The New Hong Kong Corporate Bank Account Compliance: What Investors Need To Know

A closer look at the banking systems in most countries across the globe reveals they are faced with a myriad of risks. The risks of seizure through lawsuits or getting taken over by the current administrations are very high.

The problem becomes very serious when you are planning an investment abroad only to realize that your cash is no longer available. The best way to go about it is ensuring you open an offshore bank account. This will help your bank to know you more and develop trust.

For years, Hong Kong has won the tag of the best financial hub in the globe. The government has facilitated the banking institutions to excel and blossom. Think of any large institution and the chances are that it has a branch in Hong Kong. But the recent passing of the CRS (common reporting standards) by Hong Kong legislative Assembly in 2017 has changed the entire financial landscape. The new rules are designed to help curb the dangers of fraud, tax evasion, and terrorism.

Three most important things about corporate bank account compliance

A complete declaration of how the investor will use the account

Gone are the days when the bank was known as a deposit and withdrawal platform only. Now, the Hong Kong banks want to know how you will use the bank account. The banks want to understand whether the company will use the account for daily operations, savings, or other specific purposes. You also need to establish the limits that the account will handle. In the event that such quantities are exceeded, the bank might ask or clarifications.

The investor must provide all the details about the enterprise

The know-your-customer principle has become a crucial component when opening a corporate account. The bank wants to have the complete understanding of the company and its operations. It wants to understand the type of clients you are dealing with, the nature of the business, and tax compliance of shareholders and directors.

Immediate follow-up on any suspicious activity

If your account is suspected to have suspicious activity is will be flagged down immediately. You will be contacted to explain why a lot of cash has suddenly hit the account or why deposits are being made from states that do not cooperate with Hong Kong. If you do not provide sufficient clarification, the account could get suspended.

The new rules are targeted at ensuring that no fraud, drugs, or terrorist-related cash enters into the Hong Kong market. The rules are also aimed to help operators work in line with the new CRS framework passed in 2017 by the Hong Kong legislative assembly.