Opening a bank account in Hong Kong is often a vital first step to establishing a business presence.
However, financial regulations in the SAR have been tightened to combat the city's designation as a tax haven.
Investors need help producing the required documents and conditions for maintaining fixed deposits. Many banks are expected to impose a monthly charge for failing to maintain a balance above a certain minimum amount.
It is, therefore, important for foreign investors to understand the procedures and documents required. The internal practices of the bank may vary from one to another, but generally, the following procedures can be expected:
- Most banks will require an initial appointment via phone, email, or physical visit;
- Following this, a preliminary review is usually conducted by phone interview, electronic questionnaires, or physical meeting with directors, or by sending supporting documents to the bank manager;
- If the preliminary review is passed, both parties will meet to sign the relevant bank application forms and documents, as well as pay the initial deposit and application fee:
- Deposit differs according to the bank and is subject to change occasionally.
- Signatories also differ according to the bank and time. While some banks accept certified and actual copies of shareholders' IDs, others require the director/shareholder/ beneficial owner/ nominee to be physically present. In most cases, banks require the same number of people attending as that form quorum in a board meeting according to the Articles of Association to satisfy their Know Your Customer procedure.
- At this stage, the bank manager will send the application for the department review, which typically takes one to two months. It is typical for the review department to require further supporting documents before finally opening a new bank account on your behalf.
The following documents are required during the application:
- Company documents: Business Registration Certificate, Certificate of Incorporation, Articles of Association, and NNC1 form.
- Proof of business: Documents required vary from bank to bank but generally include evidence of the business's nature and industry experience. For example, issued/ received invoices, business plan descriptions, supplier agreements, bank reference letters, and websites.
- Personal documents: Passport and residency proof (for example, utility bill, electricity bill, or bank statement, which are issued within three months and include the holder's address and name).
- Source of Funds: The bank would ask for the source of funds for the investment to the Hong Kong company. For example, investor's bank statements.
When a company is labeled as a 'shell company,' it undergoes increased scrutiny. In this context, a shell company is defined as a corporation that doesn't engage in business activities but funnels funds for affiliated companies. It is essential to provide the identity documents of its beneficial owners to establish a bank account for a shell company.
Once the bank account has been approved, the investor will receive the bank account number, bank cards, and access codes.
Opening a bank account online
As Hong Kong’s financial regulations follow strict anti-money laundering rules, opening a bank account online is impossible if it’s the applicant’s first one in Hong Kong.
However, once the applicant opens a bank account in Hong Kong and sets up online banking, they can open other accounts online.
In any case, businesses are advised to engage a professional service provider in Hong Kong to get everything done in advance, considering the complexity.
Advantages of virtual banks |
Disadvantages of virtual banks |
|
|
Money service operators
Another digital banking solution is money service operators. They usually offer services such as dedicated payment instructions, the ability to receive money via domestic or international bank transfers, and links to third-party services or currency exchange.
Virtual banks could offer a more convenient and cheaper service for foreign SMEs operating in Hong Kong. This condition is particularly true for business owners who operate subsidiaries in Hong Kong that primarily function as holding companies. However, the virtual banking industry is still growing and may not be reliable enough for companies.
Opening offshore bank accounts for Hong Kong companies
Though most Hong Kong incorporated companies choose to open their bank accounts in the SAR, in theory, they are not mandated to own a corporate bank account in Hong Kong. Instead, they can register a bank account in other jurisdictions.
Hong Kong companies can open offshore bank accounts easily in most foreign countries. Each bank stipulates detailed protocols and requirements.
When it comes to bank account options for offshore companies in Hong Kong, companies have two primary choices:
- Open business bank account with local banks: If you're an offshore company looking to establish a local bank account, be prepared for several steps. These include interviews with your company's directors and shareholders, thorough inquiries into your business activities, scrutiny of the sources of your funds, and discussions about your transaction volumes. It's advisable to seek the assistance of experienced corporate service providers or accounting firms.
- Open business bank account with offshore banks: If you're an offshore company looking to establish a local bank account, be prepared for several steps. These include interviews with your company's directors and shareholders, thorough inquiries into your business activities, scrutiny of the sources of your funds, and discussions about your transaction volumes. It's advisable to seek the assistance of experienced corporate service providers or accounting firms.
