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!