Moving Back to Canada from Hong Kong

Important News:

"So, now what?" These continue to be uncertain times for many Canadians in Hong Kong due to ongoing changes there and a question on many people's minds is "Now what? What happens next?" In light of continued uncertainty, economic changes, and other considerations, please take a pause now to ensure that you have a Canadian "Plan B" for your life. Consider what life might look like if you move back to Canada either temporarily or permanently as part of the current and coming changes in HK.

Some important notes for your planned return:

• While life in Hong Kong seems to have stabilized at this time long term change is underway and many Canadians there are ensuring they have their "affairs in order" so they can move back to Canada on relatively short notice if the need arises.
• I am hearing a number of reports from returning Canadians flying back from Hong Kong and having their list of belongings scrutinized for high value items and particularly jewellery. In the past CBSA Customs Officers usually allowed family jewellery to pass through easily and without duties, taxes or complications. Now, any expensive jewellery pieces (and particularly those worth more than CDN$ 10,000) may be identified and scrutinized. Be sure to have receipts and/or valuations done on expensive jewellery you are bringing to Canada to ensure you won't be charged duties and taxes. Further, for any relatively new electronics or other items of value bring receipts and have serial numbers, if applicable, with you. You won't likely be taxed on these items if you have proof of purchase with you when you go through Customs at the airport. If not, the CBSA Customs Officer might estimate taxes and potential duties at their discretion.
• Use the resources on this Hong Page-specific page and this whole web site to help you plan a temporary, staged, or permanent return to Canada if it is the right thing for you to do in the coming months.
  
  Need help with your move back to Canada? Please engage my professional support to get the support you need right now.

Introduction

Returning to Canada from Hong Kong can be a smooth and easy transition or a more complicated one, depending on how long you have been away from Canada and whether your life conditions have changed dramatically. Given the long history between Hong Kong and Vancouver, particularly, it is no surprise that many people are moving back and forth. Some stay in Hong Kong for only a couple of years and others live there for decades before deciding to return and take up residence in Canada again.

There continues to be a steady stream of Canadians living in Hong Kong, and non-Canadians residents of Hong Kong as well, moving to Canada: "A third of Hong Kong’s population wants to leave, says a survey released by the Chinese University of Hong Kong...and Canada was cited as the most desired destination" (The Globe and Mail). As Hong Kong has a population of 7.5 million, one-third is a lot of people wanting to come to Canada!

Before you, the Canadian citizen living in Hong Kong, decide to move back to Canada it is likely a good idea to really consider why you want to move back. Life in Canada is quite different from life in Hong Kong, and not just because of taxes and real estate!

Some of the commonalities between Canada and Hong Kong:

• High real estate prices
• Large expatriate communities in both countries and particularly in Vancouver here on the Canadian side.
• Former connections to the UK - both Canada and Hong Kong were parts of the British commonwealth from business and strategic geopolitical perspectives. Canada and Hong Kong share a complicated relationship to the UK that historical ties created.

Some of the differences between Canada and Hong Kong:

• Different economic systems. Hong Kong has a far more entrepreneurial and complex business and economic system than Canada in general. Canadians are generally quite focused on "jobs" and on making money within established pathways and processes. Like Hong Kong, the U.S. is where people go to try new things and create "outside the box" ventures.
• Taxes & money. While I could have put this under "different economic systems", above, it is so important a consideration that it deserves a separate line here. The #1 area I support clients with is in the areas of taxes, investments, and business arrangements. The famously low tax rate in Hong Kong, coupled with a highly entrepreneurial and business-friendly environment means that care must be taken when returning to Canada. You want to protect what you have worked so hard to build up while you lived in Hong Kong!
• Different legal structures and dynamics. The differences cannot be captured in a single statement, but they shape both the functional and the mindset of our respective thinking. Understanding how the different systems work - and are enforced, is critical before returning.
• Different lifestyles. From schooling to food to the speed of everyday life activities, living in Canada is vastly different from life in Hong Kong. Planning your lifestyle in Canada before you return is wise in order to ensure you create the experience you want. Slowing down to Canadian speeds is an example of one challenge you might face. High speed business and 24 hour living in Hong Kong can be exciting! But in Canada you will have to wait for someone to take action on an email, FB message, or text message. In Hong Kong you might get an immediate reply at 11:00pm at night. Not so in Canada. This surprises some people moving back from Hong Kong.
• Different infrastructure, such as electricity (220v), transportation systems (Hong Kong is more densely populated than Vancouver, Calgary, Toronto, or Montreal), language, government systems, retirement pension systems, etc.
• Geographic orientation. Hong Kong is oriented toward China and the rest of Asia in general and is influenced by the region in every way. Canada is oriented toward the U.S. and similarly, this has deep implications for how life "works" here.
• Prices & Costs: Not just real estate...but everything is priced differently in Canada compared to Hong Kong. In some cases things are cheaper in Hong Kong, but in others Canada is cheaper.

