Hong Kong is a special administrative region of China, considered one of the leading financial centers both in Asia and in the world. In 2011 Hong Kong was awarded the status of the best financial market in the world. The number of international financial organizations operating in the region also testifies to the development of the banking sector. Hong Kong is the world’s leader in the number of public institutions per capita and the area of the city. In addition, more than 70 of the 100 largest banks in the world carry out their operations in Hong Kong. However, recently it has become increasingly difficult for non-residents to open an account in Hong Kong.
Pros and cons of opening an account in Hong Kong
There are many reasons why you should open an account in Hong Kong, the main ones are:
- The development of the banking system, which is the basis of financial activity in the region. In this regard, it is actively supported by the authorities, which makes it extremely stable and reliable.
- Wide range of financial institutions offering different rates and service conditions.
- Lack of currency control and restrictions on deposit and withdrawal of funds.
- High level of service for a relatively small fee.
Despite these advantages, there is at least one extremely significant disadvantage – the difficulty of opening an account. This is due to the domestic policy of protectionism of the national business. For this reason, banks work mainly with local companies, in rare cases they are also willing to cooperate with organizations from China or other regions of Asia. In this regard, opening a corporate account for non-residents is almost impossible.
How to increase the chance of opening an account
The following factors influence the likelihood of receiving a positive response when registering a corporate bank account:
- The existence of an open personal account of an individual with a deposit made. The larger the amount, the better, it is desirable to contribute at least 50 thousand dollars.
- Availability of financial products purchased from the legal entity’s account. When buying insurance, bonds and other products for a large amount of money (from 200 thousand dollars), the manager is likely to offer to open a current account at the same time.
- The presence of partners in Hong Kong or China. This factor is the most important because, as noted earlier, the banking system in the region is aimed at cooperation with local entrepreneurs. For confirmation any documents directly or indirectly evidencing the partnership will do: letters, invitations, contracts, invoices and others.
Excessive selectivity of the banks affects mainly clients who want to open a corporate account in Hong Kong. It is much easier for individuals to get approval to open a personal account.
The main requirement for opening a personal account is exclusively the savings purpose of its use – accumulation of funds, investment. In this regard, the minimum balance on it must be large. Carrying out entrepreneurial activities through such an account is impossible, because such violations will be followed by various restrictions and blockages. However, no one prohibits the use of funds from it for the payment of services, purchase of real estate.
List of documents for opening an account in Hong Kong
In general, the approximate list of documents required is not significantly different from the package for other countries:
- Application according to the sample offered by the bank.
- Minimal documents for the applicant: passport, CV, income information.
- Power of attorney if the representative participates in the procedure.
- Statements from other banks about opened accounts and available funds. It is desirable that the bank was Asian, even better if there is a personal account in Hong Kong.
- Statutory documents of the legal entity, certificate of registration.
- Information about partners operating in the region.
- Information about the organization’s financial activities, its credit history.
- The purpose of opening a corporate account in Hong Kong.
Due to the particular complexity of opening a corporate account, the list of documents may vary significantly in each specific situation.
The registration procedure
Generally speaking, the entire processing procedure can be divided into four main steps:
- The interview. The first stage is of an introductory character, during which the bank representative gets acquainted with the main documents and checks if there are any grounds for refusal. As a rule, this stage is not decisive for further opening of the current account.
- Interview. If there are no formal grounds for refusal the employee will ask for various corporate documents, which will reflect the information about the legal entity, the economic activity performed, the main directions of the work.
- Providing additional documents and clarifying information. A request for additional documents may be received if the bank is ready to open an account, but it needs to verify and check on the client beforehand. This stage can last for several months and usually takes the form of sending inquiries to the client and receiving letters with the necessary information from him.
- The direct opening of the account. If all of the previous steps are successful, registration of the corporate account will occur.
The probability of rejection is quite high at each stage. The risks can be minimized by thorough preliminary preparation and prompt interaction with the bank during the procedure. Lawrange can help with opening an account in Hong Kong.
Another option for obtaining a corporate account is to buy a ready-made company with registered and opened accounts. However this method involves higher risks and requires more detailed study.
The cost of the service of opening an account in Hong Kong
Due to the particular complexity of opening an account in Hong Kong it is not possible to provide the exact cost of the service.
The total price is formed on a case by case basis and depends on the level of the client’s initial preparation as well as individual factors.
Despite the high level of financial development in Hong Kong, especially in the banking sector, it is quite difficult to open a corporate account in the region. Because of the authorities’ policy, banks are focused on working with local entrepreneurs and are reluctant to cooperate with non-residents. However, there is a chance to open a commercial account and Lawrange is here to help.
How do I open a Hong Kong account online?
It is not possible to open an account online in Hong Kong. Banks rules require an obligatory visit to the office for the director, the account signatory and often the beneficiary.
What is the most reliable bank in Hong Kong?
There are a huge number of both local and international banks opened in Hong Kong. Many of the largest organizations conduct all their operations in this region. Therefore, it is not easy to determine the most reliable bank, but if you choose among the local financial institutions, you should pay attention to HSBC. This bank is one of the most important in the region and is one of the three commercial institutions with the right to issue the Hong Kong dollar.
What are the terms of opening an account in Hong Kong?
Due to the increased complexity of the procedure, it is unlikely to open an account in Hong Kong quickly. Depending on the features of a particular situation, the process may take from several months to 1 year.