Hong Kong company bank accounts for foreign Directors and foreign Shareholders

Find out if your Hong Kong company qualifies for a bank account

We have put together a simple questionnaire that banks use as a preliminary screening tool. Check if your company would be eligible to open a bank account and which bank you would have the highest chance of success with.

Find out which bank to apply with

Can Hong Kong companies with foreign directors and shareholders open bank accounts in Hong Kong?

It has become increasingly difficult for Hong Kong companies with foreign shareholders and directors to open a bank account for their business. We have helped hundreds of clients setup Hong Kong companies, and every client will have concerns about whether they will be able to open a bank account. While it is true that it is more difficult for foreign owned Hong Kong companies to open a bank account, there are strategies to increase the likelihood of success.

This article will explain:

• the types of bank accounts commonly used by Hong Kong companies
• the reasons why banks in Hong Kong are turning away foreign customers
• the application process for opening a bank account for your company
• our advice on how foreign owned Hong Kong companies should apply for bank accounts

Different Types of Bank Accounts Commonly Used by Hong Kong Companies

Online Neobanks or Virtual banks

In 2019, Hong Kong issued virtual banking licenses to 8 virtual banks: Airstar Bank, ANT Bank, Fusion Bank, Livi Bank, Mox Bank, Ping An OneConnect Bank, WeLab Bank, and ZA Bank. Since then, these banks have onboarded over 2 million users. However, in 2023, these banks reported that over 55% of their accounts are dormant. Neobanks are only an option for companies with local Hong Kong resident directors and shareholders, as their eligibility process often requires a Hong Kong Identity Card.

Traditional Major Banks

These are the well-known international banks that have been a cornerstone of Hong Kong’s robust financial system, such as: HSBC, Bank of China, Hang Seng Bank, Standard Chartered Bank.

These are still preferred amongst the Hong Kong business community, as these bank’s willingness to do business with your company can be seen as a vote of confidence in the legitimacy of your business.

Virtual Bank Accounts offered by Major Banks

To compete with the Neobanks, the major banks have begun offering virtual bank accounts that offer similar features as the Neobanks, but with the trusted name of a major bank. Users of these virtual accounts will still have access to most of the features that a small business will need.

Offshore Bank Accounts

In the last few years, as the business community complained about the difficulties of opening bank accounts, offshore banks licensed in jurisdictions with relaxed compliance regulations saw this as a business opportunity to offer Hong Kong companies bank accounts. These banks are licensed in jurisdictions such as Puerto Rico, the Cayman Islands, Seychelles. However, the use of these bank accounts will often raise scrutiny amongst customers and suppliers.

Online Payment Platforms

Over the last 3 years, the use of online payment platforms by businesses in Hong Kong and Asia have risen dramatically. Online payment platforms are services that allow businesses to receive, remit, and hold funds. Most of these services will hold a Money Service Operator license instead of a banking license. The most notable of these platforms is Currenxie and AirWallex.

Why has it become so difficult for foreign owned Hong Kong companies to open a bank account?

Geopolitical tensions:

Geopolitical tensions have caused banks in Hong Kong to change course in the last few years. The banks have slowed expansion plans to become more selective of the clients they choose to onboard. International banks are under pressure from shareholders and regulators to steer clear of clients from countries facing heightened political or economic instability. This has made it difficult for companies with ultimate beneficial owners and directors from these countries to open bank accounts.

AML (Anti-money laundering) and KYC (know your customer)

Large banks have significantly increased the level of scrutiny of their AML and KYC procedures. High-profile money laundering schemes have pushed regulators to impose heavier fines on banks that fail to uphold AML and KYC standards. This high level of scrutiny has made it difficult for Hong Kong businesses to open bank accounts if the business nature is considered high risk by the banks.

Compliance costs vs. maximising shareholder value

As profit generating businesses, large banks need to maximize shareholder value and generate returns. In order to do this, banks need to consider whether onboarding a new client will be profitable. If the costs of enhanced due diligence and extra compliance outweigh the profits generated by onboarding a client, the bank will likely turn that customer away. This is why larger businesses with substantial deposits will have a much better chance of successfully opening a bank account than a small unprofitable startup.

Industry and business nature

Banks consider the industry and business nature of potential clients and have assigned risk levels to each type of business. Businesses involved in cryptocurrency, precious metals, trading of commodities, are all considered high risk by the banks. The higher risk profile will require the banks to carry out extensive AML and KYC procedures.

The application process for foreign owned Hong Kong companies to open a bank account

The application process at a major bank typically takes 4 to 6 weeks. However, a good relationship manager will provide clear feedback on the likelihood of a success bank account opening even at the early stages of the application process.

Our advice: the best way for foreign owned Hong Kong companies to open a bank account

Although it is more difficult to open a bank account for foreign owned Hong Kong companies, there are methods to improve your chances of success.

Prioritise the right banks:

The most important factor when it comes to opening a bank account is to approach the right banks. Different banks will cater to clients of different nationalities and industries, therefore, to improve your chance of successfully opening a bank account, prioritizing the right banks is vital.

Apply with more than one bank:

There is no harm in trying more than one bank, especially because most banks ask for the same information and supporting documents.

Pick the right CPA to help open your company bank account:

Bank account opening services are one of the common services CPA firms and accounting firms offer, however, it is important to pick the right firm. When choosing a CPA for bank account opening services, these are the questions you should ask:

• Which banks do you have relationships with?
• Which bank is suitable for my nationality and business nature?
• Do you charge upfront or contingent fees?

Be careful of CPAs that charge upfront fees for bank account opening services, as the success of a bank account opening cannot be guaranteed. Our CPA firm does not charge any fees for bank account openings. We are more than happy to assist our clients with opening a bank account to build a long term relationship. Contact us here or email us at: info@yauandwong.com

Which bank should I try to open a bank account at:

Factors such as your nationality, resident status, and business nature will affect which bank you should choose.

Use our questionnaire to determine which bank is right for your Hong Kong company.

2 Minute Assessment