If you want your enterprise to grow faster, the first step is incorporating it in a top foreign jurisdiction. One of the greatest places that have become the best launch pad for success for companies is Hong Kong. It has a very supportive business environment, the registration procedure is easy, and acts as the main gateway to Mainland China.
Once a business is appropriately incorporated in Hong Kong, the next thing should be opening a bank account. This is a very important step because it allows the business to get paid and facilitate payment of its bills. But the process of opening a bank account has become an uphill task after the Hong Kong administration passed the CRS (common reporting standards) to help curb tax evasion and fraud.
The most important things applicants need when opening a bank account in Hong Kong.
The moment you apply for a Hong Kong corporate bank account; the primary goal is ensuring that the bank understands and trusts the presented operational model. This is achieved by presenting the main documents about the business to tell the bank it is legit and ethical. Here, it is important to get out of the way and demonstrate it is ethical. Here are the main documents to use.
- The company’s certificate of incorporation.
- Passport copies of shareholders and directors.
- The expected cash flow after commencing operation s.
- The business structure.
- Demonstration of business activity.
- The certificate of incorporation
Banks carry comprehensive due diligence on top officials
When Hong Kong passed the CRS framework in June of 2016, it opened a new chapter in bank opening. The session of easy bank account opening was gone. The CRS Hong Kong framework introduced a new way of evaluating bank account applicants to ensure they are not aiming at evading tax compliance back at home. Section 17D of the IRD laws classify banks as reporting institutions and obligates them to carry due diligence on all those applying for new bank accounts.
Depending on the information you provide the bank, it will classify you as a reportable or non-reportable party. It is important to have this information before applying for the account. You will require documents that prove you are tax compliant back at home and additional verification. Note that some banks will decline the application if the note you have been avoiding to pay taxes at home.
Demonstrating proof of business
If your enterprise has been in operation elsewhere and wants to expand to the Hong Kong market, the bank will need proof of business. This presents the financial institution to know how you have been operating, the clients, and country of origin. The banks want to filter of bank accounts applied by enterprises with clients from risky countries. For example, if the clients hail from Somalia, Syria and North Korea, the account will be declined. Here are the main documents to demonstrate past operations.
- Contractual agreements.
- Bank statements.
- Certificate of incorporation of the mother company.
- You could also attach accreditations.