March 13th, 2023 by Vivian AuOpening a bank account for your business is on top of your to-do list as soon as you register your business in Hong Kong.
Having a separate Hong Kong business account is necessary for most business structures and you cannot substitute your personal account for it.
But which bank is the best for opening a business account in Hong Kong? How do you distinguish between personal and business accounts? And can you open a corporate bank account elsewhere apart from a regular bank?
This guide tells you everything you need to know.
Difference between business accounts and personal accounts
The primary use of a business bank account is to help business owners hold and manage money that the business makes.
This includes paying various suppliers and employees, making tax payments, and receiving payments from customers.
There are various types of business accounts, such as:
- Business checking account
- Business savings account
- Certificates of deposits account; and
- Foreign currency accounts
On the other hand, personal accounts are meant for managing personal funds. You can use it for paying for any type of personal expense.
Why do you need a company bank account in Hong Kong?
Opting for a business account in Hong Kong has several advantages:
- A business bank account lends credibility to your business. This is especially important when you are just starting in a new country.
Having a separate account means your customers and clients can directly pay your business instead of routing the funds to your personal account. This makes your business appear more professional. - Business bank accounts offer tax benefits. The account holder doesn’t have to pay any tax on the earnings.
- Most banks in Hong Kong allow you to open a multi-currency bank account that makes it convenient to hold, send and receive various currencies from one account.
- Since there are no capital control laws in Hong Kong, you can freely transfer the deposits from your business account to accounts elsewhere in the world.
- Having a distinct business bank account offers protection to your business assets. In case your business fails to repay its debts, the assets in your personal account remain untouched.
- A separate bank account for your business makes it convenient to track expenses, keep an eye on your spending and avoid unnecessary expenditures.
Top 5 business bank accounts in Hong Kong
Choosing a company bank account in Hong Kong can be a task given that it is home to an extremely sophisticated banking and finance sector.
Here’s a roundup of the top 5 options you can consider:
1. Standard Chartered
Headquartered in London, Standard Chartered is a key player in the business banking services sector of Hong Kong.
Type of account offered:
It offers two types of corporate bank accounts: business and priority banking.
Both accounts support 11 major currencies.
Who can open an account?
To open a business bank account with Standard Chartered in Hong Kong, you should be one of the following:
- Sole proprietorship
- Partnership
- Limited company; or
- Owners incorporation
You are ineligible to open an account if your business is incorporated in a sanctioned country or operates in a prohibited sector.
How long does it take to open an account?
Can take several weeks to months
Minimum deposit requirements:
Nil
Account opening fees:
HKD 5,000
Currency conversion fees:
For receiving payments via telegraphic transfer, the fee is HKD 55. For outward telegraphic transfers, the fee is HKD 200.
2. DBS Bank
Headquartered in Singapore and the recipient of Hong Kong’s best international bank in 2022, DBS Bank is a top choice for businesses in the region.
Type of account offered:
It offers three types of business accounts :
- Business Entrepreneur
- Business Edge; and
- Business Edge Preferred
All accounts support 14 major currencies.
Who can open an account?
Any limited liability company, partnership, or sole proprietorship business that’s incorporated and registered in Hong Kong can open an account. However, the business shouldn’t have any corporate directors or partners.
How long does it take to open an account?
Within 2 to 3 working days
Minimum deposit requirements:
HKD 10,000 but no deposit fees for the first three months.
Account opening fees:
HKD 1200
Currency conversion fees
No fees if you use DBS Remit, an online overseas transfer service from the bank.
Otherwise, you need to bear correspondent bank charges plus handling and cable charges of DBS Bank.
3. Statrys
A virtual Hong Kong business account is an excellent alternative, especially if you are looking for more features and perks compared to what traditional banks offer.
And a fintech such as Statrys fits the bill perfectly. It also supports the remote application process and you can complete all formalities online.
Type of account offered:
Multi-currency business account
Who can open an account?
Any company registered in Hong Kong.
How long does it take to open an account?
Usually, less than 3 days
Minimum deposit requirements:
Nil
Account opening fees:
Nil
Currency conversion fees
For sending payments, the fee is HKD 75.
For receiving payments, the fee is HKD 55.
4.HSBC
As the largest bank in Hong Kong, HSBC is a good option for opening a business bank account. The HSBC business banking division has offerings for businesses in various stages of growth.
Type of account offered:
You can choose from three types of business bank accounts, namely HSBC Sprint, HSBC Business Direct, and HSBC BusinessVantage.
HSBC Sprint account is perfect for newly set up startups whereas Business Direct is more appropriate for growing SMEs.
