In his report to the 19th National Congress of the Communist Party of China in October 2017, President Xi Jinping pledged to support the integration of Hong Kong into China’s national development strategies, and to formulate policies and measures facilitating Hong Kong residents studying, working and living on the Mainland. As a major initiative under such a direction, the State Council announced the Regulations for Application of Residence Permit for Hong Kong, Macau and Taiwan Residents (港澳臺居民居住證申領發放辦法) (Regulations) earlier this month. Groups expected to benefit include Hong Kong people working or studying on the Mainland, children born in Hong Kong whose parents are not Hong Kong permanent residents, and retirees living on the other side of the border. It is anticipated that the Regulations will make their lives on the Mainland more convenient.

The Regulations resemble the Interim Regulation on Residence Permits (居住證暫行條例), which is applicable to the mobile PRC population residing in cities away from their places of hukou (permanent residence). Under the Regulations, a Hong Kong, Macau and Taiwan resident may apply for a residence permit if he has lived on the Mainland for over half a year and satisfies one of the following requirements: (i) having legitimate and stable work, (ii) having a legitimate and stable residence or (iii) conducting continuous study. Each residence permit is valid for 5 years, and will be issued by public security organs at county level. The ID numbers for Hong Kong residents will begin with “810000”.

According to the Regulations, Hong Kong residents holding a residence permit will be entitled to enjoy 3 categories of rights, 6 basic public services and convenience measures in various areas. These are:-

3 categories of rights (exercisable in the place of residence in accordance with the laws)

  • Right to employment
  • Right to participate in social insurance
  • Right to pay, draw on and use housing provident fund

6 basic public services:

  • Compulsory education
  • Basic public employment services
  • Basic public health services
  • Public culture and sports services
  • Legal aid and other legal services
  • Other basic public services prescribed by the State or the place of residence

Convenience measures in the following areas:

  • Taking domestic flights, trains or other transportation
  • Staying in hotels
  • Attending to banking, insurance, securities and futures and other financial businesses
  • Same treatment as PRC residents when shopping, purchasing tickets for parks and cultural and sports venues, and conducting any consumer activity related to culture, entertainment and travel
  • Motor vehicle registration at the place of residence
  • Applying for driver’s licence at the place of residence
  • Enrolling and participating in occupational qualification examinations and applying for occupational qualification at the place of residence
  • Attending to birth service registration at the place of residence
  • Other conveniences prescribed by the State or the place of residence

Some of the rights/services above are already accessible to Hong Kong residents even before implementation of the Regulations. However, the promulgation of the Regulations will provide for a more structured framework under which Hong Kong residents (who hold PRC residence permits) will receive equal treatment as their Mainland Chinese counterparts in daily lives. The measures introduced in the Regulations also serve to resolve some of the practical inconveniences faced by Hong Kong people living across the border (e.g. Hong Kong people holding residence permits should be able to board high-speed trains without first collecting physical tickets, open bank accounts and register for certain mobile applications in the future using their PRC resident cards).

Hong Kong people meeting the criteria aforementioned will be able to apply for resident permits under the Regulations with effect from 1 September 2018. Nevertheless, it may take some more time before holders of the residence permits can fully enjoy the rights, services and convenience measures promised under the Regulations. The Regulations set out the overall policy on a macro level. There are not yet many details on the implementation of such rights, services and convenience measures or how the new initiative will link up with the other governmental authorities or regulations (e.g. social security bureau). Probably more guidance or rules will be issued in the coming future for the actual operation of the arrangement.

Another uncertainty relates to the relationship between the Regulations and the PRC tax law. Whether holding a PRC residence permit will affect one’s tax identity in the eyes of the PRC tax authority is not entirely clear yet. The PRC individual tax law is also currently under reform. We hope that the authorities will clarify on this issue very soon.