[BettyInToronto]

My sister works in the USA and recently a co-worker went to live and work at one of their sub-companies in Shanghai. He called her recently asking if his pay could be split - part to a China bank and part to a US bank. He said he needs to do this because whatever money he earns and saves in China cannot be taken out of China. Is this really true?

She brought this up because she knows when we sell our house and retire, we are moving to HK and plan to bring all of our money there (about $3.5 million HK). We plan on renting the first year to confirm I can handle the humidty and then if I like it as much as I hope, we will buy a village house in the Mui Wo area on Lantau Island. She is worried that if we decide NOT to stay, then we will not be able to get our money out. This was news to me.

Can someone please comment?

[vmlinuz]

As far as I know, there are no significant currency restrictions at all in Hong Kong - you can take as much as you like, in any currency, in or out of HK.

The only issue might be if you're a foreign government attempting to take a large stake in one of the note-issuing banks - but I suspect that isn't the case here...

[wsuperfun]

What 'vmlinuz' said is more or less exactly the situation in Hong Kong as a city of highest economic freedom in the world. The situation in China is different and according to what I know there are restrictions on the flow of capital. However, how this exactly happens I am not certain; and surely you have to research on this before decision. China's current policy on capital flow may be different from a few years ago and will keep changing as the country further opens to the world. You have to ask someone who exactly knows this, possibly someone from a global bank in China.

Also, a further note which may be obvious to everyone, Hong Kong and Mainland China have different regulations on immigration and capital flow. Being granted to be a permanent resident in China doesn't mean he/she is allowed to settled in Hong Kong. To be very general, anyone individual not coming from China without any link with Hong Kong citizen (family etc.) are allowed to apply for work, study, holiday visa to stay in HK but to be granted to stay in HK permanently, he/she to fulfill certain criteria, such as investment of HKD 6.5 million or possession of certain skills etc. to be qualified to apply as HK permanent residents.

[Sleuth]

Also, you are talking about retirement. That could be 20 or 30 + years. The situations that exist today might not exist then. China might have HK's rules; HK might have China's rules. You never know.

[BettyInToronto]

Originally Posted by Sleuth

Also, you are talking about retirement. That could be 20 or 30 + years. The situations that exist today might not exist then. China might have HK's rules; HK might have China's rules. You never know.

Actually retirement is NOT 20-30 years away but 5-7 years away. Closer than we think.

I have nothing to do with China but was just asking because HK is technically part of China though it is one country - two systems.

My husband is from HK and gets ROA and permanent resident as soon as he applies. Me, I have to wait 4-8 weeks for a dependent visa. No big deal.

I guess when we're doing our next research trip there (with a trip to immigration) we will also have to visit the banks to question this. If we leave the money back in Canada we get taxed on the interest made. Not sure that is the case in HK so that is why we are thinking of bringing it all over once we deteremine we are staying and buying propety.

[PDLM]

There is no restriction on import or export of currency to/from HK (except RMB and other currencies that are controlled by their governments).

I understand from other threads here that you will need to jump through some hoops in Canada to stop them taxing you there even after you leave. It seems harder than most places to become non resident for tax purposes (although not as hard to escape from as the USA).

[Sleuth]

Originally Posted by BettyInToronto

Actually retirement is NOT 20-30 years away but 5-7 years away. Closer than we think.

I meant it, and therefore your money, will last 20-30+ years. So if you decide you need to take your money out of HK and escape back to Canada 20 years from now, the situation might have changed.
My point is how important is being able to move the money back and forth? Canada would certainly be a safer place and PDLM points out you might not escape Canadian taxes anyway.

[HKChigger]

Not so sure about that PDLM. I applied and got non resident for tax purposes in Canada and I still have ties, I have a bank account, credit card and drivers licence. Granted my licence expires in October and I may not be able to renew it, but I didn't have any hoops aside from the government wanting some tax money back.

[PDLM]

The fact that you have to apply for it is a hoop in itself. For the UK, for example, you just state it on your next tax return - then it's up to the taxman to dispute it if they wish.

[spaceman]

An important point is that you are not obligated to "apply" to be a non-resident for tax purposes in Canada. Some people go as far as suggesting that you don't fill out the "determination of residency status" form, as they say it raises unnecessary red flags.

As long as you're confident that you don't have "too many" residential ties to Canada, then don't fill out the form. Of course, there is no set formula for the amount of ties that you're allowed to have, and evaluation is done on a case by case basis, so there is no really way to be all that confident at all. I love Canada.

In the end, the point is that people should fill out the form to determine their status, not to register it.

http://www.cra-arc.gc.ca/tax/nonresi...onres-e.html#d

Of course, this message comes with the usual disclaimer that you should consult a Canadian tax lawyer and that I may not know what the heck I'm talking about at all.