Welshdad,
I don't have any personal experience with hiring a second helper but these are my thoughts.
Just as carang pointed out, having a live-out foreign domestic helper (it's different for local domestic helpers), while common, is illegal under HK law and whether or not that becomes an actual issue depends on a lot of things--namely how well your relationship with the helper(s) remains and whether or not they or someone else would rat you out to immigration in the event that things sour.
I think that if you don't have room at present for another domestic helper (and you are required to tell how big the sleeping space for every helper will be on the forms) it's not the right time to hire another one. I think it would be irresponsible to hire someone who will not be able to have a place to sleep (by law they are supposed to have access to a room with a door, whether they are sharing a room with someone else or not doesn't matter so much). One option might be to get a bunk bed and put it in the current helper's room if the space allows--therefore that room could serve two people.
I also think that any helper who is worth her weight will be able to handle two children almost as easily as one. If you prefer to hire another helper so that each child has 100% attention from one adult at all times, then that's how it is. However, as carang also pointed out, it's not really a necessity in most cases. There are plenty of women in Hong Kong who are great mothers and care givers that take care of 1, 2, 3 or even 8 children (in my village there are a few of those) and do a pretty good job. But, if you're set on getting an additional helper, keep in mind that you do need have them living in your home with you if you want to do things by the book and protect yourself.
As far as hiring a cousin etc, if it were me, I probably wouldn't go for that unless my helper had been working for me for some time and she was an amazing person who had really impressed me with her honesty and ability as a worker. The way I see it is, when it comes to works in my home for me, I'm the boss and while I might consider a helper's suggestion, I would definitely not want to feel like she was calling the shots like that. There are others who would disagree with this, based on their own positive experiences with recommended relatives, I think, though. When it comes to business, I think it is a rare thing when business and family mix well too--so while it may seem like a good idea, if things sour you've got a family feud going on under your roof.
Additionally, I would suggest that if you're in a pinch to hire someone to come in during the day and take up some of the slack for the first helper, why not hire a local HK lady? Some speak English and even if not, your helper should know rudimentary Cantonese (and you may also be able to learn some)--you don't have to worry about live-out/live-in issues and although it's a bit more spendy, if you're going for a second helper anyway, maybe you have the money for that? Just a thought. I had a local Chinese lady as my first helper when my son was a newborn--she came at 10 am and left at about 6 pm and honestly, she was the best helper I've seen so far. However, as she was from Mainland China, married to a local man, we spoke mostly Mandarin together (which I studied before so have a basic handle on the language). It was great for language learning, actually. Wish that she was still available to help out some days--she had 150% more common sense and ability than our last helper from the Philippines. So, local ladies can make fantastic helpers too!
