Why my Hong Kong bank account opening application being rejected?

Updated: Mar 30


Rejection of Hong Kong bank account opening

Since year 2016, we heard a lot of complaints from clients experienced a hard time in opening a basic corporate bank account in Hong Kong; some of them even being rejected, wasting time and money.

YES, compare to 2013 or before, this is a million times harder to open a basic bank account in Hong Kong nowadays. Simply take a look of the current corporate bank account opening application form of Hong Kong HSBC (with 38 pages long form):

http://www.business.hsbc.com.hk/en-gb/form-download-centre/account-services-forms

Click the icon "Business Integrated Account Opening Form (PDF, 1.81MB)"

Hard is NOT impossible, and we simplify it for you!!

Yet, facilities provide by Hong Kong banks, such as online e-banking, multi-currency account, good reputation, etc. still make it attractive to tolerant the pain.

This article is to provide you some tips and tricks to ease the pain on opening a basic corporate bank account in Hong Kong. The better you understand, the more confident you can handle the case.

Regarding corporate bank account application in Hong Kong, two (2) IMPORTANT facts that you MUST bear in mind: the 5 rules to prepare a bank account opening application

This is how you can help the banker to fulfill his due diligence duty of a corporate bank account application in Hong Kong

Rule #1:- Keep Company Structure Simple

  • Purpose:- Identify ultimate beneficiary owner for any tax disclosure required

  • Due Diligence Requirement:- FATCA (Foreign Account Tax Compliance Act), AEOI (Automatic Exchange of Information)

  • Prepare Organization Chart certified by Director;

  • Prefer no more than 3 layers structure;

  • Best to have Natural Person as direct shareholder and ultimate beneficiary owner;

  • Avoid Tax Haven Company as Shareholders (BVI, Seychelles, Samoa), etc.

Rule #2:- Give Banker a Legitimate Business Reason

  • Purpose:- Ensure the business is real and legal to operate in Hong Kong and need not specific license, also no hidden agenda

  • Due Diligence Requirement:- KYC (Know Your Customer)

  • Prefer showing business linkage with Hong Kong and/or China (100% or partially), therefore requires Hong Kong bank account for operation;

  • Specific an easy to understand business nature, below with two examples:-

  • Trading:- Source Solar Panels from China suppliers or Factories and Sell to Australia customers;

  • Service:- Translation service of Spanish or English to Chinese for corporate and/or retail customers in Asia Regions (Hong Kong, China, Singapore, Japan and Korea)

Rule #3:- Provide Materials and Supporting as Business Proof

  • Purpose:- Compliance standard to match with banking regulation of Hong Kong government. Mainly under Cap 155 Banking Ordinance governed by HKMA (Hong Kong Monetary Authority)

  • Due Diligence Requirement:- Obtain supporting to match the KYC standard

  • Anything document or material that can help the banker to understand better about your business, most common type of proof will be contracts and agreement, if this is a start-up, you can show website together with product catalogs, product price, etc.;

  • If you have proof of physical establishment and hiring in Hong Kong, that will even better

Rule #4:- Clean Money Source and Transactions

  • Purpose:- Ensure the account will not be used for money laundering or illegal purpose

  • Due Diligence Requirement:- AML (Anti-Money Laundering)

  • Avoid high value commodities (Gold, Silver, Platinum, Diamond, Luxury Watches, Paint Collections, etc.) trading;

  • Avoid high volume or frequency transactions type of services (Currencies exchange, Remittance service for others) without physical establishment / hiring in Hong Kong;

  • Provide recent Three (3) months bank statements with active transactions of existing business or that of the shareholder;

  • Provide suppliers and customers information, such as business name card, email correspondence, quotation or invoice

Rule #5:- NO Business connection with Risky or Sanctioned Countries

  • Purpose:- Avoid penalties from violate any prohibited transactions with sanctioned countries

  • Due Diligence Requirement:- CTF (Counter Terrorist Financing)

  • Make sure no business connection with any sanctioned country or high risk country, such as Iran, Sudan, North Korea, Syria, Cuba, South Sudan, Belarus, Zimbabwe, Russia and countries has potential connection with ISIS… etc.

Stick with these 5 rules in preparing your bank account opening documents, the bank account should be able to open without pain.

If you experience any problem in Hong Kong bank account opening process, please feel free to drop us a message here or to our email:- catcherbiz@outlook.com; also, please share with us your firsthand experience and see how we could be your assistance.

Tag# Bank Account Opening in Hong Kong

#BankAC

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