For SMEs that have been around for a while, HSBC Business Vantage is a better choice.
Who can open an account?
HSBC allows all limited companies, partnerships, or sole proprietorships registered in Hong Kong and carrying out business operations in Hong Kong to open an account.
However, the business should not have any corporate directors or shareholders. But they should have up to 2 individual directors or authorized signatories.
How long does it take to open an account?
Within 3 days
Minimum deposit requirements:
- Average account balance of HKD 50,000 for HSBC Sprint and HSBC Business Direct account
- Average account balance of HKD 100,000 for HSBC Business Vantage
Account opening fees:
The fees vary depending on the type of business account you wish to open.
Typically, applicants need to pay HKD1,300 as account application fees.
The bank also levies additional fees for inactivity or account closure.
Currency conversion fees
You need to pay additional fees for any currency conversion.
It is usually HKD 65 for receiving payments and HKD 120 for sending payments to any other bank across the globe excluding HSBC bank in Mainland China.
5.Hang Seng
Hang Seng bank, partly owned by the HSBC group, is the second-largest retail bank in Hong Kong.
Type of account offered:
The bank offers two types of business accounts, depending on the type of business entity applying. These are:
- Biz Virtual+ account for startups; and
- Integrated Business Solutions account for established SMEs
Who can open an account?
The applicant can be an incorporated sole proprietorship, partnership, or limited company.
The applicant should not have any corporate shareholders and must meet the annual sales turnover requirement of the bank. The individual directors and authorized signers should hold HKID.
How long does it take to open an account?
Biz Virtual+ account: 3 business days
Integrated Business Solutions account: 5 business days
Minimum deposit requirements:
HKD 50,000 equivalent or above
Account opening fees:
The fees vary based on the type of business account you open.
Typically, for opening Biz Virtual+ account, applicants need to pay HKD 600 if they do it remotely and HKD 1200 if they do it in person.
For Integrated Business Solutions account, the fee is HKD 1200 for both remote and in-person applications.
Currency conversion fees
Charged based on the amount sent or received.
Bottom Line
Having a business bank account is the mark of a real business.
Deciding on which business account is best for your business depends on what you are looking for. Get a thorough understanding of your requirements before you shortlist an option.
To get a complete picture, also calculate the fees you would be paying for every cross-border payment.
If you want to avoid the complicated account opening process of banks, consider a fintech that offers a virtual account.
Get in touch with Air Corporate to set up a remote Hong Kong business account.
FAQs
What documents do I need for opening a business bank account in Hong Kong?
Every bank follows its unique account opening process and the relevant documents for account opening may vary. Typically, they request the following documents:
- Documents that prove your business is legally registered in Hong Kong such as your Business Registration Certificate or a Certificate of Incorporation
- Identity and address proof directors and signatories; and
- Documents that show business activity, such as a business plan
Can I open a Hong Kong business account remotely from abroad?
Every Hong Kong bank follows a strict procedure for account opening.
While you may be able to submit the documents online, you may still need to go in person to a branch to complete the formalities.
Only a fintech providing virtual business accounts in Hong Kong allows you to complete the entire process online from a remote location.
What is common between opening a bank account, applying for a new mobile phone connection, and signing up for an insurance policy anywhere in the world? You can successfully complete these activities only when you furnish proof of address along with your application form.
The situation is no different in Singapore — whether you want to live in Singapore for work or to study, you need local address proof for opening a bank account or applying for a utility. Even if you intend to carry on business in Singapore, a Singapore business address is a must to comply with the regulatory requirements.
So how do you go about gathering acceptable forms of address proof? Here’s a guide explaining what is an address proof document and what documents can you furnish in Singapore as proof of residence.
What is proof of address and why do you need it?
Proof of address is exactly what it sounds like — it refers to documentary evidence that shows you reside in a particular country.
Both public and private organizations, including government agencies, require this information when you fill up any official forms and use it as a safeguard against any fraudulent activity.
Moreover, it also helps to identify whether the applicant resides in a country with extensive sanctions. For example, the Office of Foreign Assets Control (OFAC) of the US Treasury Department maintains a list of sanctioned countries and prohibits any financial transactions with such counties without prior permission.
While it is impossible to create a comprehensive list of acceptable documents one can use to provide proof of residence, as a thumb rule, most organizations request documents that cannot be falsified easily or obtained dishonestly.
Why do banks need proof of residence?
In the case of banks across the globe, proof of address forms part of the ‘know your customer’ (KYC) documents.
