How to open a business bank account in HK
Here is some important information to make things easier for you.
Now that you have completed all the process of registering your company in Hong Kong, have you selected a bank for opening the business bank account? If you are still wondering about the process and everything else related to opening a business bank account in Hong Kong, here is some important information to make things easier for you.
With the advancements in the world, companies can easily choose from the several local and international banks for opening a business bank account in Hong Kong. And if you had done your research correctly about Hong Kong before you started your business here or are about to start a business, you might already know that a large percentage of the companies in Hong Kong are small and medium sized enterprises, or SMEs. SMEs are also a significant customer base for the banks as well.
Essential finance requirements for any company are short term and long term loans, trade financing, internet banking, and excellent cash management facilities; which you are most likely looking into for your company. Do not worry though, since many major banks in Hong Kong, both international and local, have created services and products to address all the these needs.
Setting up a Hong Kong business bank account isn’t overly complicated, as it is relatively straightforward in its procedure. Nevertheless, before you can open a business bank account in Hong Kong with a specific bank, it is essential for you to be aware of what your banking needs are. The reason is so that you can match those demands with what each bank offers.
How to set up a business bank account?
Opening a business bank account in Hong Kong is a very straightforward procedure as mentioned above and it takes about two to three weeks for the process to complete. You need to keep this in mind as well as the other members of the company like the nominees, shareholders and directors have to visit the bank in person for the process to get completed in time.
Here are some tips that would help you on the go while you prepare everything to set up a Hong Kong business bank account:
- At first, if you or any of the other company members have to fly to Hong Kong especially for completing the process to set up a Hong Kong business bank account, it is better to hire an agency in advance so that they can help you to gather all the required documents and even guide you for the process. You don’t want to risk flying all the way to Hong Kong to realize you’ve missed some basic details in your application.
- Once you have decided on this, you need to know that each bank has its own process for the opening of a business bank account in Hong Kong and the documents that are required for the account opening. However, some documents are vital for the process, and they have to be prepared and kept ready before you visit the bank for the bank account opening.
- The day you are going to the bank for having a meeting to set up your Hong Kong business bank account, you need to take the company documents that would prove that your business exists and that it has been properly registered.
- You would also need to take the documents related to your residence, your identity and an evidence of you business activity that includes the last banking history or the business plan.
- A few banks would even ask for these documents to be certified and/or translated if the language is not an international one, like English. You would also be asked to give proof of the final shareholders or the beneficiary owners of the business, even if they would not have any access to the account.
A tip for you to be successful is that you should call up the bank beforehand and book an appointment with them before you give them a visit. With this, you would be told about the documents that are needed for the process of opening a business bank account in Hong Kong, making your complete process much more straightforward.
You don’t want to have any sudden surprises that you’ve missed something, and need to come again some other day with the documents. So, it is better to give them a call to find out the details and requirements as your book an appointment with them.
Documents needed to open an account
Don’t just walk into the bank empty handed or with just your company papers and expect them to help you set up a Hong Kong business bank account! You are obligated to take some specific documents during your visit to the bank which does include the company papers, your personal documents for the due diligence and KYC, along with the other leading member’s records.
All the banks do not have the same requirements regarding documents as proof. Keeping this in mind, and having a better idea about the required documents beforehand, below are some of the standard documents that almost every bank asks for:
- The very first thing is the bank account opening form that has been appropriately completed and signed by authorized signatories, as per your company’s board of resolution.
- A document of the board of resolution approving the opening of the business bank account in Hong Kong.
- A certified copy of the certificate of incorporation of the company that was issued by the Companies Registry.
- A certified copy of the Articles of Association of the company.
- A certified copy of the Business Registration Certificate of the company that is issued by the Inland Revenue Department.
- A list of individual signatures of each authorized signatories along with the proof of the business such as the business plan or the audited financial statements. This business plan should stated which services you intend to offer, or which goods you intend to trade.
- A copy of your passport or the Hong Kong identity card, if you have along with your residential proof such as the driving license, bank statements, utility bills, etc.
