If you are doing foreign trade business in China, you might need an HK account in that it is really convenient for payment and settlement. But under CRS and crackdown on money laundering in recent years, it seems much harder to open an HK account.
December, 2016: HSBC was suspected of money laundering, and had to pay 1.92 billion USD to US Federal and local authorities as a reconciliation payment.
August, 2014: Standard Chartered was forced to pay a penalty of 300 million USD because of its poor monitoring system of money laundering.
July, 2015: Citi Bank subjected to a penalty by the government of 140 million USD due to its negligence in combating money laundering.
November, 2016: Agricultural Bank of China (ABC) was accused of breaking regulations of anti-money laundering in New York City, and withholding the information from the stock exchange with Russia. ABC was imposed of a penalty of 215 million USD.
Key To Open HK Accounts
Even though the policy seems much stricter, you still have ways to open HK accounts! So here are some suggestions for you!
❶ Keep all original contracts with suppliers.
❷ Keep all original contracts with foreign buyers. Cooperation and payment details should be clear in each contract.
❸ Contract No. or the batch No. should be written in the remark column when there is payment with the supplier or the foreign buyer.
❹ If you need to transport cargoes, you’d better use your HK or Chinese company name as the consigner name. Or if you entrust a freight forwarding agent, remember to sign a commissioned agreement with clear charges items on it.
All of these “proofs” will make it more accessible to an HK account!
Importance of HK Accounts
Each of you who do foreign trade business in China realize how important an HK bank account is. With an HK bank account, you can:
❶ Receive USD in a more convenient and secure way;
❷ Prove that your company is good and trustworthy;
❸ Exchange foreign currency at lower exchange rate;
❹ Pay less tax because only corporate incomes from HK need to pay tax.
Things Needed To Pay Attention To
When you are using HK bank account, there are several things you need to pay attention to:
❶ Remember to keep payment contracts and invoices. (Capitals from war zones such as Syria, Iraq, Afghanistan cannot be transferred via HK bank accounts.)
❷ If there is a transfer record of huge sums of capital, the bank officer might confirm it with you and you will be required to submit related documents to prove the legality of transfer.
❸ You are not allowed to deposit and then withdraw the money on the same day. In addition, you should keep a certain amount of balance in the HK account.
❹ If the company which your company transfers money to is not in the same industry as the industry your company is in, you also need to submit documents to prove the legality of transfer to the bank.
❺ If you have transfer records with company which transfers money via illegal private bank, you might also be at risk of being suspected of illegal involvement.
❻ If there is any suspicious, the bank officer will contact you via e-mail or phone and require related documents to confirm your financial condition is normal. Otherwise, the account will be frozen.
HACOS has helped more than 2000 foreigners successfully establish companies in Hongkong and open HK bank accounts. HACOS is always devoted to giving the best services to each foreigner who wants to start up their business in Hongkong with the most professional experience.
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