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ACCOUNT OPENING REQUIREMENTS

ACCOUNT OPENING REQUIREMENTS

OPENING A BANK ACCOUNT FOR YOUR NEW COMPANY

Opening a company bank account in 2018 is no longer a simple matter of walking into a bank, signing a form and the account is opened.

The account opening requirements have become increasingly complex over recent years due to changes in Anti-Money Laundering regulations… it is hence important to take the time to understand these requirements to ensure you are properly prepared before submitting your account opening application to the banks.

Our below guide provides an overview of the Anti-Money Laundering regulations applicable to opening a company bank account and an outline of the information and documents you should expect to provide to the banks when applying to open an account for your new company.

 

ANTI-MONEY LAUNDERING REGULATIONS

All banks are required to comply with international Anti-Money Laundering regulations when opening new company accounts which require the banks to:

  • verify the identity of the company’s owners and directors and obtain proof of their residential address.
  • meet or arrange a videoconference interview with the company’s owners and directors to gain an understanding of the intended business activity of their client’s Hong Kong company.
  • conduct a business background review to ensure the company’s owners and directors business experience is directly relevant to the intended business activity of the new company.

The objective of the regulations is to ensure banks avoid providing banking services to criminal or terrorist organisations.

 

HOW TO ILLUSTRATE YOUR INTENDED BUSINESS ACTIVITY TO THE BANK

You will need to prepare a brief presentation for the bank that will clearly illustrate the intended business activity of your new Hong Kong company including:

  • details of the products or services to be provided by your new company preferably supported by a website or a brochure to illustrate the product or service.
  • an estimate of your new company’s annual turnover, an estimate of the average transaction value and an estimate of the frequency of transactions.
  • details of the target market for your new company’s products or services including disclosing the countries where major customers are located.
  • details of any contracts or orders secured or under negotiation including relevant supporting documentation.
  • details of where your new company will source it’s products if your new company is a trading company.
  • details of how your new company will operate including disclosure of who will manage the day to day operations of the company and disclosure of the address from where your new company will operate.

It is important to understand the bank has no prior knowledge of your company and your presentation hence needs to provide sufficient information to ensure the bank can properly understand the intended business activity of your new company.

 

BUSINESS BACKGROUND REVIEW

All banks will conduct a business background review to verify your business experience is directly relevant to the intended activity of your new Hong Kong company as this is considered an essential requirement in the prevention of money laundering.

The information you will need to provide to the bank will depend on whether you are an overseas resident or a Hong Kong resident and whether you own an existing business or whether your business experience has been gained from employment:

If you are an overseas resident and own an existing business in your country of residence you will need to provide the bank with:

  • the name of your existing overseas company.
  • a copy of a company search or equivalent documents from the relevant government authority in your country of residence showing the current ownership of your overseas company.
  • the website address of your overseas company or a copy of a brochure.
  • a copy of invoices or contracts to support a recent transaction undertaken by the overseas company in order the bank can verify the activity of the overseas company. Ideally the invoices or contracts will be between the overseas company and a company located in Hong Kong or China.

If you are an overseas resident and your business experience has been gained from employment the banks will usually require that you have a minimum of 5 years relevant business experience before they will open an account for your new company. You will need to provide the bank with:

  • a copy of your CV.
  • a copy of your most recent contract of employment or a copy of a recent payslip so the bank can verify your employment as shown on your CV.
  • a copy of any relevant professional or technical qualifications.

If you are a Hong Kong resident and own an existing business you will need to provide the bank with:

  • the name of your existing Hong Kong company.
  • the website address of your existing Hong Kong company or a copy of a brochure.

If you are a Hong Kong resident and your business experience has been gained from employment you will need to provide the bank with:

  • a copy of your CV.
  • a copy of your most recent contract of employment or a copy of a recent payslip so the bank can verify your employment as shown on your CV.
  • a copy of any relevant professional or technical qualifications.

In all cases to assist the bank with their background review we suggest you provide the bank with a reference letter from your existing banker detailing the length of banking relationship and stating the relationship has been maintained in good order.

OPENING AN ACCOUNT WITH A BANK IN HONG KONG

It should be noted the Hong Kong Monetary Authority requires all banks operating in Hong Kong to conduct account opening meetings in Hong Kong.

It should also be noted the banks in Hong Kong will usually only open accounts where it can be shown the new company will be selling to or buying from companies in Asia (and preferably China) or holding investments in Asia.

We take the opportunity to refer you to our guide to the process to open a bank account in Hong Kong.

 

OPENING AN ACCOUNT WITH AN OFFSHORE BANK

In cases where a client’s Hong Kong company will have no business activity in Asia we usually suggest that the company open an account with an offshore bank and we would be pleased to provide further details based on your planned activities.

In most cases accounts can be opened with an offshore bank without the need for clients to visit the bank hence this is a perfect solution for international clients as they can incorporate a Hong Kong company and open a bank account without the need to travel to Hong Kong.

We take the opportunity to refer you to our guide to the process to open a bank account in an offshore bank.

 

NEED MORE INFORMATION ABOUT OPENING BANK ACCOUNTS?

Contact us via email at info@acshk.com to learn more about opening bank accounts.