- A declaration of the director(s) providing the details of the principal shareholders and the directors. And for those who do not know what a principal shareholder is – a person who has been entitled to control the exercise or exercise about 10% or even more of the voting rights of the company. This is important, as normally a shareholder with above 10% holdings will need to attend the bank account opening meeting.
For the corporate shareholders of the company
A genuine valid copy of the organization chart that depicts the percentage of the shareholdings that is held by each and the ultimate beneficial owners of the company.
Along with this, you would also need to take along the details of the ultimate beneficial owners for the nominee shareholders of a company with document copies as proofs.
For ultimate beneficiaries who are trusts
You would need to provide a genuine valid copy of the declaration of the trust or trust deed with the complete details of the trustees, settlors, and beneficiaries.
The above requirements are not all the requirements that the banks need. You would have to provide with some other things along with the above-mentioned documents.
- Along with the above documents, you would also need to take some amount with you to the bank that would be used as the initial deposit in order to set up a Hong Kong business bank account. The amount can range from HKD $10,000 to even HKD $50,000, depending on the bank requirements.
- If you are opening a business bank account in Hong Kong for an offshore company, you would have to provide the bank with the Certificate of Good Standing and the Certificate of Incumbency along with the regular documents mentioned above.
- Almost all the Hong Kong bank follow the due diligence procedures strictly and require the account shareholders, principal directors, and any other signatories of your company to be physically present in the bank at the time given to setup the Hong Kong business bank account for your business.
Some banks in Hong Kong would not need you to get the directors, shareholders, and signatories to the bank just for opening the business bank account in Hong Kong. But that is not it, you still have to get the documents signed at one of the bank’s overseas branches by the respected person and in front of a witness.
Having all the right and certified documents does make a lot of difference but you should not be completely dependent on it. This is since there are many troubles that are appearing these days for those who want to set up their Hong Kong business bank account, but are getting their application refused by the banks.
Difficulties with opening a Hong Kong bank account
More and more people are getting rejected for opening a business bank account in Hong Kong, which has been very disappointing for many. The refusals are mainly due to the increased stress of regulations on money laundering within Hong Kong as well as FATCA regulations. So, if you are being refused to set up a Hong Kong business bank account, these might be the reasons why:
- Your trading history is NIL.
- You are taken as a high-risk business, which means that you might have sporadic income, a lot of large bills, risky business nature, etc.
- You do not have any business or trading done within Asia. Also, you live and do business steadily in other countries that are very far away from Hong Kong.
Other than this, you can increase your chances to be successful in opening a business bank account in Hong Kong by rectifying little things in your business. The first tip is to target the adverts at Asian customers to gain their attention, and after this, begin making sales within Asia.
Another point is to make alterations to the financial structure of your business. The tip for this is that you can open up a business bank account in the UK or any other country with the HSBC bank, and develop a six to twelve months of trading with them. This would give you a better chances to be successful in opening a Business bank account in Hong Kong.
Apart from these, if you are still encountering a refusal, it might be because the bank is not interested in your business. Hence, it would be a great option to try the other banks in Hong Kong. The banks like the DBS Bank or the Bank of China have recently made it easier to set up a Hong Kong business bank account for those who are opening a business in Hong Kong. Give it a try, as you would be able to find out where you stand at least.
Traveling to Hong Kong
Now that you are aware of all the documents needed and the problems that might occur on the way, if you are ready, you may now consider flying to Hong Kong. Yes, you read that right! It is not possible to avoid visiting the bank for the process of opening a business bank account in Hong Kong, though there are some exceptions.
Opening a business bank account in Hong Kong is relatively straightforward, and you have more options in choosing a bank if your business is registered in Hong Kong even though you are not a resident of Hong Kong.
Getting back to the question where you would not like to travel to Hong Kong for the process to set up Hong Kong business bank account – Well, the obligations are quite simple where every bank follows stringent procedures around account opening. These banks also prefer a physical presence of all the relevant parties during the process, so it is not possible to dodge traveling to Hong Kong for personally visiting the bank and opening a business bank account in Hong Kong.
