Alternatives to Hong Kong Bank Account
Are you finished with incorporating and registering your business in Hong Kong? If so, now’s the time to apply for a business bank account in Hong Kong. Do you know there are some alternatives besides opening a bank account in the traditional styled banks? These alternatives will help shorten the waiting time in opening a business bank account.
The Hong Kong Monetary Authority has announced a grand total of eight virtual banking licenses this year to offer more handy alternatives for entrepreneurs. With the introduction of these fintech solutions, the business market is maturing.
Opening a Traditional Bank Account in Hong Kong
Opening a bank account is one of the most important tasks to be done when starting a business in Hong Kong. It helps to keep up the business record and add credibility to the company. However, the process for opening a traditional styled business bank is quite lengthy, and the approval rate is also very low.
That’s why several bank options are available in Hong Kong to help business founders start their operations smoothly. As compared to traditional banks, offshore business bank accounts offer various features such as internet banking, cash management services, trade financing, and short-term and long-term business loans.
Challenges when attempting to open bank account in Hong Kong
Trying to set up a corporate bank account in Hong Kong? If so, you should be aware of the many bureaucratic nightmares and challenges you will experience when you walk through the process of opening a traditional bank account in Hong Kong. Though some business founders are lucky and get their application approved by bank officers, many others have to wait for months or face numerous rejections.
If you want to stay on the positive side of opening a bank account in Hong Kong, you should be aware of the common challenges that you will come across when starting the process of opening a traditional bank account. Below are some of the reasons why you may not be approved:
When your Business is not profitable for the bank
This is one of the most important challenges; the difficulty in opening a bank account for your business. Logically, every bank looks for profit from their business activities. Though bank officers cover their personal interest by coming up with a story that your business trading activities are not following the strict risk management policies, this is often just an excuse.
In fact, the Hong Kong Monetary Authority has also accepted that the lack of profitability is the real reason for rejection. That’s why banks usually feel reluctant to follow the expensive due diligence process for a customer, when they’re sure your business will be unprofitable for them.
When you can’t be physically present in Hong Kong
Traditional Hong Kong banks haven’t adopted the rules and procedures of the 21st century with almost everything controlled through one click. However, thousands of entrepreneurs and digital nomads have incorporated an offshore company in Hong Kong, irrespective of their presence in Hong Kong. For instance, running an e-commerce business doesn’t require a traditional style business setup, so it can be run from anywhere in the world.
Some banks may allow business founders to appoint legal representatives in Hong Kong or video conferencing from the local branch. This is not true for all banks and more often impossible. This is the second challenge that you can face while opting for a traditionally styled business bank account.
When you are a Non-Resident of Hong Kong
Though Hong Kong is a cosmopolitan and business-friendly city, there are strict rules and regulations to open a corporate bank account that needs to be followed. If you are a permanent resident of Hong Kong, it would be quite easier for business founders to open a corporate bank account.
On the other hand, if you are a non-resident of Hong Kong or have a different nationality, it would become a complicated task for your business to manage all the financial transactions. Some nationalities are restricted from opening a bank account in Hong Kong.
This is why many banks are reluctant to assist customers or business founders in opening up the Hong Kong corporate bank account. If you want to know, whether you are allowed to open up a corporate bank account in Hong Kong, Check here!
When you have a Complicated Ownership Structure
Banks usually perform the Know-Your-Customer process to check whether the applicant is eligible for opening a corporate bank account in Hong Kong. The process normally involves the verification of business operations and a complete check on the shareholders as well as directors’ profiles. If they find any complication or wrong information in your application, there are more chances of your application rejection.
Let’s say Mittan and Nathan have started a new business with a 50-50 partnership. In this example, the bank officers will find the structure simple and start conducting all the necessary checks. However, some companies are ruled by multiple shareholders. In this situation, the bank will have to check the owners, founders, directors, and shareholders of the company, which makes the process more complicated.
Alternatives to Hong Kong Bank Account
After reading the challenges of opening a corporate bank account in Hong Kong, you should be looking for alternatives to start your business. Because of the challenges and strict regulations, the size of disappointed business owners is growing.
That’s why emerging companies are searching for a quick and straightforward solution to open a business bank account. Here offshore bank accounts can help business founders start their operations smoothly.
Open offshore bank account
If you are struggling to open up a corporate bank account in Hong Kong, you can choose this alternative, an offshore bank account. These offshore bank accounts are opened in a country other than the country where your business is situated. It helps business founders to protect their business from economic and political risks.
It also helps entrepreneurs to control their finances. Startupr, a leading service provider company, also recommends that business founders opt for offshore business bank accounts over traditional corporate bank accounts. Here are some benefits to opening an offshore bank account that you should be aware of:
The advantages & benefits of the international bank account are:
- Online banking for uninterrupted access.
- Credit or Debit Cards supported by different currencies.
- High Approval Rate
- Multilingual Support Team
- Online Process and no need to visit branch in-person
- Bank account with multi-currencies
- International exclusive investment possibilities & discounted payments.
Remember that an international bank account application is generally addressed through the company formation provider. If you choose Startupr as your company secretary, we will help you prepare and submit your application to the bank officers. As we already prepare all the required documents, we will support you in opening a bank account.
We will also introduce your company to the banks and assist you in preparing the application process. The list below are the documents that need to be submitted:
- Company documents
- The business description like the nature of the business, the number of employees, etc.
- Due Diligence documents that include the certified copies of passports of all beneficiaries and their proof of residence.
We will also help you open an offshore bank account in DBS Singapore and ABC Banking.
Open multi-currency bank account (Digital platforms)
The second alternative that entrepreneurs can choose to manage their finances and record their financial transactions is a multi-currency bank account. It is a type of bank account that allows companies to hold, pay, and receive more than one currency.
This bank account’s unique characteristics are that the account details will remain the same for all types of currencies. Therefore, business founders don’t have to change their account credentials such as account number, SWIFT code, and beneficiary name.
Most banks in Hong Kong generally offer multi-currencies accounts. It holds the currencies such as Hong Kong Dollar, US Dollar, Euro, British, Singapore Dollar, Japanese Yen, Australian Dollar, and Chinese Yuan.
Statrys – Digital Payment Platform for Hong Kong Business
If you are searching for a digital platform that can help to manage your business finances in HK, Statrys would be the best choice. This platform focuses on unwinding access to banking solutions and offerings with just a few clicks.
It also offers comprehensive services to small business owners from multi-currency payment facilities, international payment, and direct access to foreign exchange. So, control your business transactions through this digital platform anytime, anywhere.
Startupr Helps You Open a Bank Account for Your HK Business
This article is all about the alternatives for opening a corporate bank account in Hong Kong. You must have clarity for the challenges and restrictions that you may have to face while choosing a corporate bank account.
Whether you think of opening an offshore bank account in DBS Singapore and ABC Banking, or a multi-currency bank account in Statrys, Startupr can help you. We can assist you with the process of opening a bank account for your HK business. Contact us now!