As a business owner, setting up a separate bank account for your business must feature on top of your to-do list. Even though you may have a personal account, using it to care for your business finances can be a nightmare.

Apart from ensuring compliance with legal and accounting principles, a corporate bank account makes your business operations appear more professional and offers financial protection.

This guide covers everything you need to know about the importance of having dedicated company accounts.

What is a corporate account?

A corporate or company account refers to a bank account that’s opened in the name of a company. The account can receive business income and facilitate various business transactions.

Most leading banks and financial institutions across the globe support company accounts.

Opening company accounts may be mandatory for businesses depending on the laws and regulations of the country where you conduct business. In any case, opening company accounts for efficient management of business finances is highly recommended.

A word of caution — opening and operating company accounts shouldn’t be confused with corporate accounting. Corporate accounting is a specialized branch of accounting that deals with preparing a company’s financial accounts and cash flow statements.

How does a corporate account work?

A corporate bank account works in the same manner as any regular bank account.

You can use it to park any funds from your business and pay for various business expenses. You can also use the account to carry out online transactions.

Banks also issue checkbooks and debit cards to allow withdrawal from corporate bank accounts.

Are business accounts different from company accounts?

The term ‘business account’ is often used interchangeably with a corporate account.

Even though they may sound the same, there are a few differences between business and company accounts.

Who can open the account?

Any business entity is free to open a business account. It includes corporations, partnership, and sole proprietorship businesses, and limited liability companies.

However, only a corporation incorporated under the law can open a company account. Account opening should be backed by a corporate resolution passed by the company’s board of directors.

Independence of operations

Since corporate bank accounts are more formal, they can only be operated by a list of authorized signatories. The corporation holding the account can appoint the signatories by passing relevant board resolutions.

On the other hand, a business account usually operates as the personal bank account of the business owner though the account may be opened in the name of the business. The business owner can access the account directly without appointing other authorized signatories.

Liability to creditors

Since a company is recognized as a legal person, corporate bank accounts are not considered personal assets of the shareholders. As a result, only company creditors can attach them. The accounts cannot be used to meet unpaid personal debt obligations of any individual shareholder.

In contrast, a regular business account is considered a personal asset of the business owner, and personal creditors of the owner are free to attach them.

What are the benefits of having a company account?

The key advantages of maintaining a corporate bank account are as follows:

Lends credibility to your business

A proper company bank account signals to your investors, customers, and vendors that you are a legitimate business.

Promotes financial management

Corporate accounts make it extremely convenient to track your business expenses and keep the finances separate.

It helps you avoid personal liability

Separating business banking from your personal finances ensures you do not incur any personal liability for debts in your company’s name.

Fewer tax reporting issues

Maintaining a separate bank account for your business allows you to file accurate tax returns, as there are no overlaps between business income and personal income.

Better personal liability protection

As a corporate account holder, you won’t be held personally liable for any profit loss if your business fails.

A personal bank account doesn’t offer similar protection.

Boost the company’s credit rating

Without a corporate bank account, you need to rely on your individual credit score when you apply for any loans. Having a corporate account can boost the business’s credit rating and make it easier to obtain financial assistance for the company.

What are the differences between company accounts and personal bank accounts?

Here are the critical differences between corporate accounts and personal accounts:

Signatories

A personal account can only have one or a maximum of two signatories, as the account is meant for personal use.

Company accounts can have several signatories.

Fees

The fees for opening and managing company accounts are higher when compared to personal accounts.

End-use

A company account is meant for paying business expenses and receiving business income.

A personal account is for paying personal expenses and personal parking funds.

Liability

A corporate bank account protects business owners from incurring any personal liability for company debts.

A personal account doesn’t offer any protection to the account holder. If the account holder is declared insolvent, creditors can attach the personal account to meet unpaid obligations.

What documents do you need to open company accounts?

As part of corporate account opening formalities, you must submit several documents to complete a KYC check.

