With the many recent banking scandals and tightened financial regulations put in place by international organisations such as the OECD, Hong Kong has implemented its own set of new measures in order to comply with global standards. Especially when it comes to Anti-Money Laundering (AML) legislation, the Hong Kong government has put stricter rules in place to reinforce its reputation as an international financial centre. These changes are particularly visible in corporate bank account opening procedures, which in the past were relatively hassle-free. Now, banks aim to protect themselves from potentially hefty fines by making it much more difficult to open an account. Indeed, while in previous years it was assumed that an opening application would go through, now this cannot be taken for granted any longer. Banks will conduct strict Due Diligence and Know-Your-Client investigations in order to comply with AML requirements.
In 2012, HSBC and Standard Chartered Bank were fined substantial financial penalties for violations of United States laws regarding AML practices and suspicious activity reporting. As a result, the Hong Kong government imposed tightened regulatory supervision when it comes to money laundering and compliance policies. The aim is to accomplish a good rating with the Financial Action Task Force, an international body established to police money laundering on a global level, by 2016. Nowadays, for corporate bank account openings, most major banks require much more documentation and information on the companyâ€™s background. HSBC, for example, has been very strict on the process, requiring clients to prove their business operations by providing invoices or contracts as supporting documents. For Standard Chartered Bank, it may not be possible to open a bank account if the company does not have a physical office space in Hong Kong.
When it comes to sourcing, Hong Kong is still a highly strategic location for many international companies. For one, its proximity to suppliers around Asia coupled with efficient logistics allow for a smooth supply chain unparalleled by other cities within the region. In addition, Hong Kongâ€™s international business environment, low and simple tax system, and large pool of skilled professionals certainly give it an edge not only for sourcing, but setting up a business in general.
These bank account regulations have also become part of the â€śnew normalâ€ť – but donâ€™t let this stop you. With proper preparation, you can increase the likelihood of your bank account being opened. It may seem daunting but we can help you along the way and ensure as few headaches as possible.
There have been no official guidelines or checklists that will assure the opening of a bank account. However, there are a few “rules of thumb” that you can follow that can facilitate the process. Please note, these are recommendations only and do not guarantee that your bank account application will go through.