How and Why to Open a Bank Account in Hong Kong

Hong Kong today remains one of the best offshore banking jurisdictions. It offers a great combination of bank secrecy, corporate secrecy, a financially and politically stable environment, and strong banks. But perhaps most importantly, it’s a secure offshore investment haven for those who want to diversify out of sinking western currencies into booming Asian markets, and China in particular.

So how can you go about opening an offshore bank account in Hong Kong? Do you have to travel there? This article will answer these questions and give you some practical hints and tips. But first some background.

A Successful Free Market Experiment For East and West Alike

Hong Kong, in my opinion, is the only practical example in the world of a major city that has been developed from scratch and run as something of an offshore, free market experiment – first by the British, then by the Chinese.

The main Island (and later Kowloon and the New Territories, parts of the mainland) was a British colony for most of the nineteenth and twentieth centuries. During this time it grew from a fishing village and opium trading hub, into a city-state of seven million people. It became known as a free-wheeling, free market paradise for capitalists, with an economy characterized by low taxation, free trade and no government interference in business.

In 1997 the British returned sovereignty over Hong Kong to China. The former colony became one of China’s two Special Administrative Regions (SARs), the other being Macau. Many people were initially doubtful about one of the world’s capitalist bastions being run by a communist power, and at the time a lot of investors pulled out, many taking their dynamic business acumen heading to places like Singapore and Vancouver.

However, the “one country, two systems” model adopted by Beijing to coincide with free market reforms and the growth of China into an economic superpower has proven very successful. The Basic Law of Hong Kong, the equivalent of the constitution, stipulates that the SAR maintains a “high degree of autonomy” in all matters except foreign relations and defence. The SAR today operates as a major offshore finance center, discreetly oiling the wheels of commerce between East and West.

These days, rather than being put off by the Chinese influence, most international investors who are attracted to Hong Kong are coming precisely because of this Chinese connection. Hong Kong is the point of access to Chinese trade, without the legal and cultural difficulties of doing business in mainland China.

Those who do not trust their own governments are reassured by the fact that under the Basic Law, Hong Kong’s foreign relations are run from Beijing. While most offshore jurisdictions humbly submit to demands from the USA and other western countries, in the case of China, the relationship is definitely reversed. Hong Kong does have a number of Tax Information Exchange Agreements (see below) but these are sensibly policed and do not allow for fishing expeditions.

Offshore Banking in Hong Kong

The region’s population is 95 percent ethnic Chinese and 5 percent from other groups, but English is very widely spoken and is the main language in businesses like banking.

One thing I like about using Hong Kong for offshore bank accounts is the same argument I have used for Panama and Singapore: it’s a ‘real’ country with real trade going on. The Hong Kong dollar is the ninth most traded currency in the world. Compare this to doing business on a small island or other remote banking jurisdiction, where everybody knows your only reason for doing business there is offshore banking. It also means that there is no problem doing your banking in cash, if you so wish.

For now the HKD, the local dollar, still tracks very closely the US dollar, but this appears to be changing as the Chinese Yuan circulates freely in Hong Kong, both in cash and in bank deposits. We think this represents an excellent opportunity to diversify funds out of the US dollar now, gaining exposure to Chinese growth in the meantime. (Of course, you can also hold HKD in banks in other parts of the world too)

Bank accounts in Hong Kong are almost all multi-currency by default, allowing all major local and international currencies to be held under one account number and exchanged freely and instantly within the account at the click of a mouse.

There is no capital gains tax, no tax on bank interest or stock market investments, and no tax on offshore sourced income. This, combined with a welcoming attitude to non-resident clients in the banks (including US citizens by the way, who are generally unwelcome in traditional offshore banking havens like Switzerland), and strong cultural and legal respect for financial privacy, makes Hong Kong one of Asia’s best offshore banking jurisdictions.

For those who want to establish a small offshore account under reporting limits, or simply to have the bank account established in view of future business, Hong Kong is also attractive given the low minimum deposits demanded by the major banks there. The minimum bank account balance can be as low as HK$ 3,000. Of course, you can’t expect red carpet, VIP private banking at this level – but you get a perfectly good functioning bank account with all the technological trimmings.

Offshore Corporate Bank Accounts in Hong Kong – Do’s and Don’ts

Typically, offshore clients choose to open accounts using corporations, as opposed to personal accounts. This not only offers greater privacy, but also flexibility and can – depending of course on how things are structured – offer significant tax and asset protection advantages.

Accounts can easily be opened both for pure offshore companies like Panama, BVI, Nevis or Marshall Islands, or for local Hong Kong companies that are set up using nominee directors and shareholders.

When contacting local corporate service providers in Hong Kong, you’ll find that most of these corporate service providers will recommend you use a Hong Kong company to open the account. The reason they do this is that it’s simpler and more profitable for them. They can incorporate a local company at low cost, opening the bank account is smoother and faster with a local company, and they can carry on billing nominee director fees every year. But it may not be the right thing for you.