While the exact checklist of documents varies depending on the banks and the country they are located in, here’s what you can expect:

• Incorporation documents of the business, such as the certificate of incorporation, business registration certificate, and articles of association
• Proof of business, such as financial statements or business plan
• Proof of business address
• A copy of the board resolution of the company authorizing the opening of the bank account
• Identity proof documents, such as a passport or any identity card issued by the respective government of principal shareholders or beneficial owners of the company
• Proof of residence of the principal shareholders or beneficial owners
• List of signatories authorized to operate the business bank account

Always speak to the bank about the documents required to set up a new corporate account. Failure to submit relevant documents can result in the bank rejecting your account opening application.

Top tips for managing company accounts

Operating corporate bank accounts throw up unique challenges you may not encounter otherwise during banking operations. This is especially true if you are only used to operating a personal bank account.

Here are a few things company account holders should keep in mind for managing their accounts without glitches:

Be aware of introductory offers

Most banks offer a range of benefits to incentivize customers to open company accounts. These include higher interest rates, cash bonuses for preliminary deposits, and waiving maintenance fees for the first year, etc.

Ask each bank about their introductory offers to make an informed choice.

Check whether your deposits are insured

Ideally, you should open corporate accounts with financial institutions that insure the deposits. If the bank shuts down its business, you don’t risk losing all your hard-earned money.

In some countries, deposit insurance is mandatory for banks and financial institutions. For example, all licensed banks in Hong Kong offer insurance protection of up to HKD 500,000 per depositor.

Double-check the fees payable

There are various fees associated with company accounts, including monthly service fees and maintenance fees. It is also common for banks to charge an account opening fee or ask for a deposit in lieu.

Additionally, you may also need to pay transaction fees for ATM cash withdrawals and termination fees for shutting down your corporate bank account.

Banks may sometimes agree to waive the fees provided the account holder fulfills additional conditions, such as the bank’s minimum balance requirements.

Ask about additional services and benefits associated with corporate accounts

As a corporate bank account holder, you may receive additional benefits from your bank, such as access to an overdraft facility, pre-approved business loans up to a certain amount, mobile cheque deposit, and virtual assistance.

Depending on the nature of your business, you may be better off choosing a bank that offers more services and features to support your business banking needs.

Why is it critical for businesses to have company accounts? 

Regardless of the size or nature of your business, you should open a company account if you need a hassle-free way of receiving, managing, and remitting company funds.

Always consider the requirements of your business before you go ahead and open a business bank account.

If you want to incorporate a company in Hong Kong and need assistance with setting up your company account, get in touch with Air Corporate. Our experts can help you open a corporate account and suggest alternatives to traditional banks depending on the nature of your business.

FAQs

What is the cost of opening company accounts?

Most banks charge an application fee for opening any type of account, including a corporate account.

The exact cost varies depending on the bank you approach.

Who can open a corporate bank account?

Usually, any business organization incorporated under the law can set up a corporate bank account.

Unincorporated business entities can consider opening a regular business account.

Who is the owner of company accounts?

Company accounts are opened by incorporated entities recognized as legal persons. Therefore, the corporation owns the account.

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Given that Hong Kong is one of the top international financial centers, it is not surprising that Hong Kong’s banking sector enjoys a particularly favorable position in the world.

There are 163 licensed banks and 8 virtual banks catering to commercial lending and personal banking needs.

While it is incredibly easy to find a bank, who is the banking system’s crown jewel from the long list of banks in Hong Kong?

Check out this compilation of the Best National Banks in Hong Kong to Consider for Your Business.

List of Top Banks in Hong Kong

Here’s a list of the best banks in Hong Kong for your banking needs:

• Bank of China (Hong Kong)
• HSBC Hong Kong
• Hang Seng Bank
• Standard Chartered Hong Kong
• Citibank
• Bank of East Asia

How Banking System Works in Hong Kong

Before we dive deep into the list of banks in Hong Kong, here’s a look at how the banking sector operates.

Hong Kong is home to a thriving banking industry regulated by the Hong Kong Monetary Authority (HKMA).

