Low pay and high taxes represent significant obstacles to attracting talent from Hong Kong, with Beijing’s passage of national security legislation for the territory expected to lead to a flight of capital and talent to neighboring nations, finance industry experts said on Sunday.
The legislation would hasten the outflow of capital and talent from Hong Kong, providing an opportunity for neighboring nations, such as Taiwan, Japan and Singapore, to attract high caliber financial professionals, but Taiwan faces several major obstacles in attracting the professionals, experts said.
Financial service is considered the most important sector in Hong Kong and Singapore, while in Taiwan it essentially bolsters the development of other sectors, PricewaterhouseCoopers Taiwan financial services industry group head Wu Wei-tai (吳偉臺) said.
Compared with Hong Kong, Taiwan’s market is more strictly regulated and the types of financial products allowed for foreign investment are limited, Wu said, so even if finance professionals from Hong Kong were willing to relocate to Taiwan, they would not be able to utilize their expertise and manage products they are familiar with.
Structural problems, such as legal frameworks and regulatory policies, also make Taiwan less attractive, said Lee Chun (李淳), deputy director of the Taiwan World Trade Organization and Regional Trade Agreements Center at the Chung-Hua Institution for Economic Research (中華經濟研究院).
KPMG Taiwan deputy chief executive Wu Lin (吳麟) said that his company wants to attract Hong Kong professionals to Taiwan, but they are usually hesitant when it comes to salary and taxation.
Taiwanese accountants affiliated with an international accounting group receive about one-third of the salary earned by their counterparts in Hong Kong, while the taxes are much higher in Taiwan, Wu Lin said.
To narrow the wage gap between Taiwan and Hong Kong, the government should provide subsidies or allowances for skilled foreign workers and offer preferential taxation schemes, Wu Lin added.
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