Over the years, the incidents of applicants submitting fake documents to open accounts have shot through the roof. Typically, account holders carry out illegal activities through them. So when you open a bank account, banks have a legal obligation to ask for all KYC documents to verify that you don’t intend to open an account for carrying out any illegal activity such as money laundering or financing terrorism.
In other words, banks need to verify that you are really who you say you are. Documents such as address proof and ID proof make it easier to conduct this check.
Depending on the jurisdiction they operate in, each bank has a list of documents that are acceptable as proof of address. But what may work as proof of address in one country may not work in another. Even the KYC processes followed by different banks in the same country vary.
That’s why it is important to understand what qualifies as proof of residence in a particular country where you need to furnish it.
How to obtain proof of address in Singapore?
Proof of address in Singapore is your residential address within Singapore.
The document for residence proof in Singapore should have your full name and the address where you are currently residing. To get proof of address, you can contact the relevant organization, depending on the type of document you want.
For instance, if you want to furnish your utility bill as proof of address, you can apply for a physical copy of the bill from the relevant utility company. But ensure it is a recent bill, preferably issued within the past 3 to 6 months.
Usually, the organization you are applying to provides detailed instructions on how to go about the process. So if you live where you claim to live, it is relatively painless to obtain proof of residence.
What are acceptable documents for proof of address in Singapore?
Here are a few documents that are usually acceptable as address-proof documents by most organizations in Singapore:
- NRIC card of Singapore residents or Permanent Residents
- Utility bills, no older than 3 months (some organizations may accept utility bills that are no older than 6 months)
- Credit card statement or bank statement
- Letter issued by your employer or the institution where you are studying
- Letters issued by the Central Provident Fund Board & Inland Revenue Authority of Singapore, preferably within the last 1 year
- Letter from a public authority such as a court
- A valid passport with an address verified by the Immigration Authority
- Letters or bills from other government agencies such as Land Transport Authority or Town Council, if issued within a certain time frame
- Tenancy agreement bearing signatures of both landlord and tenant and no older than 1 year
- A mortgage agreement that’s no older than 1 year
Make sure to confirm with the relevant organization whether a particular document will work as proof of address. Also, keep in mind that acceptable documents may also vary depending on whether you are filing a form or applying for something online or in-person.
Do businesses need a separate proof of a Singapore business address?
The business address refers to the place from where you carry out your business. If your business is a sole proprietorship or if you have business partners, your home address can serve as your Singapore business address.
This is different from a registered office address which refers to the place where a company’s registers and records are available and communications and notices to the company can be sent/received.
As per the Accounting and Corporate Regulatory Authority of Singapore, at the time of registration of a new business in Singapore, it is mandatory to provide the home address of all business owners and company officers by furnishing any of the acceptable documents for proof of address.
Please note that a P.O. Box address cannot serve as a Singapore business address or registered office address. If you are setting up a local company, you need a lease a physical office space.
What documents are not acceptable as proof of address in Singapore?
Typically, most organizations are reluctant to accept the following as proof of address, especially if they are furnished alone without any supporting document:
- Any identity card issued by any organization without any supporting document
- A commercial address
- A proof of address that is past its validity period, as indicated by the organization providing it
- Invoices for purchasing any goods
- Pension agreements
- Any document that indicates your residence at a different address
- A library card issued by your university or college
- Driver’s license
- Photocopies or printouts of certain documents
What documents can a foreigner provide to prove residency in Singapore for opening a bank account?
Banks in Singapore require every applicant to mandatorily furnish documents that include their current residential address to process their account opening application.
If you are not a Singapore national or a Permanent Resident, here are a few documents you can furnish to satisfy the bank’s requirements:
- Letter from your employer or the institution where you study
- Ministry of Manpower’s In-Principle Approval issued to migrant workers
- Certificate of stamp duty
- Local utility bills
If you are a foreign business that wants to set up a subsidiary in Singapore, any document that is acceptable as address proof of your local director can help you to open a corporate business account with a local bank.
What happens once you submit the address proof document?
The verification process starts once you furnish an acceptable document. The exact procedure varies depending on the entity to which you submit a document.
Most banks may initiate an automatic check to verify whether you reside at the address provided. It includes confirming the name on the document and determining whether the address in the document actually exists.
If you provide a document that is only valid for a specific time frame, the bank may also confirm whether the document furnished complies with the timeline prescribed.
In case any information doesn’t match up, you may not be able to prove residency. So double-check all the details before you proceed. In the event of any address change, promptly inform the relevant entity so they can update the record to reflect your new address.
Wrapping up
If proof of address is what’s holding you back from setting up a business in Singapore, get in touch with Air Corporate right away.