Resources for returning to Canada from Hong Kong

Moving your belongings

Unless you can ship by air freight a few suitcases and boxes, a 20' or 40' sea container is likely your best option for shipping things from Hong Kong. The more or less direct path to Vancouver makes this the most reasonable option for medium and large households.

Patrick W. shares his tips on shipping your belongings back after living in Hong Kong for over 20 years:

I have been living in Hong Kong most of the time, and am shipping the household stuff from there. Make sure you compare prices and services there when you are choosing the shipper. Our apartment is less than 400 sqft net, but was first quoted by Baltrans with a 20' container (~1050 cuft) costing HK$42K. As we have stuff in a separate warehouse, they charge additional HK$3.5K for the pickup and packing. We then contacted Santa Fe, who estimated our volume more professionally at ~580 cuft with a final quote of HK$27K. I questioned Baltrans how they come up with 1050 cuft., and told them another company's estimation is 580 cuft only. Baltrans came up with a revised quote with volume at 680 cuft., then further reduced to 580 cuft. but they increased the unit cuft cost so there was little difference in the final quote i.e. ~HK$32K. When asked how they provided the updated estimated volume vs. higher unit cuft cost, their sales manager just blasted off saying there is no money in the business and he has been reducing his price from HK$45K! He strongly advised us to go with another company who is offering lower cost, and said he did not want our business.... We did and worked with Santa Fe. They are professional in the sales and pickup/packing processes. So far, I am happy with them and am awaiting the cargo to be delivered in Vancouver.

- Patrick W. Thank you, Patrick for sharing your experiences and suggestions!

Taxes

Taxes are the #1 area I support clients with who are moving back to Canada from Hong Kong. As you know, Hong Kong has a really low overall tax level, including income tax. Canada has a much higher overall tax impact on earnings and spending. Being careful to have a clear "non-resident" relationship to Canada while living in Hong Kong means you can move back to Canada and not be taxed on any of your earnings and accumulated wealth that you bring with you to Canada.

Frequently Asked Questions

1. "I heard that when I move back to Canada the Canadian government will tax all the money I made in Hong Kong since I moved here 12 years ago! What do I do about this?!"

Answer: No.

The government of Canada does not tax any money you earned in Hong Kong while you are a tax resident there and have no strong residential ties to Canada during that period.

2. "My accountant in Hong Kong [or in Canada] said that any money I receive for an end-of-service payout or pension payout (including a Mandatory Provident Fund payout) after I move to Canada will be fully taxed by the Government of Canada! What do I do about this?!"

I have heard this over and over for 20 years.

One answer: Only money earned ("income") after you move back to Canada is logically taxable in Canada. This includes income from work, investments, businesses, monthly pension income, etc. Any amount of money earned or accrued to be paid out to you before you moved back is taxable only in Hong Kong. For example, the total value of a pension fund that you cash out when you move back to Canada is a lump sum that is already yours and should not be taxable in Canada. If at the time you move back you are owed a lump sum payout (and have clear proof of this) for a soon-to-be-received MPF payout does it not make sense that this is not "income earned while you are living in Canada". This is a kind of "account receivable" and not "income".

However as no accountant returning Canadians have talked to will support this simple logic some people are put into a state of uncertainty and worry.

Note: The lack of clarity around this is two-fold: First: Accountants will almost always side with the tax authority and say "it is taxable" to protect themselves and second: If you have a pension that pays out monthly, which is the usual case, then those monthly payments are taxable in the jurisdiction they are in and taxable in Canada too. You get a foreign tax credit for any taxes withheld in the originating jurisdiction so you are not fully double-taxed. But there can be extra taxes paid in Canada in the case of a Hong Kong sourced monthly pension payment because tax rates are higher in Canada than in Hong Kong.

Suggestion: To be 100% sure there will be no questions asked do not move back to Canada until you have received your MPF payout, end-of-service payment from an employer, funds from the sale of property in Hong Kong, etc. Wait in Hong Kong, go travelling for awhile in a third-party country, etc. Once you have the funds in your bank account and you then move back to Canada? It was an asset you had already at the time you moved back to Canada and there will be no question by anyone. This is the easiest and clearest way to handle this situation.

