The banking system in Hong Kong is attractive by its stability and vast possibilities that it gives to businesses. However, opening a bank account in Hong Kong is a challenging task for a foreigner indeed and we will say from the outset that you are going to need professional assistance if you want to set up a bank account in the jurisdiction.
Reasons for opening a bank account in Hong Kong
Hong Kong is one of the global financial centers. Thousands of foreign companies bank in Hong Kong. They are attracted by a highly reliable banking system and beneficial service conditions. If other people from foreign countries can set up bank accounts in Hong Kong, then you can do so too.
Around 40% of all Chinese financial transactions go through Hong Kong. This is a colossal volume of transactions but this should not be surprising, as the business climate in Hong Kong is highly beneficial for international financial operations. The financial sector in Hong Kong offers all the most up-to-date banking instruments that you can possibly think of. Thus, the first reason to open a bank account in Hong Kong is a wide range of banking services available there.
When opening a bank account in Hong Kong, you will gain access to handy instruments for remote account management.
Today, over a hundred banks can be found in Hong Kong. Only 20% of them are local banks while all the others are divisions of foreign banks. The second reason for banking in Hong Kong is a wide choice of financial institutions that you can find there. You will certainly be able to choose the bank that suits your purposes very well.
In addition to the advantages specified above, Hong Kong offers several other benefits. These include the following ones:
- Lack of currency control;
- A stable banking system;
- Confidentiality of account holders’ information.
One more advantage that Hong Kong boasts is the language spoken there. You don’t have to have the application documents translated into Chinese when applying for banking services in Hong Kong: a vast majority of bank managers speak English. Even though Hong Kong has ceased to be a British colony, English remains an official language in the jurisdiction.
Hong Kong offers some really important benefits to foreign entrepreneurs but opening a bank account there is not an easy task. The bank administrations put forward strict requirements to prospective clients. They are not indifferent to the jurisdiction where the company is registered and they are also very curious about the types of business that the company is engaged in. Sometimes, applications for banking services are declined at an early stage in Hong Kong. The chances of service denial are going to increase if you ignore the opportunity to seek professional support.
How to open a bank account in Hong Kong
You have to solve the following three fundamental tasks to set up a bank account in Hong Kong:
- Choose the right bank;
- Find out about the specifics of account opening in the bank;
- Prepare the application documents and apply for services.
Below we provide several FAQs about opening bank accounts in Hong Kong. The answers to the questions will help you solve the tasks specified above.
Can a corporate bank account in Hong Kong be opened remotely?
Unfortunately, this opportunity is not available any longer. Even if you want to open a personal bank account in Hong Kong, you will have to pay a visit to the jurisdiction in all likelihood. If a certain website claims that remote bank account opening is possible in Hong Kong, the information is outdated.
For this reason, you have to be prepared to take a 1- or 2-day trip to Hong Kong to set up a bank account there. It does not matter if you are going to open a bank account by yourself or with somebody’s assistance: you’ll have to go to Hong Kong in both cases. You will have to have an interview with a bank manager in any event.
The banks want to know who their clients are. The fact that you have to go through the identification procedures may be annoying but you should look at it at a different angle. The bank identifies all its clients, which turns it into a highly reliable financial institution.
Can banking services be denied in Hong Kong?
They can and they often are. The South China Morning Post has discussed the situation in a few issues.
The matter is that the banks in Hong Kong feel exceptionally well. Money comes from mainland China in huge quantities, which makes Hong Kong banks reluctant to service small clients from foreign countries especially if they conduct no business operations in Asia.
Nevertheless, opening a bank account in Hong Kong is possible. To avoid service denial, you have to choose the bank carefully and neatly fill out all the required application documents. If the bank administration invites you for an interview, you can be 99% sure that they will open an account for you.
It is impossible, however, to open a bank account in Hong Kong for an offshore company and you should be aware of that. The administration of Hong Kong as well as the banks located there want to maintain a spotless reputation of the jurisdiction. They do their best to avoid being put on any black or gray lists. Therefore, they do not cooperate with blacklisted countries.
What application documents are required to open a bank account in Hong Kong?
The standard application document package includes the following documents:
- A completed application form;
- A ‘Know Your Client’ form that carries information about you and your company;
- Your company’s statutory documents;
- Information about company directors and shareholders;
- Personal documents for key personnel, large shareholders, and account signers;
- Bank statements for key personnel, large shareholders, and account signers.
Please note that the bank administration will normally want to have the information about all major shareholders who own 10% of company shares or more. There can be exceptions from this rule, however.
Some additional documents may often be required when you apply for banking services in Hong Kong. You may have to submit the following papers:
- A detailed business plan;
- Active contracts (or prospective contracts for newly established companies);
- Reference letters.
Opening a bank account in Hong Kong is an attractive business opportunity for any foreign company especially if it has business operations in Asia. The task is rather challenging but it can be solved anyway. Applying for professional assistance in the matter would be a very good idea.