Hong Kong: This Indian couple prefers to live in ‘world’s most expensive city’ to save more money; here’s how
High rents and costly services can make Hong Kong seem difficult for Indian professionals. However, Aarushi Sharma and her husband found that higher expenses tell only half the story.
Speaking to Mint, the couple explained how salaries, taxes and public services balance their budget.
Sharma, 26, moved to Hong Kong in February to join Sai C. Araveti, 30. Her husband moved a year earlier. Both have worked in venture capital while Sharma has since launched a jewellery business.
Initially, Sharma kept converting every expense into rupees. That made almost everything seem of poor value compared with India.
A small apartment measuring around 300 square feet can cost ₹1.8-3 lakh monthly. Gym or yoga sessions can cost upwards of ₹1,400 per visit. Imported groceries also increase supermarket bills.
Mercer’s 2024 ranking named Hong Kong the world’s most expensive city for expatriates. Mumbai, the highest-ranked Indian city, ranked 136th.
The couple rents an apartment measuring 550 square feet. Their rent takes around 20% of household income. Sharma considers this reasonable locally although the same spending buys much more space in India.
Some young professionals, she said, spend half their salaries on rent. Public transport helps the couple control other expenses. Their rides cost ₹80- ₹250. A subsidy also reimburses a portion of eligible monthly transport expenses.
Together, utilities, groceries and commuting account for about 10% of their income. Imported fruits, dairy products and Indian staples push their grocery spending higher.
Neighbourhood noodle shops and local cafes offer reasonably priced meals. However, fashionable cafes, bars, salons and domestic help can feel expensive.
Public sports facilities provide cheaper alternatives to private fitness services. A swimming pool visit, for example, costs around ₹200.
Despite spending more, the couple maintains roughly its Indian savings rate. Sharma credits higher salaries, lower taxes and low inflation.
Career opportunities in Hong Kong
Career opportunities in Hong Kong are stronger in finance, banking and luxury retail, according to Sharma. Finding work can become harder outside finance or without Cantonese for locally focused roles.
Employer sponsorship usually supports work visas while eligible dependents can generally work without separate sponsorship.
Sharma found starting her business quickly and largely online. However, expensive offices and local administrative requirements make daily operations challenging. She, therefore, runs her jewellery venture mainly online.
Investments
The couple continues investing in Indian markets through mutual funds and exchange-traded funds. Around 40-50% of their portfolio accesses American and Chinese markets through exchange-traded funds.
They aim to achieve financial freedom by 45, supported by passive income and a debt-free status.
They remain undecided about settling in Hong Kong. They want to explore other countries before having children while also valuing opportunities in India.
Tax rate: Big differentiator
Hong Kong charges a 15% income tax on individuals earning ₹6.09 crore or less. For the rest, the standard rate is 16%. However, that does not mean that people earning ₹10 lakh in Hong Kong pay ₹1.5 lakh in income tax.
The Hong Kong Inland Revenue Department (IRD) automatically calculates the applicable tax using two methods.
In the Progressive Rate System, tax is calculated on the net chargeable income after deducting personal allowances. It uses steps from 2% up to 17%. The Standard Rate System charges a flat 15%. IRD automatically chooses the system that asks individuals to pay lower tax.
Let’s assume that the couple earns ₹50 LPA. According to a rough estimate, the couple pays around ₹3.57 lakh in taxes in Hong Kong. For the same income, they would have paid ₹11 lakh in India.
By staying in Hong Kong, the couple is saving around ₹7.5 lakh every year, assuming they earn ₹50 LPA. If they earn more, their savings are likely to go even higher.