- Offshore bank considerations:
- Security: Offshore bank accounts do not have the same protection as accounts under the Financial Services Compensation Scheme (FSCS). Alternative security measures may safeguard certain offshore accounts;
- Taxes: It's crucial to remember that you must report your income to the appropriate tax authorities and disclose any interest earned from offshore accounts;
- Costs: Certain offshore accounts might incur a monthly fee or impose charges for international transactions, while others may not. Additional fees and expenses could also be applicable, so it's important to carefully review the terms and conditions before deciding to open an offshore account.
- Offshore bank considerations:
International and national banking institutions
As one of the top international financial centers, Hong Kong has one of the highest concentrations of banking institutions in the world, with over 70 of the largest 100 banks in the world having a presence and over 29 multinational banks having their regional headquarters in Hong Kong.
Hong Kong maintains a three-tier system of deposit-taking institutions comprising:
- Licensed banks
- Restricted license bank
- Deposit-taking companies
They are classified according to the amount and term of deposits accepted and the nature of the business and are collectively known as authorized institutions. At the end of 2022, Hong Kong had 155 licensed banks, 15 restricted licensed banks, and 12 deposit-taking companies.
List of bank institutions in Hong Kong
Licensed Banks
Incorporated in Hong Kong
Airstar Bank Limited
Ant Bank (Hong Kong) Limited
Bank of China (Hong Kong) Limited
Bank of Communications (Hong Kong) Limited
Bank of East Asia, Limited (the)
China Citic Bank International Limited
China Construction Bank (Asia) Corporation Limited
Chiyu Banking Corporation Limited
Chong Hing Bank Limited
Citibank (Hong Kong) Limited
CMB Wing Lung Bank Limited
Dah Sing Bank, Limited
Dbs Bank (Hong Kong) Limited
Fubon Bank (Hong Kong) Limited
Fusion Bank Limited
Hang Seng Bank, Limited
Hongkong and Shanghai Banking Corporation Limited (the)
Industrial and Commercial Bank of China (Asia) Limited
Livi Bank Limited
Morgan Stanley Bank Asia Limited
Mox Bank Limited
Nanyang Commercial Bank, Limited
OCBC Bank (Hong Kong) Limited
Ping an OneConnect Bank (Hong Kong) Limited
Public Bank (Hong Kong) Limited
Shanghai Commercial Bank Limited
Standard Chartered Bank (Hong Kong) Limited
Tai Sang Bank Limited
Tai Yau Bank, Limited
Welab Bank Limited
ZA Bank Limited
Incorporated outside Hong Kong
Agricultural Bank of China Limited
Australia and New Zealand Banking Group Limited
Banco Bilbao Vizcaya Argentaria S.A.
Banco Santander, S.A.
Bangkok Bank Public Company Limited
Bank J. Safra Sarasin AG
Also Known as:
Banque J. Safra Sarasin SA
Banca J. Safra Sarasin SA
Bank J. Safra Sarasin Ltd
Bank Julius Baer & Co. Ltd.
Bank of America, National Association
Bank of China Limited
Bank of Communications Co., Ltd.
Bank of Dongguan Co., Ltd.
Bank of India
Bank of Montreal
Bank of New York Mellon (the)
Bank of Nova Scotia (the)
Bank of Singapore Limited
Bank of Taiwan
Bank Sinopac
Banque Pictet & Cie SA
Barclays Bank PLC
BDO Unibank, INC. Also known as : BDO
BDO Unibank
BDO De Oro
Banco De Oro Unibank
BDO Banco De Oro
BNP Paribas
Ca Indosuez (Switzerland) Sa
Canadian Imperial Bank of Commerce
Cathay Bank
Cathay United Bank Company, Limited
Chang Hwa Commercial Bank, Ltd.
Chiba Bank, Ltd. (the)
China Bohai Bank Co., Ltd.
China Citic Bank Corporation Limited
China Construction Bank Corporation
China Development Bank
China Everbright Bank Co., Ltd.
China Guangfa Bank Co., Ltd.
China Merchants Bank Co., Ltd.
China Minsheng Banking Corp., Ltd.
China Zheshang Bank Co., Ltd.
Chugoku Bank, Ltd (the)
Cimb Bank Berhad
Citibank, NA.
Commonwealth Bank of Australia
Coöperatieve Rabobank U.A.
Credit Agricole Corporate and Investment Bank
Credit Industriel Et Commercial
Credit Suisse AG
CTBC Bank Co., Ltd.
DBS Bank Ltd.
Deutsche Bank Aktiengesellschaft
DZ Bank AG Deutsche Zentral-genossenschaftsbank, Frankfurt Am Main
E.Sun Commercial Bank, Ltd.
