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The Impact of Brain Drain on Hong Kong and Resulting Immigration Policy Development

August 4th, 2023

Posted by / in Employment Visas, Investment Visas, Musing, Special Programmes / 5 responses


 

The Impact of Brain Drain on Hong Kong

First Published On May 25, 2012, Updated (A Bit) August 4, 2023, The Again October 10, 2026

The Impact of Brain Drain on Hong Kong: the term “brain drain” first appeared in 1957 in a novel called Atlas Shrugged and the term refers to the loss of skilled researchers, analysts, the accomplished and the talented – for political, industrial and social reasons.

Impact of Brain Drain on Hong Kong

The Impact of Brain Drain on Hong Kong – The Struggle Is Real

It’s currently frequently utilized as a dramatized synonym for loss and could be outlined as “the world transfer of resources in the shape of human capital” and “the loss of abilities or human capital to society or to the country from which migration takes place“.

Brain drain appeared in Hong Kong in 1987 when a major wave of emigration was seen experienced due to the uncertainties surrounding Hong Kong’s future in light of the 1997 hand back to China. The trend endured in the following decade thanks to the concerns of some HK residents, particularly those educated and professionally talented, about the political future under Mainland Chinese sovereignty and the enlarging immigration opportunities to be had in the more well-liked destination nations.

The Impact of Brain Drain on Hong Kong – They Leave, They Return

An annual average of 55,000 émigrés left Hong Kong between 1989 and 1995. This resulting outflow of talent impacted on the economy of Hong Kong in four discrete ways. More recent, 140,000 young (and not so young) professionals and talents decamped from Hong Kong die to the 2019 Protests and the draconian Covid19 rules in place in Hong Kong through the end of 2022.

Loss of Efficiency

In order to compensate for the lack of professionally trained employees due to their emigration, junior staff were promoted ‘beyond their station’ to take up their vacancies. As such junior staff had neither adequate coaching nor experience for these higher level positions, the standard of service and operational effectiveness were significantly negatively impacted.

Productivity of Subordinates

The exit of the very skilled influenced the output of their subordinates due to the lack of their supervision. The economy so suffered an indirect loss of output.

Loss of Human Capital

Émigrés were often highly educated, had received significant job related training and were well-experienced in their work having typically been engaged with their employers or within their professionals since the end of their formal education. Their exit represented a great loss of human capital to Hong Kong’s economy.

Outflow of Capital

In the exit prior to the 1997 Handback, most émigrés left Hong Kong with their wealth. Depending on their destination of choice, quite a number of them had to commit significant sums of capital in their new countries in order to qualify for immigration overseas.

The Impact of Brain Drain on Hong Kong – HKSAR Gov – Takes It Seriously

To address the issues caused by brain drain in the 1980s and 1990s, the government of Hong Kong took concrete measures in the development and implementation of immigration policy.

These initiatives including retention, return migration, replacement and retraining. Among those measures, replacement was a comparatively simple and acceptable way to fill the vacancies of the émigrés. Aside from the swift growth of tertiary educational opportunities, the HKSAR Government has relaxed its limitations on the importing of professionally trained employees, particularly those from the Mainland, to fill manpower openings.

Out of the phenomenon of Brain Drain emerged the Admission of Mainland Talents and Professionals Scheme, the Quality Migrants Admission Scheme, the Immigration Arrangements for Non-local Graduates and the Capital Investment Entrant Scheme. In the meantime, the private sector has responded aggressively to the lack suitable talent caused by emigration by employing more expatriates under the General Employment Policy.

More recently, they set up the Talent Service Unit.

The Top Talent Pass Scheme Comes to the Rescue

The Top Talent Pass Scheme (TTPS) remains the flagship initiative in Hong Kong’s talent admission architecture. First unveiled in the Chief Executive’s 2022 Policy Address and launched in late December 2022, the scheme was designed to counter outbound migration and rebuild Hong Kong’s professional workforce in the post-pandemic era.
Over the past four years, the TTPS has shifted from an emergency, volume-driven talent-attraction tool into an institutionalized, rigorously scrutinized pathway to Hong Kong residency. Tens of thousands of primary entrants and their dependants have relocated under the program. However, the policy focus of the Immigration Department (ImmD) and the Labour and Welfare Bureau has pivoted from headline approval figures to genuine economic contribution, physical residence, and substantive local integration.

The Three Eligibility Categories

The TTPS provides a direct route into Hong Kong without requiring a pre-existing job offer or commercial sponsorship at the time of initial entry. Applicants are segmented into three distinct categories based on earnings, academic pedigree, and professional tenure:
Category Primary Eligibility Threshold Quota Initial Stay
Category A Annual taxable income of $\ge$ HK$2.5 million (or foreign equivalent) in the preceding 12 months. Unlimited 36 months (3 years)
Category B Bachelor’s degree from an institution on the Eligible Universities List + at least 3 years of work experience in the past 5 years. Unlimited 24 months (2 years)
Category C Bachelor’s degree from an institution on the Eligible Universities List within the past 5 years with less than 3 years of work experience. Capped at 10,000 per year 24 months (2 years)

Category A: High Earners

Category A does not impose any formal educational requirement. It evaluates pure earning power. The threshold is strictly pegged to taxable employment remuneration (salary, guaranteed bonuses, vested stock options) or net enterprise profit earned by a company in which the applicant holds a substantial, controlling ownership stake.
Investment income, real estate capital gains, and passive dividend receipts are formally excluded. ImmD requires official tax assessment notes, demand notices, or audited corporate accounts. Notably, following administrative revisions, Category A entrants receive an initial stay of 36 months, recognizing their senior executive and entrepreneurial profile.

