Hong Kong corporate bank accounts in 2020
Since 2003, Healy Consultants Group PLC helps multi-national Clients open multi-currency corporate bank accounts in Hong Kong for both local and overseas companies.
Without bank signatory travel, our Asian team will project manage the multi-currency corporate bank account opening process, including preparing a quality business plan for our Client’s business.
We recommend our multi-national Clients read this web page to avoid bank surprises later!
Hong Kong banking problems and solutions
No Hong Kong banking problem Solution 1.
Hong Kong banks are extremely choosy about the customers they onboard. Top tier banks increasingly focus on large, profitable low risk corporate Clients. Generally, Hong Kong banks are not too interested in small companies.
For all banks, and without exception, the Hong Kong Monetary Authority (HKMA) demands each bank convene a face to face meeting with the bank signatory. Consequently, all banks demand a meeting with each shareholder and director and bank signatory of the entity.
Since 2003, Healy Consultants Group PLC has built quality banking relationships with Hong Kong banks. Local banks trust and welcome our multi-national Clients. A quality business plan is a big help.
Our staff will meet our Client in Hong Kong and accompany our Client to the bank interviews (see this page for more information).
Healy Consultants Group PLC has a guaranteed corporate bank account approval policy.
Global banks continue to tighten corporate bank account opening procedures, their internal compliance departments completing more thorough due diligence of Clients. Consequently, our Clients should expect bank account approval to take up to six weeks. Furthermore, banks now require evidence of proof of business in the country where the company bank account will be, including sales contracts or lease agreement.
If our Client requires a bank account at short notice, we recommend an immediate Hong Kong solution (Hong Kong company plus already-approved international corporate bank account).
Because Hong Kong banks are in so much demand, bank charges are high. For example:
- The minimum bank balance to maintain ranges from US$2,000 to US$50,000.
- Average bank charges for outgoing funds transfers are US$15.
- Some banks have high annual account charges. For example, ICICI charges US$3,000 annually.
Despite recent political instability, Hong Kong is a well-rated financial services centre, boasting no national debt and healthy, liquid banks. Consequently, we recommend our multi-national Clients accept the high minimum balance requirements and pay these bank charges. During the global depression, it is important to house funds in dependable, safe banks.
Some Clients may wish to open an account with one of the new digital banks now on the market. These banks typically have lower minimum balance requirements, and lower fees and charges.
If Hong Kong banks perceive any unusual bank account activity, they will close the corporate bank account with one month’s notice to the beneficial owners. No questions asked, no chance to defend yourself.
During your visit to Hong Kong, we recommend our multi-national Clients open multiple back-up multi-currency corporate bank accounts with different banks.
Hong Kong banks consider tax haven entities to be high risk customers, and do not welcome corporate bank account applications from these potential Clients.
The majority of Hong Kong banks only provide telephone support during Hong Kong business hours. This is inconvenient for multi-national Clients in Europe or the USA.
Healy Consultants Group PLC staff assist our multi-national Clients with bank communication, regardless of time zones.
Some multinational Clients who have bank accounts in Hong Kong are concerned about Beijing’s growing influence over the city. In particular, they worry about losing their deposits.
Some depositors also fear an end to the Hong Kong dollar’s peg to the US dollar, which would erode their savings.
To mitigate financial loss, Healy Consultants Group PLC recommends our multi-national Clients:
- Bank with Hong Kong top-tier banks only; and
- Be familiar with the government deposit insurance guarantee;
- Spread funds between multiple Hong Kong and international banks, to hedge liquidity risk;
- Bank with Hong Kong banks with healthy balance sheets.
The Hong Kong banking sector
Healy Consultants Group PLC’s summary view
- Hong Kong remains a global financial centre, with a well-regulated, secure banking system. However, political tensions in the city threaten to erode the confidence of international investors and weaken its global hub status.
- Despite fears of capital flight, flows into Hong Kong are increasing in 2020, particularly from mainland China. Hong Kong share prices have also rebounded from March 2020 lows. In future we expect Hong Kong’s financial system to be dominated by Chinese, not global, investment.
- In April 2020, foreign currency deposits in Hong Kong hit six-month highs to HK$13.89 trillion (US$1.7 trillion). Hong Kong dollar deposits rose 0.5%, while foreign currency deposits increased by 1.1%. In March 2020, Hong Kong’s foreign currency stockpile stood at US$475.6 billion, the world’s seventh largest.
- Because of strong inward capital flows, demand for Hong Kong corporate bank accounts increases. In practical terms, this means local banks are more selective with which Clients they onboard, preferring companies that can prove high annual turnover.
- Fitch downgraded Hong Kong’s sovereign credit cedit rating in April 2020 to AA- with a stable outlook. In January 2020, Moody’s Investor Service downgraded Hong Kong’s sovereign rating to Aa3. Both downgrades reflect political turmoil in the city in 2019 and 2020.
