How to pay freelancers in Hong Kong
Hong Kong has seen a rise in the popularity of freelancing, particularly amongst millennials who want the flexibility to enjoy a better work-life balance that comes with contract work. While some individuals might look for freelance work because they do it full-time, others might be hoping to make some extra money on the side. Either way, this presents an opportunity for business owners from around the world to hire top talent without being restricted to finding staff locally.
To make the most of this opportunity, you need to know the best way to pay international contractors, so we’ve compiled some helpful information below that you can use to get started.
How to pay an international invoice
1. Negotiate currency exchange rates
Talk to your remote employees to find out if they would be willing to accept payment in your domestic currency. For example, if you’re a business in the United States and you need to pay a company in China, you may find that many businesses are happy to be paid in dollars.
2. Find a money transfer provider that works for you
Paying for an international invoice to a freelancer in Hong Kong doesn’t have to be complicated or expensive. With the right provider, you can transfer your money easily online, and at a better rate. We’ll compare two popular options for making an international money transfer later in this article.
3. Mitigate your currency risk
Currency risk is the risk that a business or individual’s financial performance or position will be impacted by fluctuations in the exchange rate. Depending on the provider you choose, you can access tools to help mitigate risk like forward contracts to protect against any unfavourable currency movements. This will help with offering consistent pricing if you need to pay freelancers in Hong Kong regularly.
How to transfer money to freelancers in Hong Kong
So, you’ve decided that you’d like to tap into the large pool of talented individuals in Hong Kong. Great! The next step involves figuring out the best way to pay the freelancers that you’ll hire. With the right international payment method, you’ll be able to save money, and your freelancers will get paid on time.
Here are the main methods you can use to pay freelancers in Hong Kong:
Transferring using a bank
While you might immediately think of just using your bank to pay an invoice in a foreign currency, it’s in your best interest to reconsider. That’s because banks charge high fees and margins whenever you need to have your currency converted into the Hong Kong dollar (HKD).
In the end, your freelancer could be taking quite a hit on their earnings. They might, in turn, ask you to cover the fees so they can get paid what they’ve invoiced, or they might decide to go work for someone else altogether.
Transferring using an International Money Transfer (IMT) provider
A better option is using an online money transfer provider like OFX. You get the benefits of speedy, secure transfers, but you don’t have to worry about getting hit with the high margins and fees that banks charge.
When you use OFX to move your money to Hong Kong, you can expect that the funds will arrive in just a few days (at most, 3-5 days, but some transfers might take 1-2 days, or even be completed same-day). Your freelancers will get their money on time, and you can save money, too, so it works better for everyone.
|Fixed fees||Exchange rates margins||Support|
|OFX||Low to no fixed fees, depending on where you’re sending from.||A small margin that’s typically lower than the banks’ margins.||Available 24/7 over the phone to provide helpful human support for all currency-related enquiries.|
|Standard bank||Hefty fixed fees, sometimes around $30, just to make a transfer.||Many banks can charge up to a 5% margin on the interbank rate, depending on how much you’re transferring.||Banks operate within certain hours of the day, so you can’t always get the support you may need.|
What your business should look for in a global money transfer provider
Sure, there are quite a few money transfer providers to choose from, but they aren’t all created equal. Consider the following:
Things move fast these days, and no one likes waiting around for their money to arrive when they’re freelancing. That’s why it’s important to find an international money transfer service that will ensure every transfer will move swiftly without sacrificing security. When you use a service like OFX, you can submit your transfer 24/7 and most transfers in the world’s major currencies typically arrive within 1-2 days.*
You might be hiring freelancers in Hong Kong to save money while bringing talented people to your team. But having to cover fees and margins to pay those contractors can undo the savings. With OFX, however, you gain access to helpful tools and transfer options, like currency charts, limit orders, and forward contracts, to help you plan your transfers ahead of time.
Some currency management tools like Forward Exchange Contracts let you lock in your preferred exchange rate, even if you don’t need to make a transfer right away. Limit Orders are another example, which gives you more control over hard-to-predict exchange rate fluctuations. You indicate what your target rate is, then the currency specialists at OFX monitor the markets for you until that rate hits – or you cancel the order – once it’s hit, the team will notify you via SMS or email to make the transfer.
When you’re running a business, the logistics of making international payments could be one of the furthest things from your mind. This is why having someone to call 24/7 to help with any currency related enquiries is essential for today’s growing global businesses. With OFX, you get the benefit of currency specialists available 24/7 to help with your transfers.
Legal and tax requirements for paying overseas freelancers in Hong Kong
When you hire an international contractor from Hong Kong, you won’t be putting them on your payroll as an employee, so you won’t be withholding any taxes on their behalf. Instead, it will be up to the contractors to set money aside and pay the appropriate taxes according to local laws.
It’s important to keep in mind that, according to the labor law in Hong Kong, an independent contractor is someone who’s totally autonomous, right down to when and how they work. Also, they shouldn’t fill an integral role in your company’s operations.
The best places to find freelancers in Hong Kong
Accessing talent in Hong Kong is surprisingly easy, thanks to the many online resources available to professionals who are hoping to keep their company going strong for many years to come.
A few of the top places to look for freelancers include:
Hong Kong is a great place to find international freelancers
There are a lot of things to think about when doing business overseas with the help of freelancers in Hong Kong, but one thing that you don’t need to fret about is how you’ll pay those contractors. With the support of an international money transfer service like OFX, you can submit payments securely, and you can save money in the process.
*Delivery times are indicative and measured in business days from the time your funds are received by OFX.
IMPORTANT: The contents of this blog do not constitute financial advice and are provided for general information purposes only without taking into account the investment objectives, financial situation and particular needs of any particular person. OzForex Limited (trading as OFX) and its affiliated entities make no recommendation as to the merits of any financial strategy or product referred to in the blog. OFX makes no warranty, express or implied, concerning the suitability, completeness, quality or exactness of the information and models provided in this blog.