HK Bank Account Opening

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. HK banks are now conducting strict Due Diligence and Know-Your-Client (KYC) investigations in order to comply with AML requirements.

Background

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 company’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.

These bank account regulations have become part of the “new normal” – but don’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.

Preparation

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.

• Proof of business: includes documents showing that your business is truly operational, such as contracts with suppliers or customers, sales invoices, or order confirmations, for example.
• Proof of residential address: can be in the form of utility bills or bank statements issued within 3 months, from the directors, owners, and any other bank signatories.
• Transaction records: revenue of parent company and number of orders.
• Details of ultimate beneficiaries: organisational charts thoroughly outlining the company’s ownership   structure.
• Office space: for certain banks, companies must rent an office space in Hong Kong.
• Shareholder physical proof: some banks require that owners with more than 10% shareholding in the company must appear physically in person at the bank.
• Corporate documents: such as your business registration and certificate of incorporation.