- The Hong Kong dollar is pegged to the US dollar. The Hong Kong Monetary Authority has a reputation for maintaining stability of the Hong Kong dollar, and in the first eight months of 2020 alone it intervened 40 times to keep the currency peg in place.
- Bank deposits in Hong Kong are protected by law, up to an equivalent value of HK$500,000 per depositor, including both principal and interest. This applies to deposits in any currency. Although Hong Kong banks rarely fail, the protection scheme provides another layer of comfort for multinational investors.
- Because banks are looking to cut costs, we expect many branches of traditional ‘high street’ banks to close across Hong Kong, and for most services to be transferred online.
- Digital banks are licensed to operate in Hong Kong since March 2019. These ‘virtual banks’ are an excellent alternative to conventional banks, with a similar range of services accessed via an app and lower account service fees.
- Despite the resilience of Hong Kong’s banking industry to political turbulence, thousands of bank workers are expected to lose their jobs in 2020 due to coronavirus. In August 2020, the city’s unemployment rate was 6.1%.
- The Hong Kong economy suffered its sharpest quarter-on-quarter contraction of 9.1% in the first quarter of 2020. Though schemes are in place to support small businesses, more local entities are going bankrupt, and loan defaults will cause some local banks to seek government assistance.
- Overall, Healy Consultants Group PLC continues to recommend our multi-national Clients use Hong Kong as a preferred banking location. However, Singapore and/or Malaysia are viable alternatives.
- The Hong Kong Monetary Authority regulates and supervises over 164 deposit-taking institutions in Hong Kong, including full banks, wholesale banks, merchant banks and finance companies. Some 29 multinational banks have regional headquarters in the city.
- Healy Consultants Group PLC’s preferred international banking options in Hong Kong are i) HSBC‘s (offshore business bank account) ii) DBS iii) Citibank iv) BNP Paribas v) Deutsche Bank and vi) United Overseas Bank. (see sample of six banking options in this PDF). These banks offer the best internet banking and customer care. Relationships with these banks also simplify the process of opening new accounts as your business grows worldwide.
- We also recommend the following local banks in Hong Kong: i) Bank of East Asia ii) Dah Sing Bank and iii) Hang Seng Bank.
- As well as Hong Kong dollar accounts, local banks offer multi-currency corporate bank accounts in including Yen, RMB, US$, euros, sterling, and other Asian currencies;
- Hong Kong banks offer savings, deposits and checking accounts, online banking, currency exchange, foreign currency banking, wire transfers, ATM services, wealth management, loans, LCs, treasury, hedging and advisory services.
- Most Hong Kong banks do not charge an account opening fee. However, the account must be funded immediately after opening and our Client should ensure the account remains active to avoid closure. The minimum balance required varies between US$2,000 and US$50,000 and should be monthly maintained. A monthly service fee of between US$10 and US$20 will be charged for balances below the required minimum.
- Some Hong Kong banks welcome multi-currency corporate bank account opening for overseas companies. Tax haven entities are considered High risk Customers;
- For both onshore and offshore companies, HKMA requires each signatory, shareholder and director to have a one hour face-to-face interview with a bank officer as part of bank AML/CFT obligations. Unfortunately, even if our Client travels to Hong Kong to meet the bank, there is no guarantee that the bank account will be opened.
- On average, Hong Kong banks take two to three months to issue corporate bank account numbers and e-banking access;
- Even the smallest transactions can be completed in Hong Kong by local and international debit and credit cards, as well as methods such as WeChat Pay, Apple Pay and Alipay. Paying various utility bills is much easier via online banking.
- Most Hong Kong bank branch staff speak English, and correspondence and online banking etc is available in both English and Chinese.
- Local retail banks offer better currency exchange rates than money changers. If you open a foreign currency account along with a Hong Kong dollar account, transfers can easily be made between the two.
- In 2020, Hong Kong banks pay up to 0.8% interest on Hong Kong dollar fixed deposits.
- Hong Kong banks are subject to a stringent AML/CFT regime to avoid and identify money laundering and terrorist financing.
- Hong Kong is a signatory to the Common Reporting Standard (CRS), a global initiative to clamp down on tax evasion. As a result, Hong Kong-based banks share information on accounts and account holders with tax authorities where the company/individual is tax-resident.
- Similarly, under the Foreign Account Tax Compliance Act (FATCA), since 2014 Hong Kong banks report information on US account holders to the US Inland Revenue Service (IRS).
- There are no foreign exchange controls in Hong Kong. There is a free flow of funds for remittances of profits, dividends, debt service, capital, capital gains, branch profits, royalties, and returns on intellectual property or imports. Shares in exchange traded funds through a brokerage account are exempt from stamp duty.
- It is important that our Clients are aware of their corporate and legal obligations in Hong Kong and that they timely fulfil the same. Let us know if you require Healy Consultants Group PLC’s assistance to timely and efficiently complete your legal and corporate responsibilities.
