As mentioned above, since the international community has stepped up its efforts to combat money laundering, terrorist financing and tax evasion in the past few years, banks have been required to comply with more stringent international regulatory requirements and it has become much more difficult to open business accounts.
As a small business or a first time entrepreneur, what can you do to solve the problem of opening a bank account?
1) Avoid Big Banks
Some of the big international banks in Hong Kong have more complicated compliance policies as they have to also meet the requirements of headquarters and international regulators, so the approval requirements are particularly rigorous.
However, there are other small and medium-sized local banks that see this opportunity and are more aggressive in their approach in order to expand their customer base. So if you are a start-up company, you may consider these banks, as the approval criteria are generally more lenient than those of bigger banks, and the approval time is usually shorter.
For those who are really keen on big banks, you can open an account with a smaller bank first and then transfer the account after the company has been in operation for a year or two.
2）Overseas Bank Accounts
If you have a business where money is mainly transferred by telegraphic transfer (e.g. international trading business), then you may consider applying for an overseas bank account or even offshore bank account. Many banks there also accept Hong Kong companies to apply for accounts across the border, and the approval criteria are more reasonable and lenient than in Hong Kong. In some cases, banks can even conduct face-to-face interviews with customers via online video, so applicants do not have to travel to the country to meet with the bank.
You could also consider getting an offshore bank account, however, it must be pointed out that it is very risky as many of these banks are registered in backward places such as Central America, the Caribbean or Eastern Europe, where government regulations may not be as stringent, and the size of these banks is relatively small. In addition, these banks mainly rely on service fees to make a profit, so their annual fees or collection and remittance fees are much higher than traditional banks.
Nevertheless, some of our customers have successfully opened accounts with Swiss offshore banks and have received good feedback.
3）Use Bank’s Value-added Services
If your company has its own staff, you can promise the bank that you will be paid salary uniformly by the bank, as well as using the bank’s labor insurance services or Mandatory Provident Fund (MPF) services, thus achieving a win-win situation. As the bank sees that there is a profit to be made from you, there is a greater incentive to approve the application.
Formation Kit is skilled and experienced in helping customers opening company bank accounts. If you need any further information, please feel free to contact us.
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