Our experts can provide you with all the information you need and help register your business in Singapore in a hassle-free manner. We also take care of the business account opening procedure and guide you about the documents you need to furnish.
So leave your worries aside and sign up with Air Corporate before you take the plunge.
FAQs
1. I am a foreign company. Can I use my virtual office address as proof of business address in Singapore?
Your virtual office address is insufficient as address proof of your business.
Even though Singapore laws allow you to open a virtual office, a valid registered office address is mandatory, which doubles up as proof of business address. This is a physical location where company records are available for inspection.
2. Can geolocation data work as address proof?
Currently, most regulators in Singapore and elsewhere are reluctant to admit GPS data as address proof, even though it is a faster and more efficient way of gathering information.
Since the Finanсial Action Task Force (FATF) has pressed on the need for accepting geolocation-based proof of address, it remains to be seen if regulators warm up to the idea in the future.
As one of the leading financial centers of the world, Hong Kong is the go-to business destination for foreign entrepreneurs.
For any business operation, banking services are critical since most require a line of credit and other facilities such as making deposits and sending remittances.
Thus, the banking sector in Hong Kong has been vital to the evolution of the region as a top jurisdiction for doing business.
In fact, seventy out of the top hundred international banks across the globe have a presence in Hong Kong. Twenty-nine of them also have regional headquarters in Hong Kong.
But how to pick the best one out of the various banks in Hong Kong?
This article rounds up the top choices you can consider and also provides you with an alternative if you don’t want to transact with traditional banks.
An overview of the banking system in Hong Kong
As an international financial hub handling a huge volume of external and domestic transactions, the banking system of Hong Kong is a highly regulated sector.
No business can accept deposits without obtaining a license from the regulator, Hong Kong Monetary Authority.
There are three types of deposit-taking companies in Hong Kong
Licensed banks
These institutions can carry out all banking transactions as per the Hong Kong Banking Ordinance, including:
- Accepting deposits, regardless of the size of the deposit and its maturity;
- Opening current and savings accounts;
- Granting loans and collecting cheques;
- Freely using the term ‘bank’ freely in their names
Restricted license banks
These institutions are only permitted to carry out certain banking activities. They are primarily engaged in providing merchant banking and capital market services.
While they may operate both within and outside Hong Kong, they can only accept deposits of HKD 500,000 and above, regardless of the maturity period.
Deposit-taking Companies
Licensed banks can own standalone deposit-taking companies that engage in commercial lending, securities business, and consumer finance.
They can accept deposits of HKD 100,000 or above with a maturity of at least 3 months.
Why choose banking services in Hong Kong?
The commercial banking system in Hong Kong is one of the best in the world. It is sophisticated and offers comprehensive one-stop banking solutions, making it immensely attractive for foreign and domestic businesses alike.
Hong Kong ranks among the top five financial centers in the world and is home to some of the most revered financial institutions.
In fact, three out of the top 10 banks in the world are Hong Kong banks.
What to keep in mind while evaluating Hong Kong banks?
Before you go ahead and open a business bank account with a Hong Kong bank, here’s what you should consider:
- Do you have relevant documents to prove your eligibility for a corporate bank account?
- Is the bank account opening process user-friendly? Can you do it online remotely?
- Does the bank provide mobile banking services?
- Can you resolve your issues through the customer service hotline?
- Do you have to maintain a minimum deposit in your account and pay a penalty if you fail to do so?
- Does the bank account support multi-currency options to manage your overseas transactions?
- What are the applicable fees for using ATMs within and outside Hong Kong?
- Do you have to pay additional fees to send money abroad or get it from overseas?
- What is the interest rate on deposits?
If you’re unsure about traditional banks and would like to opt for a more convenient option, opening a bank account online in Hong Kong could also be another option for your business.
Let’s take a look at the top 5 banks in Hong Kong that you should consider for your business.
Top 5 banks in Hong Kong to consider
1. Hang Seng Bank
The Asian Banker ranks Hang Seng Bank as the 4th best bank within the Asia Pacific region. In 2021, Asiamoney rated Hang Seng bank as the best Hong Kong bank for SME clients.
Hang Seng bank offers various services to serve its domestic and global clients. It includes:
- Commercial banking
- Private banking; and
- Personal banking
The bank also supports foreign currency business accounts and savings accounts.