3. "I heard that the border guards will tax all my jewellery when I arrive at YVR! What do I do about this?!"

Answer: No. The CBSA will tax your personal jewellery only if you are bringing it to Canada for resale or if you have been in Hong Kong for a short period of time. Items over $10,000 in value should be identified separately with a photo and all jewellery over about $1,000 should be brought to Canada with their original purchase invoices / receipts or a professional jeweller's valuation.

4. "I have a substantial amount of money invested in the stock market in Hong Kong. Is it legal for me in Canada to leave it here? The tax rate is lower here than in Canada."

Answer: Yes, it is legal to leave investments in Hong Kong or anywhere in the world when you move back to Canada. However, please note that once you are "tax resident" (living) in Canada you must declare your world-wide income from all sources on your Canadian tax return and pay Canadian tax rates. You will not be double-taxed, to be clear, in that any taxes you pay in Hong Kong will receive a tax credit on your Canadian tax return. But you will pay the higher Canadian taxes on all your income, including from your Hong Kong investments.

For more information on taxes, please see the Tax, Accounting, and Banking resource on this web site.

If your situation is complicated and/or you wish to get clear financial and/or tax guidance when you are planning your return please engage the support of appropriate financial and tax professionals in Hong Kong. You may not like all the answers (like with the MPF payout after you move back question noted above) but you will be better informed so that you can arrange and time your move in a way that works for you.

Pensions - Retiring in Canada

A common question I hear from those retiring from Hong Kong back to Canada is about pensions in Canada. I created a full Retire in Canada resource that includes a pension terminology comparison chart between Hong Kong and Canada so you can understand the differences.

Overall, my many clients who have retired in Canada have found the transition quite smooth. They miss the speed with which things happen in Hong Kong, the easy access to other areas of Asia, the warm climate but they do enjoy the sense of being at home in Canada and ability to relax and enjoy their retirement. Most retirees returning from Hong Kong move to the Greater Vancouver area or Toronto.

Foreign exchange & sending money to Canada

Obviously, there are foreign exchange implications between Hong Kong and Canada. You may be holding several currencies while in Hong Kong, including of course, HKD and USD. When you return to Canada you may be converting funds to CAD, which is highly influenced by the USD.

As the HKD is basically pegged to the USD and changes very little compared to the USD, the real currency to be concerned with is the USD in the context of your move back to Canada or the return of funds to Canada.

The above graph gives you a snapshot of the exchange rate over time. Movements in rates are not as dramatic as between other currencies, but this is a time of tremendous change in economies and politics around the world and there can be unusual shifts coming up.

Some foreign exchange considerations:

• How long are you willing to keep your funds in HKD and other currencies before you wish to convert them to CAD? Timing your conversions to depend on when you need the funds compared to when the best exchange rate might be could benefit you financially.
• If you own property and/or investments in Hong Kong that you intend to keep, are you concerned about volatility in exchange rates? Are you planning on keeping one foot in Canada and another in Hong Kong or elsewhere in the world? These are considerations to think about before you move all your assets to Canada.

Sending money to Canada

You can send your savings to Canada in more than one way. The most common is the use of a foreign exchange firm such as OFX noted above that gives you a much better exchange rate than either a Hong Kong bank or a Canadian bank when the funds are exchanged to CAD.

In summary, you send HKD/USD from your Hong Kong bank to a foreign exchange company who converts it at a very good rate and then sends CAD to your Canadian bank account. You often get many more CAD this way (my clients are gaining thousands of dollars on large transfers) than if your Hong Kong or Canadian bank did the exchange as part of the transfer.

Please see the transferring money to Canada resource page which details the reasons for using a foreign exchange company and some client testimonials on their use.

The other options is to use an international bank which has branches in Canada. In the past HSBC in Hong Kong could open an account in Canada for you. Then, you could simply move money within HSBC from your Hong Kong account to your Canadian HSBC account.

Important note: As of early 2024 HSBC no longer exists in Canada. RBC (Royal Bank of Canada) purchased HSBC's entire Canadian retail banking division and converted it to RBC branches. You cannot use HSBC in HK to open an HSBC account in Canada anymore. There may be other international banks operating in HK but it is now best to use a foreign exchange company to convert your funds to CAD before they arrive in a Canadian bank account.