Whilst it is true that Hong Kong companies do not have to pay any tax provided they do not make any local source income, administering such a company is not so simple. For example, Hong Kong companies are required to file audited accounts every year. They must file pages and pages of documents to convince the Inland Revenue Department (HKIRD) that they don’t have any local business, and, from practical experience, the HKIRD is getting much stickier about this. Long-established companies are normally left unmolested but newly established companies can expect a lot of compliance work in their first few years. Again, this suits the Hong Kong corporate service providers who charge handsomely for such services.

Another factor to consider is Controlled Foreign Corporation (CFC) legislation in your home country. (For an explanation see Wikipedia ) Many clients choose to set up LLCs as they can be treated as passthrough entities, vastly simplifying reporting requirements in some countries like the USA. Hong Kong corporations are not LLCs and cannot be treated as passthroughs for tax purposes.

My advice – assuming you don’t intend to do any business in Hong Kong besides banking and perhaps the occasional trip to visit your money – would be to open the account in the name of a company from a foreign offshore tax haven. It’s a little more work and expense at the beginning, and the bank might ask you more questions, but it will save you a lot of money and headaches in the long term. If you want a local look and feel for your company, numerous virtual office services are available.

Hong Kong Tax Information Exchange Agreements

Contrary to what you will read on some out-of-date websites, Hong Kong has signed a number of Tax Information Exchange Agreements (TIEAs). However, the HKIRD is at pains to point out that fishing expeditions are not going to be tolerated.

The HKIRD has issued Practice Note 47, available on the internet, which usefully explains how the HKIRD seek to achieve a balance between the requirements of compliance with the OECD requirements, whilst providing checks and balances to protect the rights of businesspeople.

The HKIRD are professionals and should be well positioned to deal with TIEA requests properly and justly in accordance with the treaties and guidelines. I am confident not going to allow their ‘clients’ rights to be trampled on.

Regulation of Banks in Hong Kong

Hong Kong’s Banking Ordinance was revamped in 1986. It has since undergone several amendments to improve prudential supervision. The Hong Kong Monetary Authority (HKMA) was formed in 1993 as a one-stop financial regulator, responsible for everything from banks to stored value anonymous debit cards.

The SAR maintains a three-tier system of deposit-taking institutions, comprising licensed banks, restricted license banks, and deposit-taking companies. Only licensed banks may operate current and savings accounts, and accept deposits of any size and maturity. RLBs are only allowed to accept deposits of HK$500,000 and above, while DTCs are only permitted to accept deposits of a minimum of HK$100,000 with original maturity of not less than three months.

Both these latter categories provide an opportunity for overseas banks to conduct wholesale, investment or private banking activities in Hong Kong without having to jump through the hoops of applying for a full banking license. In addition, some foreign banks have chosen to open representative offices in Hong Kong, which are not allowed to take deposits but can assist in opening accounts at other offices within their groups.

As Hong Kong is an international financial centre, it is an explicit policy of the HKMA that the regulatory framework in Hong Kong should conform as much as possible with international standards, in particular those recommended by the Basel Committee.

Hong Kong’s five largest banks, in terms of total assets, are as follows:

– Hong Kong & Shanghai Banking Corporation (HSBC)

– Bank of China (Hong Kong)

– Hang Seng Bank Ltd

– Standard Chartered Bank

– Bank of East Asia Ltd.

A full list of updated Hong Kong banks can be found on Wikipedia.

Visiting Hong Kong to Open a Bank Account

If you are visiting Hong Kong to open your account, it can normally be opened the same day provided you have made some arrangements with a local service provider, or directly with the bank, in advance. This is assuming you use one of the major banks, that nearly everybody does. You can then simply visit the bank, sign documents and receive the bank account number immediately. This will be a full multi-currency account and you will typically receive a digital token for internet banking, a password and a debit card.

The documents required for opening offshore bank account are:

1) Formation documents (in the case of corporate accounts. Apostilles are required in the case of foreign corporate accounts – your offshore provider will know how to obtain these.)

2) Bank forms and business plan/expected activity (a corporate service provider will normally supply these as part of the service)

3) Passport copies of each director, signatory and shareholder (take special note of this requirement if you are using nominee directors – if the persons are not present, copies will have to be notarized.)

4) Proof of address (such as updated bill statement which shows up your name and address) and signed (of each director and shareholder)

A bank reference is generally required if you are dealing direct with the bank. If you go through a corporate service provider, they normally write a reference so you do not need to supply a bank reference. However, if you can obtain a bank reference it is better.

Opening an account without visiting Hong Kong

It is also perfectly possible to open accounts without visiting Hong Kong (known as ‘remote account opening’) though this process tends to take substantially longer as banks will ask a lot more questions. In this case, your bank or service provider will generally e-mail you the forms, that you will need to print out and sign.

Depending on the bank, there may well be certain special instructions about how and where to sign – for example, HSBC in Hong Kong will typically request that you have your signature witnessed in the HSBC Bank nearest to you. As with all foreign bank accounts, you should be sure to use the same signature that appears in your passport, otherwise the documents will be rejected.

In the case of remote account opening the bank will normally courier the password, debit card, and token direct to your address in your home country. Then you need to activate them via the bank’s website.