Hang Seng Bank Fees
Here’s an overview of fees payable for various services:
Account opening
Biz Virtual+ Account:
HKD600 (if you apply remotely)
HKD1,200 (if you apply through Business Banking Center)
Integrated Business Solutions Account:
HKD1,200 (whether you apply remotely or through the Business Banking Center)
- Initial deposit – HKD 20,000
- Telegraphic transfer
- Receiving a transfer – HKD 65
- Sending a transfer – HKD 85 (if the beneficiary account is with Hang Seng bank in Mainland China or Macau) and HKD 125 (if the beneficiary account is in Mainland China or Macau but with another bank or if the beneficiary account is in another country or territory)
2. HSBC Bank
Hong Kong and Shanghai banking corporation Limited or HSBC is one of the oldest banks operating in the region. On the basis of its balance sheet strength, the bank occupies 2nd rank in the Asia Pacific region, as per the Asian Banker.
It is the preferred choice of many HNI individuals and investors
HSBC Bank offers the following services:
- Commercial banking
- Retail banking and wealth management advisory
- Global private banking, and
- Global banking
HSBC Fees
Account opening
HKD1,300 (if you apply through Account Application Center)
HKD2,250 (if an overseas HSBC branch facilitates the process)
- Initial deposit – HKD 10,000
- Telegraphic transfer
- Receiving a transfer – HKD 65
- Sending a transfer – HKD 100 (if the beneficiary account is in Mainland China ) and HKD 125 (if the beneficiary account is in any other country)
3. Citibank
Citibank was the first among the international banks to offer services in Hong Kong. The bank is now synonymous with a strong global brand, catering to a multitude of customers.
It is a leading investment bank that also caters to commercial and private clients. Non-residents and ex-pats choose Citibank over others when looking for private banking services, largely because of no initial deposit requirements.
It also offers Citi Private Bank services for ultra-high-net-worth entrepreneurs.
Citibank fees
Account opening
HKD 200o (if you open a local company account)
HKD 8000 (if you open a company account for an overseas company)
- Initial deposit – NIL
- Telegraphic transfer
- Receiving a transfer – NIL
- Sending a transfer – fee waived for online transfers. Otherwise, it is HKD 200 for Citibank and CitiPriority clients and HKD 100 for CitiGold clients.
4. Standard Chartered
Established in 2004 in Hong Kong and with a presence in over 60 countries, Standard Chartered has become a preferred choice in the last few decades. It has been a trailblazer in providing a suite of digital banking products and services.
To keep up with the changing landscape, the bank also offers specialized banking solutions for customers in the ESG sector through sustainability loans, green mortgages, and other ESG derivative products.
Standard Chartered Account Fees
Account opening
HKD5,000 (for an account of an overseas company)
- Initial deposit – HKD 1000
- Telegraphic transfer
- Receiving a transfer – Free for Priority Banking clients
- Sending a transfer – HKD 120 for Priority Banking clients and HKD 150 for others
5. DBS Hong Kong
With its headquarters in Hong Kong, DBS is another key player in the banking sector in Hong Kong. Over the years, DBS has been at the forefront of promoting sustainability in the Asia Pacific market through various corporate social responsibility initiatives.
Here are some key benefits that DBS Bank offers to SMEs:
- SMEs and startups in Hong Kong can opt for DBS BusinessClass
- There are various loan application schemes for SMEs
- The bank carries out swift credit checks in case of urgent financing needs
DBS Bank Account Fees
Account opening
HK$1,200 – Local company account
HKD 10,000 – Overseas company account
- Telegraphic transfer
- Sending a transfer – HK$115 per transaction done through ideal banking services and HKD 200 per transaction if the transfer is via branch
- Receiving a transfer – HKD 65
Note – all fees indicated above are as of the date of publication. Please refer to the bank’s website for the latest fees.
Is opening a virtual bank account a better option for you?
While there are several attractive Hong Kong banks to take your pick from, opening an account may not always be a straightforward process.
Instead of remaining stuck in a loop of red tape and bureaucracy, opening a virtual account with a Hong Kong-based fintech company can be a better solution, especially for foreign companies.
For instance, Statrys offers a multi-currency business bank account in Hong Kong. The application process for such an account is extremely straightforward and you can complete it remotely.
A business account as such has all the features one would typically expect from a bank account, like multiple currencies or making local and international payments at a much cheaper rate.
If you are a foreign business, exploring your options of opening a business bank account in Hong Kong, reach out to Air Corporate.
We can assist you with setting up a new company and also with establishing your bank account.
The process is completely remote and less time-consuming, making it convenient for entrepreneurs and small businesses to operate effectively.
FAQs
Can a non-resident open an account in a Hong Kong bank?
Anyone is free to open an account with a bank in Hong Kong.
However, depending on whether the account is for personal use or business use, certain restrictions may apply.
