01.03.07. Prevalence of the informal economy | Hong Kong SAR

01.03.07. Prevalence of the informal economy | Hong Kong SAR

16 Aug 2022

Economy activities are highly regulated and mostly taxed in Hong Kong. Most of employers are regulated by the Companies Ordinance and the Society Ordinance, whereas all forms of employment, including full-time, part-time, permanent, and temporary, are protected by the Employment Ordinance and Employee’s Compensation Ordinance. For self-employed individuals without a contractual agreement, their rights and benefits are less protected, and their income is taxable. As a result, the size of informal economy in Hong Kong is very small. The followings are the two major types of informal workers in Hong Kong: 1) foreign domestic helpers and 2) hawkers.

Foreign domestic helper is the main type of informal care workers in Hong Kong. By the end of 2018, there were a total of 386,075 foreign domestic helpers in Hong Kong (Census and Statistics Department, 2019j) and they comprised 5.2% of HK population as well as 9.7% of labour force (Census and Statistics Department, 2019j). Their income is not taxable. It is important to note that, unlike other countries, the rights and benefits of foreign domestic helpers in Hong Kong are protected, as well as the local citizens by the Employment Ordinance and monitored by the Immigration Department.

Hawkers refer to vendors selling street food and inexpensive goods in Hong Kong. Due to concerns about the city’s hygiene and health, the Government has begun to decrease the number of hawker licenses and impose stricter restrictions on hawking activities since 1970s. The number of licensed hawkers had dropped from over 70,000 in 1940s to 50,000 in 1970s. By the end of 2018, there were only 5,531 licensed hawkers, including fixed-pitch or itinerant (i.e., travelling) hawkers. At the same time, the Food and Environmental Hygiene Department has exerted strict control over illegal hawking activities and there were only around 1,511 hawkers by the end of 2018 (Food and Environmental Hygiene Department, 2019, September 5).


Census and Statistics Department. (2019j). Women and Men in Hong Kong – Key Statistics 2019 Edition. Hong Kong Retrieved from https://www.statistics.gov.hk/pub/B11303032019AN19B0100.pdf

Food and Environmental Hygiene Department. (2019, September 5). Hawker Control. Retrieved from https://www.fehd.gov.hk/english/pleasant_environment/hawker/control.html