Hong Kong business bank account Application Process Online
On the other hand, you can also start the process to set up a Hong Kong business bank account online and even get the application through the web. But you would still need to travel and hand over the documents either to Hong Kong or in the city where the bank has a global branch for handing the documents in person.
Advantages of Hong Kong bank accounts
It is evident that if everyone is stressing about the fact that you must try to open a bank account in Hong Kong, then there is something good behind it. Well, it is not just something, there are many significant benefits of owning a business bank account in Hong Kong and they are:
Note: Not all the benefits are obtained in one bank, and not all the banks have the same benefits. But the mentioned benefits below are the standard ones for most of the banks in Hong Kong.
Lower Minimum Bank Account Balance
The minimum bank account balance that is required by the Hong Kong banks can be as low as HKD 10,000 with a monthly service fee of only HKD 100 for the balance below the minimum account balance. This basically depends on the bank’s policies and regulations which you can find out about by either contacting an agency in touch with many banks or by personally calling the bank up to find out.
No Tax on Interest
One most excellent benefit you get after you have set up a Hong Kong business bank account is no tax on interest earned in the bank account.
Convenient access to bank account
With the help of phone banking and internet banking, you can easily access the offshore bank account anywhere in the world and at any time. Along with this, it is more comfortable to view the transaction advice and the account statements through the Internet banking.
RMB Trade Settlement
Effective from July 2009, the Hong Kong banks have been permitted to handle RMB agreement for cross-border trading with mainland China. The RMB Trade settlement would allow you to settle trade with the designated enterprises of RMB in mainland China. The benefit is the reduction in the cost of selling and buying RMB, while it gives an option to you for receiving and keeping the RMB trade receipts offshore.
Free Capital Transfer
With the world’s most dynamic economy, Hong Kong is driven by the policies of free markets and free trade with no foreign exchange controls. Hence, there is no restriction on the international capital transfer, including transferring dividend or profit to your homeland. Isn’t this just great?
Sound Banking System
Due to the presence of many significant International banks in Hong Kong like the Bank of China, Citibank, Standard Chartered Bank, and HSBC, the banking industry is significant in Hong Kong. Also, Hong Kong is reputed for having high-quality regulations of the banking industry.
The identity of the account holder and their transaction information is also subjected to a very high standard of confidentiality. So, you can be sure that your data is in the right hands after opening a business bank account in Hong Kong.
Disadvantages of Hong Kong bank accounts
There is good news for you when it comes to the disadvantages of opting to set up a Hong Kong business bank account. It is that there are just two little disadvantages and can be ignored when you see the advantages. They are:
- The first is that the business bank account in Hong Kong cannot be opened online.
- The other major disadvantage is that the approval rates are low and less certain.
But if you follow the tips shared under the section “Difficulties with opening a Hong Kong bank account,” your chances increase and many have also been successful in this.
List of Hong Kong banks
Hong Kong has a sophisticated financial industry and an extensive variety of international and local banks. And all these banks offer slightly different services, but you are likely to obtain something that would be suitable for your needs amid the bigger institutions. Even though there are many banks in Hong Kong, the listed bank below are the best choices if you are searching to open a business bank account in Hong Kong easily:
HSBC is a global banking superpower and is also one of the largest banks in Hong Kong. In this bank, you can use any of the two corporate current accounts – the BusinessVantage Plus or the BusinessVantage.
If you want to open an account in this bank, you would need to visit the HSBC business banking center just once. And once it has been approved, you would be able to operate it flawlessly with the payments cards, PINs, HSBC Token, and everything required just within a few of days.
Hang Seng Bank
The Hang Seng Bank is the second largest bank in Hong Kong, and the HSBC group partly owns it as well. In this bank, two different business accounts exist so as to suit the different kinds of businesses. Also, they offer a lot of discounts to anyone who uses the internet banking services primarily.