HKMA classifies the banks into three tiers based on the deposit amount, nature of business, and deposit term. The three tiers are collectively called Authorized Institutions. They are:

Licensed banks

These banks can operate current and savings accounts and accept deposits of any size from the public.

They can also use the term’ bank’ in their name without restriction.

Restricted License Banks

Such banks can only accept deposits of HKD 500,000 or more.

They can be incorporated both within and outside Hong Kong.

Deposit-taking companies

Such banks can accept deposits of HKD 100,000 or above with a minimum maturity of 3 months.

Below is a list of the most popular banks in Hong Kong:

1 – Bank of China (Hong Kong)

Bank of China (Hong Kong) is the 4th largest bank in the world and manages total assets worth HKD 3 trillion and above.

It provides a full suite of banking services, including corporate banking, personal banking, and treasury services.

With over 190 branches, the Bank of China also ranks as the 2nd largest commercial banking group in Hong Kong.

Pros and Cons of Bank of China (Hong Kong)

Here’s a look at the advantages and disadvantages associated with the bank:

Pros

Cons

An extremely strong network of branches between Mainland China and Hong Kong, with over 280 branches in Hong Kong and 15 branches and sub-branches in China’s mainland to support the cross-border banking needs of customers  A diverse range of financial products and services are on offer, including foreign currency exchange, international settlement, financing, cash management, and customs clearance assistance  A solid market reputation

The account opening process can be long-winded Not all staff members speak fluent English

 

Bank of China (Hong Kong) Fees

Here’s a look at the fees payable for key services:

• Initial deposit fee – NIL
• Account opening – The application fee is HKD 1200. If the applicant is a company incorporated overseas, the bank levies an additional HKD 5000 plus fees incurred for conducting a company search at actuals.
• Receiving a wire transfer – No fees if the amount received is less than HKD 500 and HKD 60 if the amount remitted is more than HKD 500
• Sending a wire transfer – HKD 240 per remittance between branches of the bank in the mainland and designated branches outside Hong Kong and HKD 100 per remittance through electronic modes
  Information as of date. Please check the bank’s website to know the latest fees.

2 – HSBC Hong Kong

Hong Kong and Shanghai Banking Corporation (HSBC) is the biggest bank incorporated in Hong Kong, with over 220 branches throughout the region.

Known as “Wayfoong” in Cantonese, which means “focus of wealth,” HSBC Hong Kong is well known for its range of personal, commercial, and corporate banking financial services across Asia.

Pros and Cons of HSBC Hong Kong

Here’s a look at the advantages and disadvantages associated with the bank:

Pros	Cons
Offers diverse account options for business customers such as HSBC Sprint Account, HSBC Business Direct, and BusinessVantage The preferred choice of HNIs	Charges higher fees for telegraphic transfers The high minimum deposit for opening a corporate account

 

HSBC Hong Kong Fees

Here’s a look at the fees payable for key services:

• Initial deposit fee – HKD 10,000
• Account opening – HKD 1300 for opening accounts online. HKD 2250 if an overseas HSBC branch facilitates account opening.
• Receiving a wire transfer – HKD 65
• Sending a wire transfer –HKD 100 for the beneficiary account in Mainland China and HKD 125 for the beneficiary account in any other country
  Information as of date. Please check the bank’s website to know the latest fees.

3 -Hang Seng Bank

Hang Seng Bank is one of Hong Kong’s leading banks and a member of the HSBC group. It offers personal and commercial banking services.

It has 260 outlets in Hong Kong, 20 outlets in Mainland China, and a presence in Macau, Singapore, and Taipei.

Pros and Cons of Hang Seng Bank

Here’s a look at the advantages and disadvantages associated with the bank:

Pros	Cons
Local presence and solid reputation in Hong Kong Offers innovative e-services such as Mobile Cash Withdrawal	Global presence is not very strong compared to its competitors Lack of variety in financial products on offer

 

Hang Seng Bank Fees

Here’s a look at the fees payable for key services:

• Initial deposit fee – HKD 20,000
• Account opening – HKD 600 if you apply remotely and HKD 1,200 if you apply through Business Banking Center
• Receiving a wire transfer – HKD 65
• Sending a wire transfer – HKD 85 if the beneficiary account is also with Hang Seng Bank in Mainland China and Macau and HKD 125 if the beneficiary account is in another country/with another bank
  Information as of date. Please check the bank’s website to know the latest fees.