Conclusion

Hong Kong competes very favorably with Singapore, the other Asian banking jurisdiction we favor. If you have not yet diversified your offshore holdings into Asia, you should seriously consider doing so. I hope this article will be helpful in this regard.

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Smart Tips for Choosing the Right Upholstery Cleaning Service

If you keep coughing or sneezing whenever you are inside your house there are high chances that your upholstery needs some good cleaning to restore its hygienic features. This is because your upholstery tends to be the most used part of your house and it collects the most dust, allergens and other disease causing microorganisms as a result. The result is a regular need for the services of professional upholstery cleaning companies from time to time. This is the only way a homeowner can ensure that his or her home has the highest level of comfort for those who live there.

The only challenge for homeowners is trying to choosing the best upholstery cleaning companies in the market. The search is likely to be marred by so many findings, locations and websites of cleaning companies. This makes it hard to choose the best among them. However for homeowners who are aware of what to look for when searching for the most competent companies in the industry the task can be the most straightforward they have ever undertaken. The following are the guidelines that homeowners should follow when they are looking for upholstery cleaning companies.

To choose the right cleaning company check how competent it is. This should be indicated by the nature of upholstery cleaning equipment that the company is using. The best upholstery cleaning company should use the latest tools for ease and efficiency in the cleaning process.

Besides it is important to know more about the cleaners who are employed by the company you are about to hire. The best way to do this is to see how the upholstery cleaning company hires and recruits its cleaners. The way to go is to go for a company that is popularly known to recruit only trained cleaners as well as retrains them from time to time. This ensures that the cleaners who will be sent to offer services in your home have the right professional ethics and they are also conversant with the latest cleaning technologies and techniques.

You will also want to check the duration of the company when it comes to offering experienced services. Ten years is the average period that come offer super quality services. It is also a fantastic thing to consider the background of the company you are hiring. Those companies that have clean historical backgrounds are highly committed to offer super quality services since they have a reputation to protect.

To get connected to the best upholstery cleaning companies click more on this site.

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Things that Children Will Enjoy During Summer Camping

Some children may want to go to camp in summer since they enjoy the experience in such camps. Some people may think that the activities at such summer camps are usually the same of which they will need to know why the children love to go for summer camps. An individual can get some information on what usually happens in summer camps when they visit some sites which offer articles about the same.

Some of the activities will include adventures as there are different places that such children can visit during the summertime. An individual may get some children who would want to visit some warrior camps and have some fun there as well as visit some wizards places to learn one or two things. Some children are usually provided with some roles they can play, which will make the whole experience amazing.

Some children will be interested in singing as well as dancing during the summer camp. Some people may not have an idea of the places that the children would want to go to camp during the summer holidays. Some of the best camps will provide a variety of options of which musical theater may be an option. Thus, some children may use the opportunity to pursue their talent in singing or even dancing, which they will find it easier when they are at the summer camps.

Some children may use the opportunity to learn how they can play various instruments which will also be part of developing talent. Some children may also be interested in reading of which they will have a variety of books in such summer camps. It will be easy for such children to read and get all the necessary knowledge about poetry among other skills during the summer camp.

Aside from dancing and singing, some people may send their children to some rock star summer camps which they will find interesting, especially when they are music genius. It will be an easy way for the children to experiment on different instrumentals as well as singing which will make them have a good time at such summer camps. For the children who are interested in science, they will get some summer camps which will offer such activities.

Choosing the right camp for the child will help them increase the knowledge they have learned in class as they will have a better environment to experiment of some of the theories learned. It will require an individual to find some of the unique camps that will provide some of the above ideas so that they can take their children to have some good time.

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Factors To Consider Before Ordering Food Online

Most people order food online nowadays. The reason behind the ears is the development over the years to be an easy experience since one can easily order from home. In an average city there are over twenty online food delivery services indicating that this is a growing market. It is clear that a lot of people use these services. Even though these services are readily available, it is important to know how to choose one that will offer the best and quality services. In the article below we shall discuss the factors that one should consider in order to make an informed decision on where they would like to order the online food.

An important factor to consider is the location of the service provider. In case an online food delivery services far from home it will take a longer time to arrive than one that is close. In order to determine the location one can consider what they want and the nearest delivery service that offers exactly that. Taking into account the amount of time it will take for the food to arrive is paramount. In an emergency, it is not advisable for one to order food from a service provider that is quite a distance from their location. A person should consider making another choice of food is what they want is not as close as they would have liked it.

It is important for a person to consider the mode of payment that is offered. Modes of payment differ from one online food delivery service to another. Most online delivery services offer most or all modes of payment available in the city or country. However, others offer very limited options for payments. Before even ordering it is important to know what options are available for payment so that they can know whether they can pay for the services. Most developed online food delivery services have a variety of payment methods to choose from.

Furthermore, it is important to consider the store schedule. Some stores open from ten in the morning. and others open earlier or later. A person can order food from an online delivery service by calling or ordering in advance from their website. If it is an emergency they are advised to order from the store’s website as this is an advanced order and the staff will work on it as soon as they arrive. Having the store schedule will also help the person estimate how long the food will take to be delivered.

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