Can an online store use freelancers or overseas staff, and what changes for the owner?

Many online sellers use freelancers for design, customer service or content, and virtual assistants abroad.

Employee or contractor? In Hong Kong the courts look at the whole relationship, including control over how and when work is done, whether the person provides their own tools and takes financial risk, integration into the business, and exclusivity. A contract that calls someone a freelancer is not decisive. If the person is an employee, the Employment Ordinance, MPF and compensation insurance duties apply.

Tax: payments to genuine contractors are generally business expenses if incurred to produce profits, and you should keep invoices. Payments to persons outside Hong Kong may raise withholding or other tax questions in some cases, for example for royalties.

Overseas staff: hiring someone who works from another country can create employment, payroll or permanent establishment issues there. DIPN 39 notes that where staff carry out core operations determines where profits arise, so staff location can also change the source of profits.

Get advice before building a team across several countries.