So, if you are a person who wants good discounts, this bank is the right one for you to set up Hong Kong business bank account in. Moreover, the Hang Seng also offers companies many other financial services like the investment tools and the loans.
Bank of China (Hong Kong)
From the name, it is understood that this bank is a Chinese bank, but it has a local arm in Hong Kong as well that is doing great. You have access to a vast range of banking services for businesses that are suitable for any company or industry at any stage.
Even though the detail and the document requirement to open a business bank account in Hong Kong with this bank is complex, the particular information that is required for each kind of account is given out clearly on the website of the bank. You can find it in both English and Chinese. Other than this, you can take the help of the guidance of the agencies that are familiar with this bank.
Standard Chartered Bank
Being an international bank and a quite famous one, the Standard Chartered Bank has its headquarters in Hong Kong. Also, the customers can easily and comfortably access the large branch and ATM networks across the region and the country.
Along with this, there are two dedicated business banking centers of this bank in Hong Kong that can assist you to set up a Hong Kong business bank account.
OCBC Wing Hang
This is a Singaporean bank, but has a branch in Hong Kong as well. The reason this bank is this list is since it is associated with the OCBC bank of Singapore and is a well known bank there. Since the bank is a Singaporean bank, you can easily create a bank account and get enough of benefits with it.
Moreover, it is much easier to open a business bank account in Hong Kong in this bank where the initial deposit is HKD 50,000 (minimum monthly deposit HKD 100,000) along with a maintenance fee of HKD 500 per month. Despite the high initial deposit, the approval rates are high for in this bank for the business bank account and the bank account opening process just takes 15 to 20 working days to get completed.
In this bank, you can apply for the opening of a business bank account in Hong Kong online. After you have checked if you are eligible, you can then schedule an appointment to have a bank meeting from which you would get a response about the interview in two days.
This meeting can be undergone online via Skype where you would not have to visit the bank at all. And if the application is accepted, you would be couriered the related documents.
But keep in mind, that the request for the “Meet Online” eligibility depends on the criteria check or invitation by the relationship manager of the Bank, based on suitability.
These details are just as snippet of each bank, and you can find out more by either contacting the bank or visiting them.
Conclusion and offshore banks
Before we can conclude, there is something else that has to be told here. Other than the business bank account in Hong Kong for your company in Hong Kong, you can also open an international bank account in another country. This means that the bank account would be in a country where the company has not been incorporated.
International Business Bank Accounts
Now, the country in which you choose the bank can be the one in which you are currently residing in, or it can be from the list of banks that are usually used for the Hong Kong business. Both ways, it is recommended strongly to open a business bank account in an international bank since it gives you and your business many advantages and benefits. And one perk about this is that you would never have to come to Hong Kong at all.
With an international bank account, you would be able to operate via multiple currencies without exhausting funds through currency conversion fees. Other than this, you can easily obtain the debit and credit card links to several currencies, enjoy special investment opportunities and discounted international payments, as well as set up automatic bill payments in different currencies.
With the online banking service, you would be able to have round-the-clock and constant access to your account and finances from any part of the world. Moreover, with a bank account outside Hong Kong, you would benefit from the international diversification strategy in your business. Eventually, this would shield you from the capital controls, and any political and economic risks. Also, they are much safer as having a more conservative management system.
So, if you have tried all to set up a Hong Kong business bank account and still need a bank account for your business, open an international business bank account.
Now that you know the good and the bad along with the needs and the process to open a business bank account in Hong Kong, you can move ahead with it. And if you have been refused for the business bank account in Hong Kong, you can open an international account.
Other than this, you can open a personal bank account in Hong Kong and still take advantage of the HK incorporation and taxes. But this is best for the app developers or affiliates, who normally get bank deposits of their earnings. And yes, it is not the best idea and it is not for everyone as mentioned, but it can help some people out.
Choose and decide as per your needs and requirements, and if one option doesn’t work, you can move to the next one always!