4 -Standard Chartered Hong Kong

Standard Chartered is one of three commercial banks with an HKMA license to issue banknotes. Asia Banker magazine has voted it as 3rd strongest commercial bank in the Asia Pacific region.

It operates 75 branches across Hong Kong.

Pros and Cons of Standard Chartered Hong Kong

Here’s a look at the advantages and disadvantages associated with the bank:

 

Pros	Cons
Strong global presence with operations in over 60 countries. Dedicated relationship managers for customers	Fees are higher compared to competitors In addition to maintaining a minimum balance, customers have to bear monthly maintenance fees

 

Standard Chartered Hong Kong Fees

Here’s a look at the fees payable for key services:

• Initial deposit fee – HKD 1000
• Account opening – HKD 5000
• Receiving a wire transfer – HKD 55
• Sending a wire transfer – Charges a flat fee plus an additional fee for non-domicile currency. A flat fee is HKD 140 for International Trade Account Customers, HKD 160 for Preferred Business Account Customers, and HKD 200 for Business account customers
  Information as of date. Please check the bank’s website to know the latest fees.

5 -Citibank

Citibank Hong Kong was the first foreign bank to start operations in Hong Kong. Apart from commercial banking, Citibank also offers investment banking services.

It has 48 branches throughout Hong Kong and is also the largest credit card issuer in the country.

Pros and Cons of Citibank Hong Kong

Here’s a look at the advantages and disadvantages associated with the bank:

Pros	Cons
No initial deposit requirement Bespoke private banking services for ultra-high-net-worth entrepreneurs Well-recognized brand globally	Sporadic issues with customer service No online account opening is available in Hong Kong

 

Citibank Hong Kong Fees

Here’s a look at the fees payable for key services:

• Initial deposit fee – NIL
• Account opening – HKD 8000 for an overseas company and HKD 2000 for a local company
• Receiving a wire transfer – waived
• Sending a wire transfer – No fees for online transfers except for Citi Banking clients who need to pay HKD 200. Transfers through manned channels are charged HKD 220 for CitiPriority clients and HKD 100 for CitiGold clients.
  Information as of date. Please check the bank’s website to know the latest fees.

6 -Bank of East Asia

Bank of East Asia is the biggest independent in Hong Kong and provides a bouquet of services including consumer finance, retail banking, and corporate banking services.

It has 17 branches throughout Hong Kong.

Pros and Cons of Bank of East Asia

Here’s a look at the advantages and disadvantages associated with the bank:

 

Pros	Cons
Services are at par with foreign banks Has a strong reputation in the Hong Kong market as a family-run bank	No global presence A high initial deposit fee

 

Bank of East Asia Fees

Here’s a look at the fees payable for key services:

• Initial deposit fee – HKD 10,000
• Account opening – HKD 10,000
• Receiving a wire transfer – HKD 65
• Sending a wire transfer – HKD 200 plus cable charge if sent through the branch and HKD 20 plus cable charges if sent through online channels. The cable charge is HKD 100 if the beneficiary account is with the Bank of East Asia and HKD 130 for other banks.
  
  Information as of date. Please check the bank’s website to know the latest fees.

Why Choose The Best Banks for Your Business

Not all banks are created equal — services offered and fees vary widely.

Whether you opt for international or local banks, picking the best one suited to your banking needs is extremely important. After all, banks are an essential cog in the wheel for your business operations.

From providing long-term and short-term finances to remitting funds, there’s hardly any aspect of your business where banks don’t play a role. So make sure to consider what each bank can offer you carefully before you sign up with one.

If you are a foreign business wondering How to Open a Company Bank Account Online in Hong Kong, contact Air Corporate immediately.

