How to increase your chances of bank account approval in Hong Kong

increase your chances

One of our articles have discussed and narrated how several banks in Hong Kong are leaning towards rejecting almost every client that falls under their ridiculous high standards. Most of the time, their criteria are hard to meet, or even match. That’s why most of applicants are left with no choice but to accept the fact that they are rejected.

First of all, in order to lower the possibility of rejection, you need to prepare yourself and your business. Companies, entrepreneurs, start-ups and SME’s, notwithstanding their size has to go over the prescribed requirements, policies and mandates of banks. This approach is to save you money, time and efforts.

Even though the horizon for some businesses and companies are oblique, we feel that it is NOT IMPOSSIBLE. This is why we have made a compilation of various things you can do in order to prepare you and your company from bank scrutiny and secure a fighting chance of that seal of approval.

We would like to set thing straight, these tips and words of advices are based on our actual experiences in dealing with various banks in Hong Kong.

STEP 1: Simplify Your Corporate Substance

Oftentimes, companies and entrepreneurs will make super complicated structure of business in terms of ownership and layering that it actually affects the overall business acumen of your company. To avoid this, simply define your purpose and outline the UBO structures.

You can use several solutions to this, which would involve offshore companies such as BVI, Seychelles, Samoa and other credible jurisdictions. Only thing left is to structure this solution properly in order to avoid any undue tax issues and operational problems.

STEP 2: Solidify Your Business Portfolio to the Bank

Think of this through this manner.

You are simply strengthening your business proofs to evidence that you are running a legitimate company. In basic terms, ensure that your business is legit and will operate in Hong Kong with a justifiable purpose, as well as being supported with specific business licences with no hidden agenda whatsoever.

Comply with KYC protocols in the bank, whether it be Customer Due Diligence (CDD) or Enhanced Due Diligence (EDD). Always bear in mind that these processes are normal and conventional.

Most importantly, beef up on company presentations, client portfolio database, product catalogue, online present boosting, as well as other business company operation proofs in order to give a safety net on your approval.

Basically, anything that can help the bank to get a better understanding about your company and the industry that you are operating from.

STEP 3: Optimise your Financial Transactions

Making sure that your origin of funds is important to avoid any suspicion on your agenda in opening a bank account.

Assure the bank by being cooperative and compliant that you are not a security risk in terms of AML-CTF matters and other illicit purposes. As much as possible, refrain from venturing into high risk and high value commodities including precious stones and metals.

Another thing to also do, is to avoid high volume, multiple or frequent transactions for service type of dealings solely for the purpose of procuring funds to a single beneficiary or otherwise.

Make certain that you will provide all pertinent details about your suppliers and customer information or data such as business cards, email correspondences, contracts/agreements, as well as quotations and invoices in order to bulk up on your business and assure the bank that you are a legit business person with a legitimate purpose.

STEP 4: Do Not Corroborate with High-Risk or Sanction Countries

This part is really important, review the current FATF, SDN and other global sanctions databases in order to determine whether a business partner, client, or supplier is belonging to a high risk or sanctioned countries such as Zimbabwe, Sudan, Iran, Syria, and others.

Consider trying to run a background check on the controlling persons of your clients and suppliers in order to ensure that they do not have ties to a high risk or sanction countries.

STEP 5: Acquire Our Services

Perhaps the most important part of these article is we would like to let you know that we offer various services that includes bank account opening in Hong Kong, Singapore, Macau, and other offshore jurisdictions such as Malta, Mauritius and others.

To know more of what we can do to ensure that you have an increased chance of bank approval, Contact Us Now!

Is it necessary to infantilize compliance officers?

Compliance

Should we continue to train compliance officers by mentioning unreachable goals, by inflating the importance of their actions and erecting them as the ultimate line of defense which will protect the society against criminals and terrorists?

Or should we be more pragmatic and told them that only 0.2 % of the proceeds of crime are seized, that most of their actions will disturb and inconvenience the work of legitimate business owners and that their job description is above all to protect their financial institution?

Are the compliance officers kids to be motivated or adults to be respected for the efficiency of their actions?

With 99% of criminal proceeds being injected without being noticed in the financial institutions, maybe the training should be focused on criminal activities, on criminal personalities and on the right, provocatively the obligation, to go FAST to the next potential case.

The current tick-in-the box system isn’t working as it should, compliance officers are losing their energy by over-working on cases that they should close FAST if any wrong doing isn’t detected.

With the obligation to protect their employers, by adding multiples layers of useless information as their employers should demonstrate the efficiency of their AML organization, everything is getting SLOW, everything but the criminals.

To compensate for the routine of a very administrative job description the training sessions are going over the top in describing the importance of the work, infantilizing the compliance officers.

