Want to open up your bank account remotely for your Hong Kong company?
Today, let’s go through this. It’s such a hot debate going on, let’s use this post to make a difference!
You Can’t Open Your Bank Account Without Being in Hong Kong
The quick answer is, you need to be in Hong Kong to open your bank account. They want to meet all the directors and significant shareholders of the company to know who the client is.
I’ve talked to almost every bank in Hong Kong over a 2 day full time effort, and all needed the directors to come in person.
But there are some ways around it, I’ll dig in a bit today.
HSBC in Mainland China Works
So for those entrepreneurs in Mainland China with Hong Kong companies, you’re in luck. They will allow you to apply for a Hong Kong business account from a HSBC in Mainland China.
There are fees, and in 2016 these fees are going up. From what people have told me who did it, it’s about 2,000 Chinese Yuan range. They choose to come to Hong Kong instead, as that is about the same fee as an airline ticket.
So maybe you need to come to Hong Kong anyway. Let’s say your passport visa is running low on time. So make a visa run and then also apply for the bank account.
Don’t have a reason to come to Hong Kong and you’re in North China? It may make sense to pay this extra fee to do a remote bank account opening. I’d love to hear people’s experiences in the comments of today’s post (thanks in advance!)
HSBC Premier Customers
So, I’m putting this in here because this is one I hear over and over. As far as my research and network of people tell me, it is not possible in today’s environment, (yes, we’re in 2016 now), to open a Hong Kong business bank account from non-HK or non-Mainland China HSBC branches.
In the past years, people told me that premiere level (minimum deposit of 1,000,000 USD) could open bank accounts in other countries. Maybe that was for personal and not business, and maybe that is still active up into today. But I have asked bankers, who have become somewhat of my friends, and they assure me you cannot open a business bank account for HSBC HK outside of Hong Kong or China.
Again, please prove me wrong! You can leave a comment below or send us an email.
DBS Hong Kong Has a 20% “Application”
Few have mentioned that you can apply for DBS bank online. So I was like, heck let me try this. They call it an application, but in my opinion it’s more like a lead capture form.
They asked me a few questions about me and my business, and once I did that, the site said they would email me later for more details about applying.
Not sure if my case was that horrible, but I never got a response back! Still seems to me I need to go there in person. And now their new SME bank application fee (upfront, no refunds) is 10,000 HKD! Insane right?
Anyway, so that is what DBS calls applying online.
Why Is It Not Possible To Open An Account Online or Remote?
So you may be wondering why it’s not possible to apply online.
There are 2 possible reasons:
- They are afraid of fraud
The financial industry has been getting tougher and tighter lately. Government regulators are slamming banks with fines. If they feel the bank didn’t do a good enough job in verifying the banking client (KYC – Know your Customer). It’s the job of the bank to ensure the client isn’t a terrorist or a money launderer.
The banks need to make sure they don’t “slip up”. If they let a “bad egg” who says they’re a trading company for t-shirts get by but in reality is doing drug trades, slip through the cracks. Uh-oh, bank is in a big problem.
So what’s happening is the government regulators are pushing the job of being a policeman to the banks. Seems kind of smart for the government. They don’t need to hire more people to dig into the banks and can instead put the responsibility and overhead onto the banks.
- They don’t want to invest / embrace technology
Another reason is, I’m interested in opening a bank in Hong Kong. I talk to tons of people frustrated with the current banking options there and lack of customer service.
In a normal business industry, a new tech company could come along and disrupt the old players. But banking, in Hong Kong at least, is so sealed – when has a new bank opened here? I’ve heard it was in the 1970s!
So what is the incentive for the banks to innovate? They’d need to spend a lot of time and money. Plus they’re not good at the internet, they’re better at crunching excel formulas and clearing cash trades.
As far as I understand, the Hong Kong banking association allows digital signatures for online banking. That means that at the least, for account maintenance items such as updating details on your bank, you are legally able to do online. But most banks still want you to come in person or mail a hand signed document to do that.
Some Have Opened Banks Outside of HK (Offshore)
So one thing I have been learning is that some who don’t get a HK bank end up using their HK company to open a bank account in Europe or in an offshore island. Seems a bit strange to me, but it is a business account and not a personal account, so the owners limit their liability in the business. Would need to dig more into this, some use it to receive money from customers in those regions / countries.
A Tip – Add New Owners / Directors Later On
So what some do, to avoid having to have all the owners come to Hong Kong to open the bank account, is keep it simple to start. Maybe one or two directors when filing the new company and applying the bank account.
Later on, once things are operating and stable, then you can update your company documents and add the new shareholders and directors.
This is one tip that has saved a lot of travel time and headaches for many clients.
Sure, those owners not on the original company documents are taking a risk. But they also need to be aware if they can’t all fly to Hong Kong together, this is the most reasonable option. You can have a personal contract between the owners that can help ensure you will get your shares in a future date. You should trust your business partners that much anyway.
This Is What We’re Working On – To Make It Easier
As Global From Asia has converted from a podcast and blog into a full service agency, we have picked up more and more cases like this. We are building one big strong case and talking to the Hong Kong government about it.
In order for Hong Kong to stay ahead of the game in the global business space, they need to work on being more online friendly.
If you want to get involved, please let us know! Hopefully this blog post can spawn some new ideas and get some change to happen!
Why Do you Think It’s So Hard To Apply For Banks in HK Online?
So I’d love to hear from you! Please leave your comments and thoughts in the comments section below. Let’s help each other to figure this puzzle out.
I’m curious if you have had any problems applying for a new HK bank account. What happened, why did you get declined? Let’s help each other and see if we can fix this for the long term.
Best of luck on your global business domination! Original: here