We can assist with establishing your bank account with a physical or virtual bank in Hong Kong, making it convenient for entrepreneurs and small businesses to operate effectively. If you already have an account with an HK bank but cannot make any withdrawals, we can also guide you on How to Fix a Suspended or Frozen HK Bank Account.

FAQs

Who is eligible to open a corporate bank account in Hong Kong?

The exact eligibility criteria depend on the type of account you want to open and the bank where you want to open the account. As such, anyone can open an account in Hong Kong.

Which Hong Kong bank is best for foreign entrepreneurs?

HSBC, Citibank, Bank of China, and Standard Chartered are some of the top choices.

However, the exact match depends on what the customer is looking for.

Which is the largest bank in Hong Kong?

In terms of the assets held, HSBC ranks as the largest bank in Hong Kong. In 2021, the bank held assets worth HKD 10 trillion.

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Over the years, setting up an offshore entity has been one of the chosen ways for businesses to enjoy better asset protection and reduce their tax burden legally.

But very often, people tend to confuse an offshore company with offshore income. While offshore income is primarily a concept relevant to taxation, an offshore company is merely a structure for carrying out business.

Having said that, an offshore company may also benefit from favorable taxation laws regarding offshore income.

This article tells you everything you need to know about the two.

What is an offshore company?

An offshore company refers to a corporate entity incorporated outside the jurisdiction where the operations are primarily carried out, and the stakeholders reside.

The term offshore means something that is located outside or abroad.

Setting up such a company for business activities that comply with the law is perfectly legal.

Suppose you are based in Singapore and decide to incorporate a company in Hong Kong. In that case, your Hong Kong company will be an offshore company.

Similarly, if you are located in Hong Kong and decided to set up a company in Malaysia, it will be an offshore company.

While you can set up an offshore entity in a jurisdiction of your choice, some destinations work better than the rest due to attractive tax structures and corporate compliance requirements.

It is always better to evaluate the pros and cons of setting up an offshore company in the destination of your choice before you move ahead with the incorporation process.

A few pointers to keep in mind when you are considering incorporating an offshore company:

• What is the purpose of your offshore company?
• Do you want to set up your offshore company in a common law or civil law country?
• Are there any restrictions on the type of activities your offshore company can carry out in the jurisdiction of your choice?
• Is it easy for an offshore company to open a bank account in the country you are considering?

Features and benefits of setting up an offshore company

When you register an offshore company it’s important to understand factors that will be able to benefit you from setting one up.

Here are some of the key features and benefits of setting up an offshore company:

It can help you save on taxes

Reducing tax liability legally is one of the key concerns for business owners across the globe.

Typically, offshore structures are chosen for the attractive taxation regime of the country of incorporation.

For example, setting up a Hong Kong offshore company means that dividends declared will not attract taxes, making Hong Kong a preferred choice for doing business.

There is also no capital gains taxes in Hong Kong. This means no tax is levied on the profits from the sale or disposal of an asset unless facts establish that the disposal was in the nature of a trade.

Companies set up in Hong Kong that have operations generating profit outside Hong Kong don’t have to pay profit tax in Hong Kong.

It offers better confidentiality

Several offshore jurisdictions have strict privacy laws that prohibit government authorities and financial institutions from disclosing the details of company directors, shareholders, company bank accounts, etc., other than in exceptional circumstances.

This is especially beneficial for new players in the market who do not want their competitors to know about their operations or expansion plans.

Business owners enjoy better asset protection

When you park your assets in a different jurisdiction, you create a protective structure around them to prevent them from being seized due to frivolous litigation or seizures by the government.

For most business owners, setting up an offshore company is one of the preferred ways to safeguard their assets from creditors, attorneys, and plaintiffs.

Some offshore jurisdictions have debtor-friendly laws that make it easy to set up LLCs and trusts to protect the investor’s assets.

If someone wants to enforce a judgment passed against the investor in their home country and access their assets for setting unpaid debts, they would have to go through a circuitous path to get access to the offshore assets.

You enjoy relaxed corporate compliance

Corporate law regimes for some parts of offshore company jurisdiction are not strict in terms of taxes, which makes it easier to set up companies.