We need to show more respect:

  1. To the compliance officers, by allowing them to go faster to the next suspicion
  2. To legitimate business owners, by stopping the inconveniences    
  3. To the public, by changing the system and so increasing the efficiency

Top 3 reasons why Hong Kong banks reject applications

Banks reject applications

Do you have plans in opening a bank account in Hong Kong? well were telling you now it’s not a walk in the park. Banks reject application more often these past few years, and we’ve seen this personally due to the influx of clients going in at our doorsteps to ask for help in opening their bank account in Hong Kong because they were rejected by other banks.

To put a reality into this, we have compiled several factors that will affect the application for a bank account in Hong Kong, and what are the real reasons why most of these banks are rejecting these applications.

Nationality

This may sound fishy but this is not an exaggeration, nor it is an unfair disadvantage. A lot of people belonging to high risk countries can find it hard to open a bank account in Hong Kong, and this is already expected by the people themselves. Under this predicament, controlling persons of a company is also affected by this since directors, shareholders and authorized signatories are part of the corporate substance and their nationality could also be a hindrance into the application process. Aside from this, companies and businesses who have clients and suppliers in high risk countries could potentially be a problem in the application process.

If you do not meet the criteria for a low risk client with significant financial assets, then you will eventually be rejected by any bank in Hong Kong. Oftentimes, even if you meet or go beyond the required initial deposit by most banks, it’s still not a guarantee that you can secure a bank account approval.

Applicants belonging to high risk countries (e.g. Iran & North Korea) and monitored jurisdictions will find it hard or even impossible to secure an approval. Just to give you a bird’s eye view and some example, as of February 2020 these countries are belonging to the FATF increased monitoring list:

  • Albania
  • The Bahamas
  • Barbados
  • Botswana
  • Cambodia
  • Ghana
  • Jamaica
  • Mauritius
  • Myanmar
  • Nicaragua
  • Pakistan
  • Panama
  • Syria
  • Uganda
  • Yemen
  • Zimbabwe

Anti-Money Laundering and Counter Terrorism Financing (AML-CTF) has something to do with this situation, since there is significant chance that nationals who belong to these countries are more prone to committing money laundering activities and terrorist financing. In fact, some banks in HK have a pre-existing list of nationalities that are banned from applying for a bank account.


    Vauge, unusual & high risk business activities

    Your business activity can play a big role in your approval. Most banks in HK are keen on onboarding clients belonging and engaging in trading activities since they deem this form of business as an ideal and favourable entity, considering that this form of business activity possesses a lot of credible business documents that would be easily justified by way of import or export proofs, bill of lading, supplier agreements and plenty of other things.

    Just like nationality, high risk business activities can block your chances of securing an approval since some industries are well regulated, if not considered to be extremely risky. Business activities such as:

    • forex trading,
    • bitcoins / cryptocurrency,
    • oil,
    • gas,
    • precious metals and stones,
    • as well as mining activities,
    • online gambling / casinos

    are considered to be high risk. These industries are marked high risks due to their perilous nature and tendency to lean on AML-CTF issues. However, this should not discourage you, because if you haven legitimate documentation that supports your business activities as a legit entity with a valid business activity then this could help you in the process, and all you have to do is to acquire an exceptional service provider just like us to guide you through the process since we know which bank accepts or rejects clients depending on their industry.

    Insufficient or weak documentations

    Documentations to evidence that you have a legitimate business is a primary factor, if not, a very important aspect of the application. You will need to present undisputable and credible proofs to show and validate that your business is running a lawful business. The requirements would range from company/business invoices, client contracts, supplier agreements, updated bank statements, company presentations, and other strong proofs or documents that would evidence that you are running a legit business. In general, the stronger your documentations are, the higher the chances of securing an approval.

    Once you collate all your documentations, the bank will then evaluate all the submitted data and perform Customer Due Diligence (CDD) and Enhanced Due Diligence (EDD) to dig out any irregularities. This practice is common and a standard with Hong Kong banks.

    For companies falling under the category of newly incorporated entities would have a different process to undergo since the burden of proof that you have a credible business relies upon your ability to provide evidence that you will be running a lawful company.

    Our thoughts

    The process may be hard but we have a solution in all issues pertaining to the rejection of applications in Hong Kong banks. Regardless of your current situation, we can create a solution for you and your business that can help you secure an approval with any banks in Hong Kong since we know which banks works best for any type of clients. We have the experience and first-hand knowledge to know which banks could work with you and give you an approval depending on your nationality, business activities and documents. In other words, we can align our clients to the bank that will surely approve their application since we know what these banks are looking for, and what kind or types of clients it onboards.

    To increase your chances of getting an approval for a bank account in Hong Kong, feel free to Contact Us!