contributes another 5, and both go into the employee's own retirement account. Who's covered? Employees in Hong Kong aged 18 to 64, employed for 60 days or more. There's a floor and a ceiling. We'll get to the numbers when we talk about hiring. The key phrase for you is employed in Hong Kong. MPF follows work done here, not company ownership. Owning a Hong Kong company on its own creates no MPF duty at all. Now you, specifically. In our Pay Yourself video, we said an exemption usually covers you. Check your case. This is that check in three steps. Step 1.
If you only take director's fees and dividends, no employment contract, you're generally not an employee at all, and MPF doesn't touch you. Step 2. If you work for your company but do it entirely from abroad, you're not employed in Hong Kong, again, generally outside the system. Step 3. If you do take up employment in Hong Kong, two exemptions exist for people from overseas. Your employment visa permits you to stay 13 months or less, or you remain an active member of a retirement scheme outside Hong Kong, your pension back home. Meet either, and you're exempt. One warning attached. The 13-month exemption expires.
Extend your stay past 13 months, and enrollment is due within 60 days of that milestone. It does not renew. Everything changes with your first Hong Kong hire. You must enroll them in an MPF scheme within 60 days of employment starting. And, yes, the probation period counts inside those 60 days. From there, the numbers. 5% from you, 5% from them. If they earn less than HK$7,100 a month, their side is waived, but yours isn't. Above HK$30,000 a month, contributions cap out at HK$1,500 each.
Contributions flow monthly, records stay on file for 7 years, and, like all official mail, MPFA correspondence lands at your registered address, which is exactly why that address needs to be read, as our registered address video explains. Three plain notes. First, the penalties are heavyweight. First, failing to enroll an eligible employee carries fines up to HK$350,000 and up to three years' imprisonment, and late contributions collect an automatic 5% surcharge. Second, don't stretch the exemptions. The 60-day employment threshold is about genuinely short engagements, and the 13-month visa exemption dies quietly at renewal. Both are checked against facts, not intentions.
Third, exemption from MPF is not exemption from everything else. The employer's returns from our Pay Yourself video still apply to salaries and fees regardless. When in doubt, have your status checked before you assume. It's a 10-minute question with a HK$350,000 wrong answer. The facts in 20 seconds. MPF Chapter 485 covers people employed in Hong Kong who are 18 to 64 years old, employed for 60 days or more. Overseas founder. No Hong Kong employment? Generally outside it. Working here anyway? Exempt if your visa allows 13 months or less, or you're in an overseas retirement scheme and the visa exemption expires. Hiring in Hong Kong. Enroll within 60 days, 5% each. Floor 7,100.
Cap 1,500 each side. Mis-enrollment, up to 350,000 and 3 years. At Captime Corporate Management Limited, we keep this off your desk. We check your own MPF position against the actual exemptions. And when you hire in Hong Kong, we assist you with the enrollment and the monthly contribution run as part of our payroll service. hk or use the link in the description. No credit card, no obligation. Thank you for watching. If this settled the MPF question, give it a like and subscribe. Accurate, hype-free guides to running a Hong Kong company. See you in the next video.
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