Since the Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) regulatories have come in force, we see the Hong Kong banking industry has imposed extremely stringent Know Your Customers (KYC) / Customers due diligence (CDD) policies to their clients.
Especially to the non-residents, they vows that Hong Kong is no longer a place of doing business as their accounts are rejected by those international banks.
We have talked the difficulties in account opening with our networked bankers, we are told constantly the banks operate under risk avoidance approach, so they simply reject new applicants when any chance of hitting AML/CFT laws are seen on their applications.
As we have been working in corporate service industry in Hong Kong since 2009, we agree that we need to pay extra effort nowadays in assisting our clients going through Hong Kong bank account opening procedure. From our experience, we are sure that banks have varying preference (or discoverability) of clients’ characteristics, “simple” bank account opening in Hong Kong is gone forever, but we have networked with over 30 banks here, each bank have their own characters, we can ensure our clients that we are able to help your bank account opening.
In order to secure bank account, we have to match our clients with the suitable banks based on the client’s background and the most updated bank’s appetite. Sometimes our choice of bank is not the first choice in their mind, but we succeed finally.
Here is a successful case study of an oversea client:
Background of clients:
Early this year, we received a client originated from Belarus (the Republic of Belarus), a landlocked country in eastern Europe bordered by Russia to the northeast, asking for assistance in business bank account opening in Hong Kong.
FYI, Belarus is an industrial-agrarian economy, Russia accounts for about 50% of the country’s foreign trade. Nevertheless, Belarusian and Russian are both official languages there. Currently, Belarus is not flagged as “high-risk” jurisdiction on FATF publications.
Before reaching us, he had approached by himself to a few of the biggest name banks in Hong Kong. He followed their public instruction to prepare for required documents and filing the application forms, he attended the banker meetings to answered the their questions.
Finally, all of his applications were in vain after 2 to 3 weeks of waiting without explanation of these rejections from the banks. He had no idea to the internal policy of the banks, and shocked by the difficulty he was facing.
Pre-assessment of clients
As the first step to kick off, we had to know my client’s business and his requirement. Our specialists offer pre-assessment service for free-of-charge, we would collect the client’s company information and proof-of-business to tell how likely the client will obtain the company bank account in Hong Kong.
After reviewing the Belarus client, we known that he had a plan to expand his toy manufacturing enterprise to South Asia and China, thus Hong Kong business bank account was a critical window as Hong Kong had proven financial and monetary stability contributed by strict currency peg of USD 1 to USD 7.8 and solid legal system based on British common laws.
This client had strong and long term present in Belarus, his enterprise had proven transactions records with their clients mainly in Russia and Europe, including business contracts, receipts, invoices, shipment notes and bank statements.
At this point, we thought this case likely to overcome the hurdles of banks’ policy unless the clients could improve his supporting documents as follows:
- Quality of Translation: Following the bank’s requirement, he had employed translation services in his home country to translate all the non-English documents to English. We found that the translated English was below average of business communication, we suggested the documents required to redo the translations for better readability.
- Choice of Banks: In pursuit of internationalization, he went to the international banks which had very strong present in the Western. As he had frequent transactional record with Russian entities, we believed that this posed potential risk in view of these “Western banks” rather than risk.
- Preparation of Banks Interview: From his words, the bank interviews he attended did not end in friendly mood. He felt he was offended by the bankers who were challenging every business documents. Given that my client was not a native English speaker and the meetings were conducted in English, communication was not smooth there.
Networking with good banks
We had a comprehensive network of over 30 banks in Hong Kong, we thought we need to avoid all the Western banks since this Belarus client hit the wall in these banks.
As online banking and multi-currency services were demanded, we come up with some banks of Asian background. Initially, he hesitated to these banks because he afraid that they were not well known to his customers and suppliers. We, in response to his concerns, provided these banks figures, their presence in Southern Asia as well as their online banking capacity for his consideration.
After getting his agreement, we consulted with the target Asian banks, and we got a positive estimation on his account opening. Then, the client submitted his applications to these selected Asian banks along with his improved business documents as supporting.
These banks arranged the interview with the client in Hong Kong as a part of KYC policy. This time, we ensured that the client was well-prepared, more than the paperwork: We assisted our client to rewrite his business proposal in better English, we supported the client to fully understand the English terms before the meetings, nevertheless, the client bought some of toy products from his company to the meetings as an additional proof of their business.
Finally, one of the Asian bank replied the clients after 3 weeks that his application was approved.
Nationality may be widely said as a predetermination of some Hong Kong banks of their account opening. In the contrary, solid proof-of-business is critical for the banks to consider.
If you have any doubt about the company bank account opening in Hong Kong, you should select a good co-ordinator to support your application. AsiaBC offers guaranteed refund business bank account opening program for overseas business, kindly refer to the details here.