Categories B and C: Top University Graduates

Categories B and C rely on the government’s expanded list of eligible institutions, which spans roughly 200 universities compiled from the four major global university rankings (QS, Times Higher Education, Academic Ranking of World Universities, and U.S. News) alongside selected specialized mainland Chinese and international institutions.
A critical procedural rule remains non-negotiable: the qualifying credential must be a bachelor’s degree. Holding a master’s degree or PhD from an eligible institution does not qualify an applicant if their underlying undergraduate degree was awarded by an unlisted university. Furthermore, Category C excludes non-local graduates who obtained their degrees from Hong Kong-accredited full-time programs; those individuals must apply under the Immigration Arrangements for Non-local Graduates (IANG).

Dependant Sponsorship and Family Rights

A primary advantage of the TTPS is its open family policy. Primary applicants may sponsor:
  • Legal spouses or recognized same-sex civil partners.
  • Unmarried, dependent children under the age of 18.
Sponsors must demonstrate genuine relationships, clear individual background checks, and the financial capacity to house and maintain all dependants without relying on public funds.
Unlike dependant regimes in jurisdictions such as the United States or Singapore, dependants under TTPS in Hong Kong enjoy unrestricted employment rights. Spouses may work for any Hong Kong employer, switch roles without immigration notification, or launch businesses. Dependent children are fully entitled to enroll in local government-funded schools, Direct Subsidy Scheme (DSS) institutions, or international private academies.

The Renewal Phase: Economic Substance and Scrutiny

Initial entry under the TTPS is granted purely on status without requiring a commercial anchor. However, the extension of stay (submitted within four weeks to three months prior to expiry) is governed by strict economic nexus requirements. An entrant can only be granted an initial entry under the TTPS once in their lifetime; if they fail to renew, they cannot reapply as a fresh candidate.
Applicants must secure approval through one of two pathways:
  1. Employment in Hong Kong:
    • The candidate must be actively employed in a role typically occupied by degree-holders.
    • The remuneration package must align with prevailing local market conditions.
    • Documentation includes formal employment contracts, local tax assessment notices (or employer tax returns), and Mandatory Provident Fund (MPF) contribution statements.
  2. Business Establishment or Participation:
    • The applicant must establish or join a genuine commercial enterprise in Hong Kong.
    • ImmD reviews business turnover, audited accounts, commercial office tenancy agreements, corporate banking flow, capital investment, and local headcount.
    • Shell corporations, zero-turnover nominee structures, and contrived self-employment arrangements are systematically rejected during renewal vetting.

Extension Patterns

  • Standard Extension: Approved applicants receive a 3+3 year extension pattern (or 2+3 years, depending on their original entry stream).
  • Top-Tier Employment Stream: Entrants who have resided in Hong Kong under the TTPS for at least two consecutive years and had an assessable salaries tax income of not less than HK$2 million in the preceding tax assessment year qualify for an immediate six-year extension of stay without interim condition limits.

Permanent Residency (Right of Abode)

TTPS holders and their dependants are on the statutory track to Hong Kong Permanent Residency (Right of Abode) under Section 2(4) of the Immigration Ordinance. Eligibility requires continuous ordinary residence in Hong Kong for not less than seven years.
A major area of friction is the definition of “ordinary residence.” ImmD assesses whether Hong Kong has been taken up as the applicant’s settled home. Factors evaluated include:
  • Continuous physical presence and the underlying reasons for any temporary absences (e.g., regional business trips vs. residing permanently overseas).
  • Maintenance of a bona fide residential address in Hong Kong.
  • Local employment, corporate presence, and payment of Hong Kong direct taxes.
  • Relocation of the immediate family unit and schooling of children in Hong Kong.
Holding a TTPS visa while continuing to live, work, and pay taxes outside Hong Kong will not count toward the seven-year continuous residence requirement, breaking the continuity needed for Right of Abode.

Strategic Realities

The Top Talent Pass Scheme remains a major vehicle for human capital recruitment in Asia. However, the initial phase of unrestricted entry has evolved into an active audit period. Hong Kong authorities demand measurable economic participation—through corporate formation, professional staffing, tax revenue, or high-value executive services. For candidates possessing the qualifying pedigree or earning power, the TTPS offers flexibility; however, converting initial entry into long-term permanent settlement requires early planning, verified local employment, and an ongoing residential commitment.

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The Hong Kong Visa Geeza (a.k.a Stephen Barnes) is a co-founder of the Hong Kong Visa Centre and author of the Hong Kong Visa Handbook. A law graduate of the London School of Economics, Stephen has been practicing Hong Kong immigration since 1993 and is widely acknowledged as the leading authority on business immigration matters here for the last 24 years.

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