Which is the best bank in Hong Kong?
This would depend entirely on your expectations from the bank.
It is hard to pick a single bank in Hong Kong as each of them offers a unique suite of services, making them all strong contenders.
Is Hong Kong a good jurisdiction for banking?
The banking system in Hong Kong is extremely sophisticated, catering to the needs of modern-age customers.
Whether you want to open a personal account or a business account, there are plenty of options to choose from.
Most people associate the term ‘offshore bank accounts with multinational corporations or ultra-rich millionaires carrying out illegal activities such as evading taxes.
In reality, though, offshore bank accounts are a completely legal and valuable way to take care of financial commitments spread across jurisdictions.
So what are the benefits of having a bank account offshore? Do you need to set up an offshore company before you can open an offshore account? And most importantly — which is the best destination for opening such an account?
This guide answers all your questions and also rounds up the 6 hottest destinations for opening offshore accounts in 2023.
What is an offshore bank account?
When you open an account in a country where you don’t live, it is known as an offshore bank account.
For instance, if you live in the UK but open a bank account in the US, it counts as an offshore account.
An offshore company also needs such accounts when carrying out business activities in different countries.
Say, your company wants to do business in Singapore but the company’s principal investors reside in Malaysia. In that case, opening an offshore account in Singapore can help to send and receive payments in Singapore Dollars.
What is the use of an offshore bank account?
Offshore accounts are used for a variety of reasons, including:
- Holding and receiving payments in multiple currencies;
- Reducing your business tax liability;
- Protecting your investments and assets in a foreign jurisdiction; and
- Enjoying privacy and security
Is Offshore Company Incorporation Mandatory to Open an Offshore Account?
Setting up an offshore company is only not the only way to start your offshore account.
As a parent company, you may incorporate an offshore company to enjoy tax benefits and a better regulatory regime. But there are various other reasons why you should have an offshore company.
If you hold investments in a foreign country in an individual capacity or spend a part of the year living in a different country or even provide financial support to someone who lives overseas, you are eligible to open such bank accounts.
Why Choose an Offshore Bank Account?
These accounts make it incredibly easy for their holders to manage financial obligations across countries. One can also benefit from attractive tax incentives that come with maintaining accounts in a different country where the tax system is relaxed.
Offshore account holders earn higher interest rates on deposits when compared to deposits in domestic accounts.
What to consider when choosing a destination for your offshore account?
There are a few things to keep in mind before you decide on your destination.
These include:
- The economic and political conditions of the country
- Ease of setting up the bank account remotely
- Availability of internet banking facilities
- State of banking infrastructure and privacy laws
- Flexibility to sign up for a multi-currency account
- The reputation of the financial institution
- Requirement of making a minimum initial deposit
- Fees payable for making international transfers
Which Countries are Ideal for Setting Up an Offshore Bank Account?
There are several countries that allow you to set up an offshore bank account. Most are known for their business-friendly laws and economic stability.
Here is a list of the top 6 countries to consider, if you are on the lookout:
1. Switzerland
Switzerland is a popular choice for opening offshore accounts for several reasons.
Swiss banks and financial institutions are bound by strict confidentiality and privacy laws that forbid them from sharing any information regarding someone’s account without consent.
A Swiss bank is not at liberty to share whether a person even has a bank account unless the account holder consents. Illegally disclosing information attracts heavy penalties and a six-month jail term for Swiss bankers.
Swiss markets are tightly regulated which means investors face a low financial risk and better wealth protection.
Switzerland also has a very strong economy and is the most politically stable country in the world, which are added incentive for an offshore company.
2. Hong Kong
If you are looking at the Asia Pacific region for opening offshore bank accounts, Hong Kong is an excellent choice.
Regarded as a leading financial center in the world, Hong Kong offers several advantages to its foreign banking customers.
75 out of the 100 largest banks in the world have a presence in Hong Kong. These banks offer a wide array of financial services to suit the needs of foreign companies.
Even though the banking sector is strictly regulated by Hong Kong laws, there are no restrictions imposed on the outflow or inflow of funds out of Hong Kong bank accounts.
Foreign entrepreneurs can open a corporate bank account in Hong Kong without being present in person — the entire procedure can be completed online. All you need is a local registered address of your company and relevant documents.
Banking firms in Hong Kong are also bound by confidentiality obligations that prohibit them from disclosing customer data.
Lastly, Hong Kong has an efficient legal system and offers various tax relief measures that attract foreign entrepreneurs to set up offshore companies. And thanks to Hong Kong’s strategic location, an offshore company also enjoys direct access to the Chinese market.
