Why Your Business Bank Account Opening in HK is Rejected?
Updated on 16 July 2018: As an alternative to Hong Kong, Singapore is the world’s leading financial hub in Asia and is praised a the safe harbor and free port of capital. Some banks in Singapore are offering remote account opening scheme to selected clients, regardless of their citizenship, residency and place of incorporation (for corporate body). Click here for details of remote Singapore bank account opening service.
Updated on 16 July 2018: We found that some Hong Kong banks are more open to Hong Kong and overseas companies with non-Hong Kong residents directors and/or shareholders, details are here.
Update July 7, 2016: After a year of hard working, we have seen that HSBC Hong Kong rejects startups and small businesses applicants of commercial account opening. If you are targeting HSBC as your only choice of bank in Hong Kong, we recommend you to read this post firstly to save your effort.
Update June 1, 2016: We have launched a intermediary service to cope with demand for commercial bank accounts opening. The program aims at enhancing the successful rate of account opening by matching the right banks to the right applicants and offering in-depth analysis of applicants business proof. We guarantee to refund our services fee to the clients if their bank account applications are rejected. Details of program is here.
If you want to be a business startup in Hong Kong, incorporation in Hong Kong can be done in 1 working day without any hassle (our 1-day Hong Kong company formation package can help!). On the contrary, business bank account opening in Hong Kong banks is a challenging task.
Hong Kong residents got rejection from banks
Opening a corporate bank account for your new Hong Kong company to receive payments and pay bills is essential to enable your business to run.
A corporate bank account in Hong Kong well-known bank is not only an public identity of your business, but also an important tool to manage financial transactions.
However, the majority of banks in Hong Kong have enforced stringent Know-Your-Client policy (KYC), we know that local startups got rejected by the banks due to requirement of business turnover, business contracts, office address, and background of all partners involved in your business – which are impossible for small company to meet during budding stage.
The startups without any corporate bank account have to conduct business by their owners’ personal bank account, their customers even require their H.K.I.D. card of account owners as well as their company incorporation documents for verification of ownership of the beneficial bank account. Privacy protection to these small business owners barely exist.
Seeking help from Hong Kong regulatory body
Startups consider unfairly treated in account opening application by Hong Kong banks, they should make a complaint to the bank. When banks failed to properly handle complaints, startup should complain to the Hong Kong Monetary Authority (HKMA) by logging complaint form to the bank.
Complaints about Banks – Banking Stability – Key Functions of Hong Kong Monetary Authority
Possible causes of difficulty in bank account opening
Recently, Hong Kong HSBC and Standard Chartered Bank is posing greater difficulty in bank account opening, probably because these two banks involved in money laundering investigation by the US Federal Bureau of Investigation (FBI), leading to the implementation of the terms of accounts opening would be more stringent to prevent possible fraud.
Money laundering cases have been rising globally, so banks in Hong Kong also use cautious approach to open bank accounts. Some banks even ban to open for certain nationality as well as some business activities.
2 Tips to startups in bank account opening
Entrepreneurs, regardless of business size, have to be appropriate to show proof of their business by putting document, contracts, agreement to the bank for the account opening application.
Every Hong Kong banks have Know Your Client policy, all owners of the startup must meet with bankers who questions about the company’s business especially the money flow to understand the company’s business operation to see if there is suspicion of money laundering or offenses.
Every entrepreneurship begins from an idea, then definitely will encounter numerous problems on the way of difficulties, especially if you are starving to subvert an industry. Bank account opening in Hong Kong is the most basic challenge of running your business. As a local startup, it runs business using the owners’ personal account, meanwhile keeps making account opening applications in various banks along with growing the business. At least, a bank accepted their application after its first anniversary.
If this new company had focused only the matter of bank accounts, it would have failed undoubtedly.
Bank account opening is a problem for entrepreneurship in Hong Kong, but it is not the only one and it can be overcame someday when the business grows.