Jens Krämer

Opening a Bank Account in Hong Kong

 |  banking, hong kong, offshore, business  |  6 comments

This is the sequel to my post about how I set up my Hong Kong Limited.

I am writing the first draft for this post in Hong Kong, where I just picked up my debit card, internet banking credentials and security device from the Bridges office in Central. In the end, getting a bank account here was easier than expected.

While you can create a Hong Kong Limited without ever setting foot in Hong Kong, for opening up a bank account you have to meet with a representative of the bank (I chose HSBC, but others have the same requirement) in person. It’s being said that nowadays it has become hard for somebody without a gazillion of dollars to set up a private banking account in Hong Kong. In contrast to that, a business account even for a small Hong Kong Limited is definitely possible. It just requires a bit of preparation. Bridges (the agency I used for company formation) offers to set up a meeting with a bank representative in their office as part of their company formation package, and while they naturally cannot guarantee success they do their best to help you come prepared.

The relevant pieces of documentation to bring for the meeting with the banker are:

Basically this all serves the purpose to help the bank avoid being sued or threatened otherwise by greedy countries for helping people to evade taxes or launder ‘dirty’ money. So no problem as we earn our money with real work and have nothing to hide, right? Yeah. There’s two basic questions you should be able to answer in a plausible way:

Where do you live?

Simple question, except if you enjoy a nomadic lifestyle. At the very least you should be able to provide proof of residency somewhere through bank statements, utility bills or similar.

Apparently a western european address makes things a little bit easier, so if you still have access to one (i.e. through bank accounts back in your home country), this is the way to go.

Where Does That Money Come From, and Where Will It Go?

With the address question out of the way, we talked about my business, what exactly I’m doing and who my clients are, and what will happen to the money that I earn. Now for me this was really easy to answer because I was basically just moving an existing business to Hong Kong.

I had prepared a one-page summary of what I do, showed my last personal german tax statement and some yearly income/expense overviews from my tax consultant, talked about who my clients are and where they are located, explained in detail what I’m doing, and while I did that the man sitting across from me already started filling out the forms.

Five or so signatures later he handed me some brochures and carefully explained which hotline to call in case the internet banking refuses to work because I’m trying to use it during unusual hours (i.e. from within a different time zone). At this point I was already pretty sure that all went well.

We agreed that HSBC would send any documents, the debit card and security device to my company address, where I could pick them up or (at least in theory, see below) have Bridges forward them to me.

I handed over a cheque over HKD 1.1501 for the account opening fee, shake hands, done.

Two weeks later…

Actually one week later I received two emails from HSBC, one about online banking being activated, the other telling me the bank account was opened. A few days after that several letters from the bank had arrived in my company’s mailbox at Bridges, waiting to be forwarded to me.

So why am I in Hong Kong again now?

Because of this little “security device”, which is battery powered and therefore will only be delivered by couriers as “dangerous goods”, which, besides being expensive, might easily lead to my shipment end up in Philippine customs. This is a thing I wanted to avoid even at the price of another day trip to Hong Kong, so here I am, enjoying the (compared to sticky Quezon City) cool weather.

A few words about the HSBC business banking account itself:

It’s called Business Integrated Account and is a combination of a HKD current account and a savings account that can hold ten or so different currencies. The account comes with a debit card that should work on HSBC ATMs around the world (don’t forget to set the limit for abroad transactions for the card online because this is zero by default). I also inquired about a credit card which, according to my HSBC contact, would not be a problem after a couple of months, given I have a certain minimum average amount (we spoke about HKD 50,000 which would then also be the limit for the card) in the bank. For the time being I should be able to get cash with the debit card at any HSBC ATM. HKD 50,000 is also the minimum balance for keeping the account free of charge, otherwise a small monthly fee of HKD 100 is charged.

I can say that, while ugly, the HSBC internet banking does work as expected and receiving funds from Germany takes less than two days (which is quite amazing, none of my wire transfers from Germany to the Philippines took less than 4 days). Due to the multi currency feature of the account any incoming funds stay in their original currency (as long as its one of the supported currencies) until I decide to exchange them to any other currency the account can hold.

Have questions or your own offshore business experience to share? Tell me in the comments!

And, in case you missed it in the last post - you can get HKD 500 off of your own company formation at Bridges if you make contact through me or mention I (Jens Kraemer / Electric Things Limited) sent you when contacting them directly. Full disclosure: I’ll get HKD 500, too :)

  1. Bridges can issue the cheque for you for a fee of HKD 300, just let them know and bring HKD 1.450 in cash.

Comments

Magnus

Hey Jens. Thanks for the info. I am also a German guy who also abandoned Germany and moved to Asia but kept a few personal bank accounts he had opened there. I also worked with Alex from bridges to set up the company in HK but did so before I found this post. So your info gives me a very adequate overview of what to expect when opening a bank account.