Not sure how to go about company registration in Hong Kong? Check out this handy guide to setting up an Offshore company in Hong Kong.
3. Cayman Islands
Apart from being a popular tropical destination, the Cayman Islands is also a preferred choice when it comes to offshore banking.
Cayman is a politically stable country with excellent offshore banking facilities which include investment and estate management services.
It is also a tax haven where account holders have no liability to pay any taxes including capital gains tax, dividend tax, income tax, property tax, or company tax. Foreign investments are not subject to any exchange control laws allowing the free movement of funds in any currency.
4. Germany
Germany is a popular foreign banking destination if you are looking at Europe.
As one of the stronger economies in the European Union, Germany is strict about regulating their banking system. German banks occupy the fourth position in the list of the top ten safest banks across the globe, thanks to the safety protocols in place.
The economic stability in the country also makes it a secure destination for parking your funds. Plus, most German banks follow a remote banking system that enables you to open your offshore account without being physically present in Germany.
5. Belize
Belize is considered a premier destination for opening offshore bank accounts.
Banks in Belize are known to offer the highest interest rate compared to what is offered by international banks elsewhere. The account of an offshore company is exempt from any exchange control laws.
The country also has a politically stable environment which is a critical factor for anyone transacting in offshore jurisdictions.
Exemption from the local tax system used to be a major pull for setting up an offshore company and its account in Belize. But due to pressure from Organization for Economic Co-operation and Development, several favorable tax practices have been discontinued.
6. Singapore
Regarded as one of the best places in the world to do business, Singapore is a hot favorite when it comes to offshore banking.
Singapore’s government closely regulates the banking system, which makes it extremely secure and stable. Banks provide an array of services to choose from, including financial advice, tax planning, and investment management.
It also offers a stable economic and political environment, which makes it easy for a Singapore offshore company to carry out its business activities.
But Singapore offshore companies may find it challenging to set up an account completely remotely as several banks need the account holder to be present in person.
A newly incorporated company also needs to provide a business plan and demonstrate business interests as part of the account opening procedure.
Final thoughts
Setting up a bank account in a foreign jurisdiction can ease the operations of your offshore company and help it thrive.
But choosing the best destination for account opening depends on what works for your business as there is no one-size-fits-all solution.
Want to set up an offshore bank account in Hong Kong? Register with Air-Corporate today. We can set up your offshore company in Hong Kong which includes access to a remote business account.
FAQs
Is it legal to set up an offshore company?
Incorporating an offshore company is completely legal, as long as it doesn’t engage in any illegal activity.
So the first check should always be — is your offshore company legal?
Is it illegal to open an offshore account?
Offshore bank accounts have been historically associated with money laundering and tax evasion.
But opening an offshore account is a perfectly legal activity, as long as you comply with the legal regulations of your home country and the country where you open your account.
It is only illegal if the account is opened for tax evasion or money laundering.
How to open offshore bank accounts?
The exact procedure depends on which international bank you approach.
Typically, most banks will need your identity documents and also understand the source of your funds to open your account.
How to withdraw money from offshore bank accounts?
Usually, banks provide internet banking facilities and also issue a debit card that allows you easy access to funds, no matter where you are.
Each year, many Hong Kong companies have their bank account or business account frozen, suspended or closed.
But whatever the reason, having your company bank account closed or frozen is simply a nightmare.
Suspended bank account means blocked funds
In most cases you will not be able to withdraw your funds.
You will simply receive a bank cheque that can only be credited to another bank account in the name of your company.
Obviously, this is a chicken and egg problem if your company does not have another bank account in Hong Kong.
And when you try to contact the bank for other options, there will be no answer and your money will be stuck forever.
Many companies finally give up, their money stays with the bank and is basically lost.
How to recover your funds?
If you are in this situation, we can help. There is a solution.
We have helped many Hong Kong companies get their funds returned by the bank to their directors or shareholders.
We are successful most of the time. You have nothing to lose.
If you work with us, we will only invoice you if and when you get the funds back.
We only charge a small percentage of the funds you recover.
So, if you have a Hong Kong company with a closed, suspended or frozen bank account, please contact us at [email protected] and we will take it from there.
A few days ago we posted a video about the struggles of SMEs to open and keep a bank account, as well as the partnership between Air Corporate and Statrys, a neobank based in Hong Kong.
Following this video, we received many questions regarding this partnership, and will try to answer most of them here today.
What exactly is Statrys?
