There is no social security agreement between India and Hong Kong, so a Hong Kong employee working in India cannot obtain a certificate of coverage. As the EPF rules for international workers are generally applied, a foreign national from a country without an agreement is covered from the first day, with contributions on full wages. Hong Kong's own Mandatory Provident Fund continues to apply to employees employed in Hong Kong, subject to its exemptions, so a secondee can face contributions in both places. For income tax, the treaty's day-count test rarely helps a secondee whose cost is borne by the Indian subsidiary, so the Indian employer withholds tax on salary under Section 392 of the Income-tax Act, 2025.
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Key facts
| Social security agreement | None between India and Hong Kong |
|---|---|
| Indian provident fund | International worker rules as generally applied: contributions on full wages without the usual ceiling; the rule has been litigated, so confirm the position |
| Hong Kong MPF | Employer and employee each pay 5% of relevant income up to HK$30,000 a month (maximum HK$1,500 each); exemptions exist, including for some foreign employees in their first 13 months or with an overseas scheme |
| Indian income tax | Tax on salary for work done in India under Section 392; treaty relief only if the day-count and employer conditions are met |
| Hong Kong salaries tax | Territorial; a Hong Kong employment with services partly abroad has special rules (the 60-day visit rule for non-Hong Kong employments); confirm with a Hong Kong adviser |
| Equalisation | Plan a tax equalisation or gross-up policy |
| Cost | Budget for double contributions where MPF and EPF both apply |
Income tax in India
- Salary for work done in India is taxable in India. The treaty can protect a short stay only if the conditions in the employment article are met, including that the employer is not an Indian resident and the cost is not borne by an Indian entity. Confirm the exact test in the treaty text.
- The Indian employer deducts tax on salary under Section 392 of the Income-tax Act, 2025, and deposits it by the 7th of the following month.
- A person who stays long enough becomes resident in India and may be taxed on world income, subject to the not ordinarily resident rules.
- Allowances for housing, school fees and travel are taxed as perquisites unless exempt, so negotiate the package with the tax effect in mind.
Provident funds: EPF and MPF
| Topic | India (EPF) | Hong Kong (MPF) |
|---|---|---|
| Rate | Employer and employee contributions on wages; international workers on full wages as generally applied | 5% each of relevant income up to HK$30,000 a month, so at most HK$1,500 each |
| Who is covered | Employees of covered establishments; international workers from countries without an agreement | Employees aged 18 to 65, with exemptions for some foreign employees and members of exempt schemes |
| Overseas secondees | Covered once working in India for an Indian establishment | Employees employed in Hong Kong generally remain covered; confirm with the MPF Authority |
| Agreement relief | None for Hong Kong | None |
Secondment, local contract or business trip
| Model | Employer for Indian tax | Points to watch |
|---|---|---|
| Short trip for meetings | Hong Kong employer | Visa category and day count; PE risk if staff conclude contracts |
| Secondment to the Indian subsidiary | Indian subsidiary directs the work and bears the cost | Salary taxed in India; EPF; recharge priced under transfer pricing; Withholding Tax on the reimbursement |
| Local Indian contract | Indian subsidiary | Cleaner for Indian law; Hong Kong employment status, MPF and salaries tax on exit need planning |
The secondment letter
- State the employer of record, the reporting line, the term, the pay split and who bears Indian tax and provident fund.
- Add confidentiality, intellectual property assignment and return-to-Hong Kong terms.
- Make sure the Indian subsidiary controls the work, or the person may be seen as working for the parent and create PE risk.
Immigration
Visa categories, registration and clearance are covered in relocating Hong Kong staff. Align the tax and immigration plans so that the visa matches the real work.
Official sources
Check the rules at the primary sources: Income Tax Department (India), Reserve Bank of India, Ministry of Corporate Affairs, Inland Revenue Department (Hong Kong), Companies Registry (Hong Kong) and the Ministry of External Affairs (India).
Frequently asked questions
Is there a social security agreement between India and Hong Kong?
No. A certificate of coverage is not available, so Hong Kong staff in India fall under the Indian provident fund rules for international workers as generally applied.
Does a Hong Kong secondee still pay MPF?
Employees employed in Hong Kong generally remain within MPF, subject to its exemptions. Confirm the position for your assignment with the MPF Authority or a Hong Kong adviser.
How much is the mandatory MPF contribution?
5% of relevant income each for employer and employee, with a ceiling of HK$30,000 of monthly income, so at most HK$1,500 each. The income limits change from time to time.
Is salary for work in India taxable in India?
Yes, unless the treaty's employment article conditions are met. A secondee whose cost is borne by the Indian subsidiary normally does not meet them.
Who deducts Indian tax on the salary?
The Indian employer, under Section 392 of the Income-tax Act, 2025, by the 7th of the following month.
Can I avoid double contributions?
Not through an agreement. Structure the assignment, for example as a local contract or a short trip, only where the facts support it, and budget for both schemes where they apply.
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Last updated 26 October 2026. General information only, not legal or tax advice. Indian and Hong Kong rules change often; confirm current requirements before acting.