Because of its international financial status, excellent business environment and free economic market, Hong Kong has attracted many entrepreneurs to choose to register companies and open bank accounts in Hong Kong. So why is it more and more difficult to open a Hong Kong account?
The reasons are multiple. The root cause is that it was too easy to open an account in Hong Kong in the early years and the supervision was not strict, which led to many criminals using bank accounts opened in Hong Kong for money laundering, illegal fundraising and other illegal operations.
For example, in late 2012, Standard Chartered was forced to pay $327 million in settlements for thousands of financial transactions for clients in Iran and Sudan. HSBC also paid a $1.92 billion settlement to the U.S. government for money laundering. As a result, local bank accounts in Hong Kong appear "hard to find" phenomenon. In addition, the 2018 CRS common reporting standards and the implementation of the anti-money laundering and anti-illegal fundraising policies in Hong Kong will increase the maintenance and management costs of Hong Kong banks. cost. Therefore, it is reasonable to open a local bank account in Hong Kong.
Why is it difficult to open a bank account?
1. Increased demand for bank account opening
Registering a Hong Kong company and opening a Hong Kong bank account is the first step taken by many companies and entrepreneurs to develop overseas markets. With the increasing demand, Hong Kong banks have to tighten their account opening policies.
2. Bank Profits
In the past few years, the company did not require public accounts, which led to the opening of a large number of "zombie accounts" by banks. These accounts did not bring income to the bank, but resulted in high management costs. The bank requires a relatively large cost to open an account. Considering its own profit, the bank will strictly screen customers when opening an account.
3. Attack the world illegal organization
With the intensification of overseas capital flows, many illegal groups have also participated in the illegal business activities. In order to prevent and attack the world's illegal organizations, banks must develop relevant strategies to prevent tax evasion and capital flight.
4. Involving sensitive countries
The industry is restricted. As long as business and capital transactions involve sanctioned countries and war-torn countries, such as Iran, Russia, Afghanistan, Congo, Belgium, etc., they will be rejected by banks.
5. Government financial regulation is getting stricter
The government strengthens the control of offshore accounts to prevent money laundering and capital outflow to avoid tax evasion, which naturally tightens the supervision and review of bank account opening.
Account opening requires skills
In today's CRS environment, many customers often ask a question when inquiring about setting up a Hong Kong company:
"I heard that it is difficult to open a Hong Kong account now, is that true?"
"Yes, but it's not impossible to open."
In response to this problem, we must first know that a bank is a profit-making institution, and the premise of opening accounts for customers is to obtain more benefits. But at the same time, the bank's awareness of risk control is also very strong, and will fully consider the risk of the opened account, so as to decide whether to open an account for the customer.
Opening an account in Hong Kong actually requires certain professional skills. Many people who are rejected for opening an account are often not due to their own qualifications, but more because of the control of some details.
When applying for a bank account, you should pay attention to the following issues
1. The information is not ready
This is the main reason why many clients are rejected. The success rate of account opening is extremely low due to incomplete information. Many customers have not provided valid documents, which has prolonged the application time or even failed, and left a record of unsuccessful account opening in the bank.
2. The company name contains sensitive words
We all know that there are certain rules for naming companies in Hong Kong, and they cannot contain sensitive words such as "trust, securities, finance, investment", which make it difficult for banks to pass the audit. Generally, in this case, the bank will require relevant information to be audited.
3. Not gaining bank trust
During the communication with the account manager, the bank has doubts, such as asking about the purpose of opening the account, the industry engaged in, the source of funds, etc. The vague answer will cause the bank to distrust the account holder. Therefore, when opening a bank account, you must try to gain the trust of the bank, so that the Hong Kong bank believes that the Hong Kong company is carrying out regular business and has a certain economic strength. In the future, the Hong Kong bank account will be used for normal business transactions.
