International trade is a cornerstone of Hong Kong’s economy, and means every year many expats arrive in the city to work - or set up businesses. Famed as a gateway to Asia, Hong Kong is a perfect destination if you want to grow your company or career.
If you’re arriving in Hong Kong as an entrepreneur or business owner, you may need to get a local business bank account to manage your company finances. This guide covers all the basics you need to know about opening a business bank account in Hong Kong.
We’ll also look at smart ways to make international money transfers using Wise, so you can pay your international suppliers and staff without needing to worry about high fees and currency exchange charges.
Firstly let’s take a look at the normal company structures you see in Hong Kong. You’ll likely need to set up your business using one of the following company entities:
- Limited liability company
- Sole proprietorship
- Foreign company office - branch office, representative office or subsidiary
The type of business structure you have, as well as the turnover and nature of the work you do, is likely to impact the business bank account options available.
There’s no legal reason why you can’t open a business bank account in Hong Kong with a foreign registered company. However, different banks may set their own eligibility requirements and limits on the account products they offer. Some banks are reluctant to offer accounts to overseas companies because of strict anti-fraud laws - so you’ll need to check the options available to you with your chosen bank.
You’ll almost certainly need to visit your bank in person to open a business bank account. All of the key stakeholders in the business are likely to need to attend a meeting to present paperwork, and discuss the specifics of your business, as well as your banking requirements. That could mean all directors and shareholders - as well as the owners - getting to Hong Kong for a face to face meeting, a time consuming prospect.
The most common alternative to this is to choose an international banking brand which has branches around the world. Global institutions may have the option to allow the company stakeholders to attend meetings in person at branches local to them, instead of in Hong Kong. Paperwork can then be sorted out and signed with a witness during these local meetings instead of in Hong Kong.
Many agencies exist to guide foreign business owners through the process of setting up a business entity and business bank account in Hong Kong. Having local professional help may ultimately save time and money, and avoid unnecessary delays in getting your business bank account sorted out.
Which documents/requirements are necessary (for a foreigner) who wants to open a business bank account?
Because of stringent financial regulations, banks will require a significant amount of paperwork to get your business account up and running. Each individual bank has its own process - but the documents needed typically include¹:
- Board resolution showing the intention to open a business bank account
- Certificates of incorporation and registration, as well as a copy of the Articles of Association
- Personal details of all directors and any shareholder with over a 10% stake
- Proof of identity and address for all directors, shareholders, signatories and beneficial owners of the business
- Sample signatures for all of the above
- Business plan and organisational chart
It is possible to open a business bank account without holding Hong Kong residency. You’ll need to first check the terms of the account you‘ve selected - some allow you to provide your passport instead of a Hong Kong identity card when setting up a business account. You might also need to present additional documents to support your application - check the full requirements before you attend the branch.
It is not usually possible to open a business bank account online in Hong Kong. You might find that your bank allows you to start the application process online, but you’ll still usually be expected to attend a meeting in person to show your paperwork and give signature samples.
Make sure you scrutinise the terms, conditions and bank fees for the products you’re interested in. You might find that the charges are different to the business bank account you hold in your home country. Here are a few common costs to look out for.
When you first arrive in Hong Kong you might need to use the bank or corporate card linked to your home business bank account to make ATM withdrawals and payments. Check the terms and conditions of your specific account to review the costs of these services - you’ll likely pay a fee for overseas transactions and a percentage charge for currency conversion which can quickly mount up.
Once your Hong Kong business account is up and running you’ll be able to use your local bank or corporate card for ATM withdrawals and spending. Most banks allow customers free ATM withdrawals from their own ATM network - and may also be part of a network of ATMs which allow free or cheap transactions. If you’re using ATMs from outside your own bank’s network you’ll usually pay a fee of around HK$15 - HK$25, with international ATM use coming in at HK$20 - HK$40, plus conversion fees².
You’ll also need to review other regular fees, or charges per transaction. Here are a few to consider²:
- Monthly service charges - these may be up to HK$200 - HK$450 depending on the account type
- Corporate credit card issuance and replacement card fees - a corporate card may cost HK$550/year per cardholder
- Counter transaction fees - depositing or withdrawing in a branch could cost around HK$10 a time
- Overdraft fees
- Transfer charges - in and out of your account
- Early closure fees
- Inactive account fees - can be up to HK$450
If you work with customers, suppliers or team members around the world, you’ll likely need to make international business payments on a regular basis. This can quickly become expensive thanks to high bank fees and exchange rate markups.
Before you choose a bank account for your business, take a look at the fees to send and receive international payments. You’ll normally find fees to receive international payments which may be HK$65 or more. Sending international transfers will usually cost HK$100 - HK$115 when arranged online, with significantly higher fees of around HK$260 for in-branch services².
When you’re sending a payment overseas, you’ll also need to check out the exchange rate being offered. Compare the rate your bank gives you against the mid-market exchange rate to check if there is an additional fee to be found here.
It’s common practise for banks and money transfer services to add an extra fee into the exchange rate offered for international payments - but this makes it harder to see exactly what you’re paying, and increases the overall costs. You may be able to get cheaper international transfers, which use the mid-market exchange rate, by choosing a third party specialist provider instead of your regular bank.
Sending money overseas doesn’t need to be complex - or expensive. Check out how the fees and exchange rates used by Wise stack up against your regular bank.
Wise payments use the mid-market exchange rate with no markup. That means there are no hidden fees to worry about, and you’ll see exactly what your recipient is getting before you confirm the transfer. You just pay a simple transparent charge per transaction, for secure, fast payments all over the world.
Getting a business bank account is likely to be a priority if you’ve arrived in Hong Kong as an entrepreneur or business owner. There are lots of options out there - even if you’re a non-resident or have a company registered outside of Hong Kong. However, the processes for getting your account open may take some time, and are likely to mean you need to head to the bank in person to present your paperwork.
Do some research in advance to find the right business bank account for your needs - and don’t forget to check out the cheap, fast and secure international payments from Wise to see if you can save.
Sources used in the article:
Guide me Hong Kong - Opening a corporate bank account in HK
HSBC - Compare Accounts, Pages 10, 11 and 15 - CMB Tariff, Page 13 - Sprint Account.
Sources last checked on 13-October 2020.
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This guide walks through the business account options available with HSBC HK, including the key costs to consider when you’re thinking of opening one. Check it!