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INTERSHORES I Account Opening Requirements Update

The Senior Manager at Business Banking Segment Management team in Bank of China (Hong Kong) and the Associate Partner of Entity Compliance & Governance of Law at Ernst & Young spoke about bank account opening requirements, practice and challenges nowadays at The Hong Kong Chartered Corporate Governance Institute on 15 March 2022.

 

Bank Account Opening Challenges Nowadays

1.   Banks in general do not welcome paper presence. Thus, it is crucial to provide the bank with sufficient documentation to validate the business presence in Hong Kong.

2.   Company carrying out business in industries regarded as high risk by banks may make it difficult to open a bank account (e.g., virtual currencies, gambling, weapons/ firearms, tobacco products, pornographic businesses, diamond & gems, etc.).

3.   Certain nationalities may face greater restrictions than others when opening bank accounts, such as those nationalities and countries that are currently subject to financial sanctions.

4.   Overall, the banking system’s anti-risk compliance can pose obstacles when opening a business bank account in Hong Kong, including the following:

i.   Have to come to Hong Kong in person – most banks request that all/quorum of directors/authorized signatories to attend the account opening interview and verify signatures in Hong Kong.

ii.   Bank would require documents such as contracts, invoices, business plan to fully understand the business of the company – New start-up business may not have invoices readily available, and provision of these documents may conflict with confidentiality.

iii.  Bank may also consider a company’s expected volume of transactions and types of services required during their review process.

iv.  The process may take several months – As banks are regulated to work with compliance departments that may take months to analyze the supporting information and documents provided. Also, the due diligence process is not always evident, which makes it difficult to understand the chances of being able to open a bank account.

v.   Bank may further request for additional paperwork and proof during the application reviewing period – Company has to take time to look for these supplementary documents which may not be readily available.

 

Process to Open a Bank Account in Hong Kong

All banks in Hong Kong require clients to complete an initial application followed by the company’s directors visit to the bank for identity verification.  The general procedure is summarized as follows:

 

1.   Complete the bank online account opening application and submit the basic company’s documents.

2.   The bank reviews the online account opening application and advises on the additional documents required (e.g., business plan, business proof, etc.).

3.   Attend the bank account opening meeting at the bank to discuss the intended business activities and provide the bank with relevant documents to support the intended activities and business experience.

4.   The bank processes the account opening application and decide whether to accept/reject the application.

 

Usual Required Documents Checklist

1.   Company registration documents in certified copy, such as Certificate of Incorporation, Business Registration Certificate, Articles of Association, Incorporation Form, Annual Return, etc.

 

2.   An extract of the board resolution approving the opening of bank account.

 

3.   A copy of each of the following documents from directors, authorized signatories, shareholders (10%+) and beneficial owners of corporate shareholders:

 

i.   Identification documents e.g. Hong Kong identity card, passport.

ii.   Former name/alias proof, if applicable.

iii.  Residential address e.g. utility bill, bank statement, driving license.

iv.   Tax status (CRS/FATCA).

 

4.   A list of authorized signatories’ specimen signatures which have to be verified by the bankers.

 

5.   Proof of business, e.g., business plan, purchase and sales invoices, contracts, agreements, bills, etc.

 

6.   Account opening form, duly completed and signed.

 

7.   An initial deposit.

 

Bank's Usual Question

1.  Question in General

i.   Incorporation date of the company (if more than 6 months, reasons of opening an account).

ii.  Whether registered address, operating address and correspondence address are the same?

iii. Whether the applicant company is part of a group?

iv. The nature of business and mode of operation, details of sales and suppliers including location, types of industries, etc.

v.  Size of company (no. of staff, estimated turnover).

vi. Objective of account opening, estimated no. of incoming and outgoing transactions, estimated size of each transaction, currencies involved.

vii. Source of wealth and source of fund of the company.

 

2.   For overseas company requiring a HK account

i.    Reason for a bank account in HK?

ii.   Is there any banking transaction with any affiliated company in Hong Kong?

iii.   Whether the business involves cross border transaction, details of transaction location ?

iv.  Is there any in-charge person stationed in HK, how to operate the bank account to be applied?

v.  Operating address and correspondence address is in HK?

 

3.   For Startups

i.   The background of the management.

ii.  Reason for starting the business?

iii.  Detail business plan and operating objective.

iv.  Source of wealth and source of funds for the startups? Size of funds to be incurred.

 

Why need professional practice like us to help you in account opening?

1.   We know bank better, we know their preference and their don't.

2.   We have several years of account opening experience.

3.   We get regular update from banks and government body.

4.   Save your time and effort.

 

Role of Professional Practice in Account Opening

Due to the totality of complexity, you may consider INTERSHORES to assist account opening process to do the following:

 

1.   Initial completion of available info in the application form.

2.   Preparation of a board resolution.

3.   Arranging for the required supporting documents to be certified as Chartered Secretary/ Governance Professional.

4.   Drafting of basic business plan.

5.   Consolidate, compile and fine tune the required documents before delivery to bank.

6.   Liaise with the bank officers throughout the bank account opening process and keep the company informed of the account opening requirements and status.

 

Need Assistance

INTERSHORES has over 20 years of corporate services experience and can assist you in account opening.  Please do not hesitate to contact us at info@intershores.hk or by whatsapp at (852) 6499 4686  if you are interested in account opening in Hong Kong, Singapore or in offshore jurisdiction.

 

Whatsapp : (852) 6499 4686

Phone : (852) 2186 6936

Email : info@intershores.hk

 

 

Disclaimer:

Whilst reasonable care has been taken in provision of information above, it does not constitute legal or other professional advice. INTERSHORES does not accept any responsibility, legal or otherwise, for any error omission and accepts no responsibility for any financial or other loss or damage that may result from its use.  In particular, readers are advised to take appropriate professional advice before committing themselves to any involvement in jurisdictions, vehicles or practice.

 

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