For oversea entrepreneur who are mostly residing outside Hong Kong, suspension on their newly opened Hong Kong HSBC corporate bank account means the stop of business.
Recently, we received HSBC letters to our oversea clients who are our virtual office and registered address service to inform them their HSBC corporate bank accounts in Hong Kong were suspended and reactivation was required. Although their fresh HSBC bank account was opened for their Hong Kong Limited Company and they never dispute the bank, they were still hit by HSBC without a sign.
Banks have their “rights” to freeze their corporate clients account, but the answer to “how to avoid your corporate bank account get frozen as well as get re-activated” is in priority.
Who is affected?
From our study, all the “victim” have the following similarity:
- beneficial owner is not a Hong Kong permanent residents (i.e. holders of foreign passport), and
- their Hong Kong HSBC bank account are “fresh” – opened less than 1 year, and
- their bank accounts are opened for their “fresh” Hong Kong Limited Company – opened less than 1 year, and
- their accounts had registered zero transaction.
How to avoid suspension?
We made a conclusion: when HSBC Hong Kong noticed any corporate account which has foreign beneficial owner yet to register any transaction activity for 10 successive months or more, the accounts will be blocked.
To counteract, we urge every oversea corporate account owners to make at least 1 transaction via this account in every 6 months to avoid suspension.
On the other hand, the oversea owners may employ local nominee to go complete the bank account opening such as nominee directors, shareholder and bank account owner.
How to reactivate bank accounts?
Since the accounts is for corporate, the company’s director is requested to visit (physically present in) Hong Kong to meet with local HSBC banker, and provide the most up-to-date account holder information for the banker to apply for reactivation of the account. Processing lead time is varying, it’s better to collect all this information before visiting Hong Kong.