For years, one of the best practices for foreign companies has been to open a bank account in Hong Kong.
The jurisdiction was very popular for being stable, offering great banking services, and being easy to get into.
But over the last two years, all of that has completely changed.
Since China has taken over, banking in Hong Kong just isn’t what it used to be.
So, unfortunately, Hong Kong is no longer a jurisdiction that we recommend to our clients – unless they have a very specific client profile.
Read on to find out if Hong Kong is a jurisdiction you should be considering. And if not, where you should go instead.
Of course, if Hong Kong really is the best option for you, read to the end to find out the specific steps you need to take to be able to open a bank account in Hong Kong. And what to watch out for in the process.
Can You Open a Bank Account in Hong Kong?
While it is still possible to open a bank account in Hong Kong as a foreign business owner, the jurisdiction is not the same since China took over. It is now much more difficult to open bank accounts and there are fewer benefits to doing so. Read on to see if Hong Kong is a good option for you.
Before applying to open a bank account in Hong Kong, you’ll want to ask yourself whether banking here is really the best option for you and your company. In this article, we’ll help you answer that exact question.
We’ll also discuss the many challenges foreign business owners face during the account opening process. And, the new risks of banking in Hong Kong.
Before diving in, if this is your first time visiting GlobalBanks, don’t forget to download your FREE Business Banking Starter Guide. It’s designed to help your business find and open accounts with the services you need around the world.
Should You Open a Bank Account in Hong Kong… Yes or No?
Hong Kong has been a top banking option for years. Whether you were a foreign non-resident with a Hong Kong company or a non-resident entrepreneur looking to buy a Hong Kong company with a bank account, banking in Hong Kong offered unique benefits.
But, over the past two years, banking in Hong Kong has shifted tremendously. Hong Kong went from being a lively global center of trade, with few restraints and rules, to now being fully under China’s authoritarian control.
So, although Hong Kong has long been known as the corporate banking hub of Asia, if things continue as they are now, this won’t be the case for much longer.
Ultimately, Hong Kong shouldn’t be your first choice anymore. So when you see corporate service providers pitching Hong Kong bank accounts as the best and easiest option, be wary. In the best-case scenario, their information is outdated. In the worst case, they’re just trying to make a quick buck off of you.
We’ll explain the challenges that you’ll face when opening a bank account in Hong Kong and who a Hong Kong bank account is suitable for – to see whether or not it is the right option for you.
If it’s not the right option for you, we’ll cover some of the best banking alternatives available.
Of course, if you’re absolutely sure that Hong Kong is the right option for you, we’ll also cover how you can open a bank account without paying thousands of dollars in fees to service corporate service providers.
Sound good to you?
If so, let’s get started!
Challenges of Opening a Bank Account in Hong Kong
As we mentioned above, the process of opening a bank account in Hong Kong completely changed once China took over. Specifically when China introduced the National Security Law in Hong Kong.
So, what does that mean in terms of opening a bank account in Hong Kong as a foreigner?
Well, with strict rules and tighter regulations now in place, account opening has become almost impossible. Especially, for foreign non-residents looking to open corporate accounts.
Here are some of the most common challenges non-residents face when opening a bank account in Hong Kong…
Challenges of Opening a Bank Account in Hong Kong:
- Your company is not well established
- The bank concludes that you won’t be profitable for them
- Unable to provide proof of Hong Kong address
- Don’t have an acceptable Hong Kong phone number
- Unable to provide proof of personal ties to Hong Kong
- No employees working in Hong Kong
- No office presence in Hong Kong
- Strict opening requirements
- Strong compliance and due diligence procedures
- High rejection rate in foreign applications
- In-person account opening is likely required, with no opening guaranteed
- Unable to meet the deposit requirements
- And more…
If you’re unable to overcome the challenges listed above or meet all bank-specific requirements, the chances of you opening an account in Hong Kong are very slim.
Even if you get past the initial application stages, don’t be surprised if you have to wait several months for your application to be processed. Or if your application is then suddenly rejected with no explanation.