D. Lee shares his experiences and suggestion for the use of a investment broker for FX, another option for those with an international brokerage account but a more complicated one for most people who do not have such an account because you are now dealing with a brokerage firm over a much more simple to work with foreign exchange firm:

Currency Exchange. ... I think the best way to do currency exchange is through Interactive Broker (IB)---a well-known stockbroker. It provides THE BEST exchange rates which are much better than any bank [Paul's note: Foreign exchange firms offer as good or better exchange rates than IB and are far less complicated to work with]. IB provides a free wire transfer to international banks per month. This is also another economical and secure way of doing money transfers. IB can also transfer a client's account from one country to another. This might be very handy for those who are not able to set up a Canadian banking account before landing or those who plan to buy US stocks from their RRSP or TFSA accounts. (IB Candaa supports RRSP and TFSA.) The only downside of IB is the 10USD monthly fee, which can be waived if the account has over 100,000USD assets.

Lifestyle

As mentioned earlier, lifestyles are very different in Canada than in Hong Kong. Think VERY carefully about what kind of life you are considering in Canada before you make the move back. Here are a few lifestyle considerations when thinking of returning to Canada:

• The difference in everyday "speed" of life alone is one of the most impactful differences! Do you love speed or would you be happy to slow down to Canadian speed?
• Temperature. Hong Kong is so much warmer all year round! Do you want to give this up? If yes, great! If not, after you return to Canada plan for travel to warm places to ensure you don't fall victim of Seasonal Affective Disorder that can happen to those moving back to Canada.
• Schooling. The choice of school can be important in Hong Kong, including private versus public. While private schools are available and popular in Canada, most public schools are just fine and are the dominant choice for returning Canadians. What do you want for your children?
• Nature. If you move to most places in BC, including Vancouver, you have access to wonderful natural areas. Toronto? Not so much. If high-speed city living is what you love, consider moving to Toronto rather than Vancouver, for example. If nature and more relaxed living is important to you, consider Vancouver, other places in BC, or a smaller city anywhere in Canada.

In summary, lifestyle differences can be considerable between Hong Kong and Canada. Be sure to really understand them. A client who moved back to BC in 2019 chose a smaller place in the province over returning to the Greater Vancouver Area. He did this to give his family a different experience. While culture shock will be a reality for his family it will give them an opportunity to live life differently. Is this something you want? Or would you prefer a more traditional lifestyle in a city like Vancouver or Toronto?

Real Estate

One of the key questions I hear from clients is whether to keep or sell their real estate in Hong Kong. Given the events of 2019 and 2020 in Hong Kong this may be a non-question for many as it is hard to sell their properties. Others have found that in 2021 and in 2022 they could sell and are doing much better with their selling price. Some general considerations that may help with the "keep" or "sell" question:

On one hand, those living in Hong Kong are encouraged to keep their real estate because they are hearing "prices will go up in the future!" or they might want to keep a foothold in Hong Kong in case they wish to return some day.

On the other hand, prices might not go up, they might need the funds to purchase a property in Canada or for living costs here, and/or they might want to have all their assets in Canada once they return. This last point - having all assets in Canada - can be important for a sense of security and safety given the complicated times in Hong Kong and the world at this point in history.

Clearly, there is no definitive answer and every client context is different.

Should you wish to keep real estate in Hong Kong instead of selling it when you return be sure to have a valuation done of it at the time of your move. This value is the basis upon which you will calculate gains for Canadian tax purposes because once you are resident in Canada again, your world-wide income and capital gains are taxable here.

A resource to help you determine the value of your Hong Kong real estate:

"How much is your [Hong Kong] home really worth?"

For thoughts on purchasing real estate in Canada once you return, check out the "Buying real estate in Canada" page of this site.

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Your ideas, considerations, and experiences?

Canadians living in Hong Kong planning on moving back to Canada: Please share your ideas, thoughts, and experiences relating to returning to Canada from Hong Kong. I will post your thoughts here as help for others. Along with a credit to you will be a big thank you on behalf of the many people you will be helping!

Thank you!

Paul Kurucz

Canada

Latest update to this page: September 2024.

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I offer professional support to help you prepare for a smooth and easy return to Canada so you can feel confident and organized!

Your questions about when to move back, taxes, investments and finances, bringing back your household belongings, health care, and more will be answered promptly and professionally, with resources to back up what you need. My 20 years of supporting over 1,300 clients gives me a depth of expertise across all aspects of planning and returning to Canada.

Paul Kurucz - Canada

A happy client:

Hi Paul,

Just to update you - we landed and sailed through customs! So thank you so much for all of your advice...It was a thoroughly pleasant experience.

This is to say thank you for everything. Your advisory has been so incredibly helpful and saved us considerable time and removed room for error.

With best wishes,

Caroline

Paul's professional support

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