Statrys is a digital banking platform that allows SMEs to get access to a bank account, make and receive payments in many jurisdictions, and access attractive foreign exchange rates… So pretty much all the services offered by a traditional bank, except that the experience is tailored for SMEs and designed to offer them a frictionless experience.
Statrys is not a bank. It is a neobank licensed as money service operator registered in Hong Kong and a Small Payment Institution in the UK. Pretty much the same as many challenger banks in Europe.
This means that the funds of your company are held by Statrys partner’s bank, which one of the largest ones Asia. Statrys acts as the client interface for all the business finance operations of your company such as payments, money transfers, notifications, statements.
How easy or difficult is the process of opening an account with Statrys?
The whole purpose of Statrys is to make the client experience simple, fast and user friendly.
The account opening process takes a few days only, and actually less than 48 hours if you register your company with us at Air Corporate or if you appoint us as the Company Secretary for your Company.
We will also help you coordinate with Statrys to open your account, free of charge.
And the most important: the whole onboarding is done online and in a few clicks, meaning that you do not need to travel to Hong Kong to open your Statrys account.
What can I do with my company Statrys account?
The current version of Statrys allows your company to do 3 main things:
- Make and receive payments in many countries and in as much as 14 currencies
- Do foreign exchange conversions at very attractive rates, more attractive than the rates offered by the big banks or online forex platforms
- Keep track of your company finances by automatically generating bank statements
Statrys will soon be releasing debit cards. It also allows your company to also open local accounts in Europe or the US, which is great for online sellers. We will post another update on these features later on.
Get Started with a Statrys Business Account
Our partnership with Statrys allows you to enjoy the following perks:
- We guarantee that if you incorporate your company with Air Corporate, or if you appoint Air Corporate as Company Secretary for your Hong Kong company, you will get your Statrys multi-currency account within 48 hours
- We will assist with the ongoing compliance of your Statrys account, meaning that each time your company goes through annual renewal or is reorganized, we will take care of informing Statrys for you. This way you can focus on your business and spend minimum time on the administrative aspects of keeping your Statrys account alive.
In conclusion, if you have a problem opening a bank account for your company, or if your company bank account was frozen or closed, we can help.
As usual, please contact us for more information about Air Corporate or Statrys.
Ready to open your business account and register your company? Sign up today!
Everyone knows that it has become extremely difficult for SMEs to open and keep a bank account in Hong Kong.
Let’s see why, and what can be done about it.
Why are big banks closing so many accounts?
It is simple: over the last few years, most countries have increased their efforts to fight money laundering, terrorism, and tax evasion.
They realized that banks were not doing enough and imposed stricter obligations on them.
This led to many of the big banks being imposed huge fines and sometimes be at risk of losing their licenses.
Facing a lot of pressure, the banks had no choice but to apply much stricter standards and invest massively in compliance resources.
Of course, this resulted in additional operating costs for the banks: opening and maintaining a client bank account now costs a bank much more than 5 or 10 years ago.
One of our contacts at a big bank recently told us that the cost of compliance on any client now easily exceeds USD 1,000 per year.
Bank, therefore, turned their bank to clients who are not profitable for them. This includes:
- SMEs that do very few transactions each month, and on which the bank makes virtually no money
- Companies regarded as “complex”, meaning companies that require additional compliance work for the banks. For example, this is the case when the directors or shareholders of a Hong Kong company reside overseas or if the business is spread across several jurisdictions.
These clients are just not profitable enough for the banks.
The banks, therefore, use the excuse of their “limited risk appetite” to get rid of them.
How to easily open a business account for my company?
Some alternative to traditional banks has appeared over the last few years, with the rise of “neobanks” or “challenger banks”.
There are many of them in Europe and a growing number in Hong Kong.
One of them there is called Statrys.
If you are an SME with international business, Statrys allows to open a multicurrency business account for your company in 2 days, all online with no need to travel to Hong Kong.
Your Statrys account allows you to make and receive payments in many many countries and enjoy very attractive foreign exchanges rates.
Through our partnership with Statrys, we can guarantee that if you create your company with Air Corporate or if you appoint Air Corporate as your company secretary, you will obtain a Statrys multi-currency account for your company within 48 hours, all online. Guaranteed!
We will publish another video soon about our partnership with Statrys and how we can guarantee the opening of your Statrys account.
In the meantime, feel free to contact us if you are struggling with bank account problems.
And as usual, please subscribe to our channel for more tips about running your company in HK. Until next time, stay tuned.
Looking to register your company in Hong Kong? Register with Air Corporate today and get a free business kit to get you started.
Already have a company but need a business account? Check out our partner Statrys. Get 11 currencies in 48 hours, completely online.