To have a chance at successfully opening a bank account in Hong Kong as a foreign non-resident business owner, you need to know specifically which bank and banker to apply with. Only then do you have even a slight chance to access Hong Kong’s banking system.
Beyond the application process, you must also be mindful of the risks you can encounter when operating a bank account in Hong Kong as a foreign business owner.
Risks of Operating a Bank Account in Hong Kong:
1. Hong Kong is a Corporate Service Provider Industry
To some, opening a business bank account in a corporate service provider industry like Hong Kong is an ideal way to save time and hassle. And, it’s true, at one point it did. But, unfortunately, today there are more risks than rewards in today’s Hong Kong banking system.
Increasingly we’re seeing Hong Kong corporate service providers promote Hong Kong companies and bank accounts to foreign non-residents without giving them the full information about the recent changes.
It’s clear that they aren’t considering the best option for their clients. Instead, they are just trying to sell as many Hong Kong companies as they can to meet their quota.
2. Accounts Are Expensive to Maintain (And to Open)
To open a bank account in Hong Kong, expect to not only pay an opening fee, an initial deposit, and ongoing monthly maintenance fees but also many ongoing services fees.
These service fees include:
- Deposits
- Withdrawals
- Transactions (local & foreign)
- Request for a report on account history
- Account statements
- Accounting services
- And more…
Not to mention the fact that if you go through a corporate service provider to open a business bank account in Hong Kong, you’ll also have to pay several thousands of dollars for their help in the process.
And, even if you pay their fees, these corporate service providers can’t guarantee you’ll be able to successfully open a bank account.
So, before you begin applying, please be sure that you’re aware of all the fees that may apply. This way, you avoid being caught by surprise by hidden fees.
As you may have gathered by now, we do not recommend Hong Kong as a top jurisdiction for foreign non-residents to start personal or corporate accounts.
Of course, if it’s the only choice available to you, we can help you open an account in Hong Kong. But luckily, several alternative jurisdictions are much better suited for foreign non-residents.
Alternative Business Banking Jurisdictions
At this point, the only thing left that is attractive about opening a bank account in Hong Kong is having access to some of the country’s private banking options.
But even then, there are many more jurisdictions that can offer you the same if not better private banking services. Best of all, those jurisdictions and banks are not under China’s imposing regulations and laws.
The key is in the fact that Hong Kong is home to a wide range of international banks.
For example, you could open an account with Citibank in the US and then use that account to gain access to the Hong Kong banking system.
This way you can get the majority of the benefits you’re looking for without the same risks of being fully under Chinese rule.
So, before you start applying to open a bank account in Hong Kong, you should consider all possible alternative banking options.
With the right information and if you know the specific banks (and bankers) to contact, you can open a bank account for a Hong Kong company outside of Hong Kong.
If you want to learn how to do this and which banks to target, check out our premium members-only report “How to Open International Bank Accounts for Offshore Companies”. In it, we share all of these specifics along with detailed account opening strategies to guide you through every step of the process.
You can access this report immediately when you join GlobalBanks IQ.
This report includes strategies, suggestions, and banks that specifically cater to offshore companies. Including companies incorporated in jurisdictions like Hong Kong, BVI, Belize, Panama, and more.
Of course, despite the challenges many foreign non-residents face when they apply to open a bank account in Hong Kong, it can still be an option.
So as promised above, if you’re dead set on opening a bank account in Hong Kong, here’s how to get started:
Ready to Open a Bank Account in Hong Kong?
Whether you’re ready to open a bank account in Hong Kong today or you’re just starting to explore your options, we can help.
GlobalBanks IQ gives you everything you need to start finding and opening accounts.
When you join GlobalBanks IQ, you immediately unlock the entire GlobalBanks Database of international banks. It’s home to 250+ banks in 50+ countries.
And, you get access to our library of premium (members-only) reports. These include proven account opening strategies, country-specific banking options, and lists of banks for specific client types.
Plus, you unlock our account opening checklists, dedicated account opening alerts, and much more.