In some countries, there are no minimum paid-up capital requirements to be met. Offshore companies also have less stringent auditing and financial reporting obligations.

Moreover, some jurisdictions do not have any foreign exchange control regulations, making it easy to freely repatriate any income earned in those countries to any other destination.

Your assets can benefit from political stability

Setting up an offshore business can be a great move for asset protection, especially when if you find the chosen destination to be economically stable.

Carrying out business in a country engaged in civil war or facing a huge recession means constantly fearing external activities completely disrupting your business transactions.

What is a concept of an offshore income?

An offshore income refers to any income generated through activities performed outside your home jurisdiction.

For instance, if you’re a tax resident in that jurisdiction, this counts as offshore income.

Suppose you are a resident of the US and you have an offshore company in Hong Kong. Hong Kong tax laws levy a profit tax on only Hong Kong-source income.

So if you can demonstrate that the earnings of your company are through services rendered in the US, such income can be called offshore income.

Whether you can claim any tax benefits on your offshore income varies depending on the country where you set up an offshore company.

For example, suppose a Hong Kong company wants to claim tax benefits for offshore income. In that case, it should actively seek exemption when filing a profit tax return or obtain an advance ruling before commencing business activities.

Only if the Inland Revenue Department accepts the claim can a company benefit from the exemption.

So earning offshore income doesn’t mean it is automatically tax-free. You may still be taxed by your home country.

What are the factors you need to consider for offshore income?

If you want to take the tax benefits associated with offshore income, consider choosing a jurisdiction that follows a territorial tax system while setting up your offshore company.

Only such countries have tax exemptions on offshore income or foreign-earned income.

So, when you set up a company in a country with territorial taxes, you don’t have to pay any taxes on any income earned outside that country.

Another important factor to consider when selecting a jurisdiction with favorable offshore income tax laws is to see whether they have been flagged as a non-cooperative jurisdiction for tax purposes by the European Union.

The list, which has existed since 2017 and is updated regularly, identifies jurisdictions that do not have good tax governance in place to fight off tax evasion and avoidance.

Since such jurisdictions may change their tax regimes to comply with the EU requirements, businesses should not solely choose a jurisdiction for their offshore income tax treatment.

There is a possibility of such countries amending their tax laws to align with international tax standards, and one must evaluate the potential impact of the changes on their tax treatment.

For example, although, at present, only income sourced in Hong Kong is subject to profit tax, the Inland Revenue Department is in the process of updating the tax regime.

As part of proposed changes, dividends, disposal gains from shares or equity interest, interest income, and income from IP, which are foreign-sourced income, may be subject to profit tax:

• When such income is received in Hong Kong; and
• The relevant taxpayer fails to meet the requirements set out by the Inland Revenue Department

Bottom Line

Whether you want to reduce your tax burden, protect your assets, or enjoy better privacy, setting up a company in a foreign jurisdiction is a great option.

While there are several countries you can consider for offshore companies, make sure to pick one that meets your requirements. Don’t opt for the most popular destination.

If you’re considering Hong Kong for your next offshore venture, it can be an excellent choice for corporations looking for a new home for their business.

Get in touch with Air Corporate and let our experts help you start your offshore business in Hong Kong the right way.

FAQs

When is it illegal to set up an offshore company?

It is illegal only when you intend to use the offshore entity to evade taxes or money laundering activities.

How long does it take to incorporate an offshore company?

The incorporation process varies depending on the jurisdiction you choose.

Typically, most countries offer a hassle-free process of setting up an offshore entity in a bid to attract more foreign companies.

For instance, you can complete the entire process of setting up a Hong Kong offshore company in just a few days.

I pay taxes in the country where I live. Do I have to file my tax return in the country where I have set up an offshore entity?

This depends on the tax laws of the country where you have set up the company. Always make sure to seek proper legal, tax, and accounting advice to stay in compliance with the law.

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Opening 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.

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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.

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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.

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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.

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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.

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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!

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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.

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