Written by Luz Deneb Martinez, LAS team, CW CPA 

 

You may have experienced this in person: trying to open a corporate bank account in Hong Kong but receiving endless requests and questions from the bank. Over the past years, the account opening process has undergone major changes, with the purpose of enforcing laws on combating illegal activities such as money laundering, terrorist financing and tax evasion. If you have tried and not succeeded, you will find these 7 tips valuable when preparing to open a bank account for your business in Hong Kong:

1. Prepare your business plan

It is important to have a very strong business plan that shows certainty and clarity to the bank. A lot of enthusiastic entrepreneurs have a great goal for their business ventures, but their explanation often lacks substance and supporting information when presented to the bank. A well-presented business plan must include status of the project and the projection in the short and long term.

2. Define your company structure

In Hong Kong it is permitted to register a Limited Liability Company with only one director (a natural person) and one shareholder (either a natural person or a corporate). While the shareholder(s) is(are) the owner(s) of the Hong Kong Company, the director(s) shall carry responsibilities and liabilities pursuant to the constitution of the company and relevant laws. If a person in the position of a Director does not comply with his duties, he will be liable to civil or criminal proceedings. Therefore, it is crucial to select an experienced Director that is competent and “hands-on” in the operation of the Company.

3. Do a feasibility evaluation

An important point for startups is that most banks will ONLY accept to review a case when the company is already incorporated in Hong Kong. For most of the entrepreneurs, this might entail taking a risk of having the company incorporated but failing to open the bank account. It is advisable not to rush setting up the company before consulting with a professional whom may help to do a feasibility evaluation.

4. Cooperate to disclose the required information

Besides presenting your business plan with supporting documents of business transactions overseas, you will also be required to provide identity and residential information of the director(s), shareholder(s) and the ultimate beneficial owner(s).

5. Be prepared for the bank interview

Banks generally adopt a “risk-based approach” when handling account opening. Each due diligence process is based on the background of the customer, nationality, industry, etc. When applying, do not compare your case with the other cases you have heard of. Be prepared for answering the bank officer’s questions related to the specifics of YOUR business with clarity and certainty.

6. Choose your bank wisely

Usually banks offer different ranges of services depending on the segment or the profile of customers. Some banks look for more well-established companies overseas; some may hope to bundle the other bank products with the account opening services. Choose a bank that will offer the services you are satisfied with.

7. Plan your trip to Hong Kong in advance

Most banks in Hong Kong will ask to have an interview with the Director(s) in person. If you plan to visit Hong Kong for fairs, supplier and customer meetings. This might be the perfect time to arrange the company incorporation and the bank interview. Plan in advance and use your visit wisely.

 

If you intend to apply for a corporate bank account and wish to increase the chances of a successful application, CW has the expertise and years of experience in providing a one-stop solution to assist you on opening a bank account for your business in Hong Kong. For more information, please contact Ms. May Ly (may.ly@cwhkcpa.com).

Suggested reading:


[i] https://www.hkma.gov.hk/eng/other-information/ac-opening/ma-role.shtml

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