I am in e-commerce (Amazon FBA), so I buy goods from Chinese suppliers and manufacturers and sell them in the European market to consumers.

I asked bridges to postpone the account opening process to a later date, when my business can show profitability. I was scared by all the horror stories about being rejected. I thought that, as my German direct bank was ok with it, I could continue using my personal account for my first business expenses and then get to HSBC when i have something to show off.

Little did I know that Chinese suppliers would not want to receive my money from a personal account as it, apparently, makes it impossible to ship the goods FOB. They claim that when receiving the money from a personal bank account they also can't make use of a certain tax reduction that is applied when the goods are exported.

So now I am in urge to get a business account. And I googled and found this.

What do you refer to when describing HSBC's online banking as old? Compared to what expectation? What did you use previously?

You write that it is a HKD current account and a multi currency savings account. I need this account to pay Chinese manufacturers in China in Chinese Renminbi cheaply and quickly, so I assume that I need a multi currency "current" account. Can the Business Integrated Account be the right thing for me?

And finally: Couldn't the girls at Brigdes take the battery out from that TAN generator and send it as normal mail? :)

Jens

Magnus,

HSBC Hong Kong's Business internet banking just looks a bit old fashioned and has some layout problems in Firefox but has always worked for me. I've been using several german banks before and their UI generally was a bit better / modern. In the end you have to work with what your bank offers. I had some problems initially guessing what info goes where in the money transfer form but that's often a problem with international payments. Their support was helpful and with a response time of around a day not too slow.

I think the Business Integrated Account will work for you. I'm also sure the Bank's representative will suggest otherwise during your appointment if this is not the case. If you have a valid business then you shouldn't be too worried about being rejected as well.

Regarding the battery - I don't think this can be removed without causing damage to the device. Hope it'll last a while ;)

Much success with your business!

Amed Ibrhim

Hi Jens , It was nice to read your article and a bit motivating. I've disappointed by reading lots of horrific stuff about tightening and strict new rules for opening bank accounts , yet much more they reject many cases . However , there is a blink of hope about it ... your story is a proof but I'm still wondering :- 1-what is exactly the real requirements for non residence to open personal account ? should all documents be provided in English ?

2-Does it go for the same steps as yourself ? ( why you open acc,who you deal with , ....etc )

3- Many of my customers from ( Europe ,Africa , Middle east ) pay me through online banking or directly through their visa card , so do you think that would be problem for the banks to open personal account?

4- Do you think it will be helpful if I show them one of my overseas bank statements and atm cards?

5- Also would it be helpful to bring family local bank statement (father bank statement ) because no longer live in the family country ?

Again Thank you very much for motivative article and for your help in advance .

Wishing you all the best !!

Jens

Amed, from what I heard there is a huge difference between business and personal bank accounts, the latter being much harder to open especially in Hong Kong.

I don't have a personal bank account in Hong Kong so I can't tell the exact requirements, but for sure you'll need some proof of address, your passport and you should be able to explain where the money comes from and why you need a Hong Kong bank account. Proof of existing relationships with other banks and of your financial situation might also be useful. I'd suggest to contact a few banks and just ask. And yes, I think any documentation should be in English.

Since you write that clients will be paying you to that account - why don't you simply form a company in Hong Kong (maybe a subsidy of any existing business you have) and get a business account?

If you haven't already, I'd also suggest you check out bankaccounts.io. freedomsurfer.com also has two articles about the "best" and "easiest" banks in the world. I'm in no way affiliated with these sites but found them quite interesting.

Simon

Hi Jens,

very interesting post, thanks! I'm selling apps worldwide and get paid mainly by Apple and Google. I'm planning to form a company in Hong Kong. Since it seems so hard to open a business account nowadays. Is there any problem in having a company in Hong Kong and use a personal bank account for it? This would make the matter for me much easier!

Thanks, Simon

Jens

Simon, I don't think there will be a problem on the Hong Kong side of things, but your bank might probably object. All banks I had to do with until now have a separate line of products for businesses and don't like to have their personal bank accounts being used for business purposes.

Also keep in mind that any payments to your account will have to be under the account owner's name (that would be your name and not your company name), which may lead to confusion with clients (but may work with Apple / Google who most probably don't care).

I'd suggest to try and get a business account in Hong Kong first, if that doesn't work, try to get a business account elsewhere, and really only use a personal account as a last resort.

Much success with your business!

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