East West Bank
EFG Bank AG
Also Known as:
EFG Bank SA
EFG Bank Ltd
Erste Group Bank AG
Far Eastern International Bank
First Abu Dhabi Bank PJSC
First Commercial Bank, Ltd.
Hachijuni Bank, Ltd. (the)
HDFC Bank Limited
Hong Leong Bank Berhad
HSBC Bank PLC
HSBC Bank USA, National Association
Hua Nan Commercial Bank, Ltd.
Hua Xia Bank Co., Limited
Icici Bank Limited
Indian Overseas Bank
Industrial and Commercial Bank of China Limited
Industrial Bank Co., Ltd.
Industrial Bank of Korea
Ing Bank NV.
Intesa San Paolo SPA
JPMorgan Chase Bank, National Association
KBC Bank N.V.
KEB Hana Bank
Kookmin Bank
Land Bank of Taiwan Co., Ltd.
LGT Bank AG
Also Known as:
LGT Bank Ltd.
LGT Bank SA
Malayan Banking Berhad
Mashreq Bank - Public Shareholding Company; Also known as: Mashreqbank PSC
Mega International Commercial Bank Co., Ltd.
Melli Bank PLC
Mitsubishi UFJ Trust and Banking Corporation
Mizuho Bank, Ltd.
MUFG Bank, Ltd.
National Australia Bank Limited
National Bank of Pakistan
Natixis
Nonghyup Bank
O-bank Co., Ltd.
Oversea-Chinese Banking Corporation Limited
Philippine National Bank
Ping An Bank Co., Ltd.
Bank Negara Indonesia (Persero) Tbk.
Qatar National Bank (QPSC)
Royal Bank of Canada
Shanghai Commercial & Savings Bank, Ltd. (the)
Shanghai Pudong Development Bank Co., Ltd.
Shiga Bank, Ltd. (the)
Shinhan Bank
Shizuoka Bank, Ltd. (the)
Skandinaviska Enskilda Banken Ab
Societe Generale
Standard Chartered Bank
State Bank of India
State Street Bank and Trust Company
Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Trust Bank, Limited
Taipei Fubon Commercial Bank Co., Ltd.
Taishin International Bank Co., Ltd
Taiwan Business Bank, Ltd.
Taiwan Cooperative Bank, Ltd.
Taiwan Shin Kong Commercial Bank Co., Ltd.
Toronto-Dominion Bank
UBS AG
UCO Bank
Unicredit Bank AG
Union Bancaire Privée, UBP SA, Also known as: United Private Bank, UBP Ltd
Union Bank of India
United Overseas Bank Ltd.
Wells Fargo Bank, National Association
Woori Bank
Yuanta Commercial Bank Co., Ltd
Restricted License Banks
Incorporated in Hong Kong
Allied Banking Corporation (Hong Kong) Limited
Bank of America Securities Asia Limited
Bank of China International Limited
Bank of Shanghai (Hong Kong) Limited
Citicorp International Limited
Goldman Sachs Asia Bank Limited
Habib Bank Zurich (Hong Kong) Limited
P. Morgan Securities (Asia Pacific) Limited
KDB Asia Limited
Orix Asia Limited
Incorporated outside Hong Kong
Euroclear Bank
Kasikornbank Public Company Limited
Korea Development Bank
Bank Mandiri (Persero) TBK
Siam Commercial Bank Public Company Limited
Deposit-taking companies
Incorporated in Hong Kong
Bcom Finance (Hong Kong) Limited
BPI International Finance Limited
Chau's Brothers Finance Company Limited
Chong Hing Finance Limited
Commonwealth Finance Corporation Limited
Corporate Finance (D.t.c.) Limited
Fubon Credit (Hong Kong) Limited
KEB Hana Global Finance Limited
Kexim Asia Limited
Public Finance Limited
Vietnam Finance Company Limited
Woori Global Markets Asia Limited
Virtual banks in Hong Kong
In addition to traditional banks, another emerging option is virtual banks, which have no physical branches and focus on digital services. This concept is still very new to Hong Kong, and as of May 31, 2023, the HKMA only granted eight licenses for virtual banking.
Virtual Banks Incorporated in Hong Kong |
1. Airstar Bank Limited |
2. Ant Bank (Hong Kong) Limited |
3. Fusion Bank Limited |
4. livi Bank Limited |
5. Mox Bank Limited |
6. Ping An OneConnect Bank (Hong Kong) Limited |
7. WeLab Bank Limited |
8. ZA Bank Limited |