Healy Consultants Group PLC fees to help open a corporate bank account in Hong Kong
Healy Consultants Group PLC guarantees Hong Kong company bank accounts approval. Our fees for different banking services include:
Hong Kong banking task Our Client travels US$ Hong Kong bank account for a foreign company Yes 5,950* Hong Kong bank account for an offshore company Yes 5,950* Hong Kong bank account for a Hong Kong company Yes 5,950* Hong Kong personal bank account Yes 5,950 Hong Kong private banking assistance No 5,950
*If our Client also wants us to register the entity, our fee is US$4,950 for multi-currency corporate bank account opening.
- Our multi-currency corporate bank account opening fees cover the following support services:
- Creating a quality business plan for the Hong Kong banks, explaining the purpose of the business and future banking transactions.
- Securing welcome emails from multiple Hong Kong banks, inviting our Client to submit a multi-currency corporate bank account application.
- Healy Consultants Group PLC’s Banking Team completing, on our Client’s behalf, the multi-currency corporate bank account application forms and collating Know Your Customer (KYC) due diligence documents.
- Healy Consultants Group PLC’s staff meeting our Client in Hong Kong and accompanying our Client to face-to-face meetings with multiple local banks to open multi-currency corporate bank accounts.
- Following successful completion of the above, the bank officer submitting a complete potential customer file to the bank Legal and Compliance Department. (Note that the bank In-house Legal and Compliance Department may revert multiple times for additional documentation and information from i) each bank signatory / director / UBOs of the companies as well as ii) our Client’s business and transactions).
- If a bank declines to board our Client’s business, Healy Consultants Group PLC immediately informing our Client and actioning back-up banking solutions.
- In an average of three months following application submission, Healy Consultants Group PLC securing multiple multi-currency corporate bank account numbers for our Client’s Hong Kong company.
- Thereafter, Healy Consultants Group PLC, or the banks, couriering mails and e-banking tokens to the bank signatory, who is expected to activate the internet bank account, with Healy Consultants Group PLC’s assistance if needed.
- After corporate bank account numbers are secured and, if required, Healy Consultants Group PLC assisting our Client to appoint more new shareholders and directors. However, the banks will usually only approve them as bank signatory after a face-to-face meeting and the review and approval of a bank signatory application.
- Our multi-currency corporate bank account opening fees cover the following support services:
Considerations when opening a bank account in Hong Kong
- Hong Kong banks have tightened their account opening procedures, especially for foreign companies. The same applies for merchant accounts for companies that do not have any local Hong Kong customers.
- Hong Kong banks now require Hong Kong companies to have more local substance before they will approve a multi-currency corporate bank account. Examples of local substance include i) business relationships with Hong Kong customers ii) a physical office in Hong Kong and iii) employees in Hong Kong.
- It has also become challenging to open bank accounts for start-ups and, small or medium-sized businesses. Because Hong Kong banks are not hungry for business, they show more interest in those companies that can prove high annual turnover.
- Foreign companies are also required to submit i) a business plan with details of the company’s products and services ii) examples of contracts and invoices generated by and for the newly-incorporated company iii) recent proof of address of the bank signatories (in English) iv) notarised copies of passport and address proof of all bank signatories and v) a bank reference letter for the bank signatories.
- The bank account opening application can be advanced only after the bank signatory visits the bank branch in person.
- Some Hong Kong banks like HSBC prefer to communicate directly with our Client and will not put Healy Consultants Group PLC in the loop for security purposes. In this case, Healy Consultants Group PLC will assist our Client to prepare quality answers to the bankers’ questions and requests.
Documents required for Hong Kong corporate bank account opening
- Hong Kong companies wishing to open a corporate bank account are typically required to submit: i) completed corporate bank account opening forms ii) notarised proof of residential address and identity documents of UBO, shareholders, directors and bank signatories in English iii) certified corporate documents (certificate of incorporation, recent certificate of incumbency (or country equivalent), M&AA) iv) notarised business address proofs in English (certified true copy of company’s business profile from the Hong Kong Companies Registry, or country equivalent) v) a copy of the UBO’s personal bank statement for the previous three months; and vi) latest audited financial statements (if any) and vii) Board of Directors’ approval for the account opening and appointed bank signatories.
Alternative option - opening a corporate bank account in Singapore and/or Malaysia
Opening a corporate bank account in Singapore/Malaysia for a Hong Kong company requires the following:
- A physical meeting between the relationship manager and all bank signatories.
- Compulsory supporting documents even if the business is a start-up including i) contracts or letters of engagement with prospective clients or email correspondence evidence ii) contracts with suppliers iii) director’s resume to prove experience in the business and iv) reference letter from a potential client or lawyer (supported with email correspondence).
- Engaging a professional service provider will increase the bank account approval success rate. Our fee for this service is US$4,950.
- During our Client’s travel to Singapore or Malaysia to meet the bank officer, we will also implement this travel policy.
Hong Kong multi-currency corporate bank account opening is easy if you know how. Contact Healy Consultants Group PLC if your Firm needs assistance navigating through the different banking solutions.