Open offshore business accounts in Canada

Kirstie Lau7 minutes
Business tipsGuides
Open offshore business accounts in Canada
In this article

Canada is one of Hong Kong's major trading and investment partners. By setting up offshore accounts abroad or opening Canadian offshore accounts in Hong Kong, businesses can significantly cut down on currency exchange costs and hasten the process of money transfers, thus fostering greater collaborations between the two parties. This article will provide a detailed breakdown of the procedures, requirements, and benefits associated with Canadian offshore accounts for businesses. Additionally, we will introduce Airwallex, a leading global financial platform for modern businesses, offering trusted solutions to manage everything from payments, treasury, and spend management.

Benefits of having a Canadian offshore account

According to Statistics Canada, as of November 2023, Hong Kong ranks as Canada's 10th largest export market and plays a pivotal role in Canada’s Foreign Direct Investment locations. 

The close economic and trade relationship allows small and medium-sized enterprises (SMEs) to trade with Canadian suppliers or companies. With a Canadian offshore account, SMEs can reduce the impact of Canadian dollar (CAD) exchange rate on their profits. 

Moreover, SMEs can directly use CAD in their offshore accounts to pay local bills or receive payments, thereby bypassing the costs associated with currency conversion and various transaction fees linked to international transfers.

Banks offering offshore account services often allow the option to hold deposits in multiple currencies, simplifying cross-border transactions and international payments. This feature is particularly beneficial for SME customers involved in international business, as it helps foster trust and cooperation opportunities with global partners, ultimately increasing the market share and boosting international competitiveness.

How do I apply for a bank account in Canada?

To open a personal bank account in Canada, applicants must provide original proof of identity.

Option 1: Provide two pieces of ID documents that clearly indicate your name and address, and name and date of birth. Acceptable forms of ID include: government-issued ID, the recent notice of assessment (NOA), the recent benefit statements (all from the Canadian government or provincial government), recent Canadian utility bills, etc.

Option 2: Provide a document from a reliable source that can state your name and date of birth. This document needs to be recognised by the bank as coming from a reputable customer or someone with a good reputation in the community where you are opening an account.

Different Canadian banks have varying requirements for opening business accounts for sole proprietors and companies. Some banks cater to non-residents, and some require the applicants to be of legal age. It's crucial to check the specific details on each bank's official website. For example, RBC is straightforward and has an online application service. Non-Canadian residents can apply by selecting "No" to the residency question. 

To open a business account, applicants need to provide one of three government-issued Canadian identification documents – either a Canadian passport, a driver's license, or a permanent resident card. Additionally, business registration documents, such as articles of incorporation or the business license, are required. Once the account is created, users should set up their RBC online banking, choose a customer card PIN, and they can begin using their account immediately.

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Comparison of Canadian bank accounts

Businesses can also open Canadian offshore accounts through banks in Hong Kong* with the relevant services. Taking Citibank as an example, an appointment must be made online and the applicant needs to visit a branch to complete the process. To access International Personal Banking for offshore funds, the applicant must have a Citigold, Citigold Private Client, Citi Priority or Citibanking Wealth Management account.

As for HSBC, due to the merger of HSBC Canada into RBC on April 1, 2024, it no longer conducts business in Canada and therefore does not offer Canadian offshore account services.

Bank Account opening fee Other charges Minimum deposit
Royal Bank of Canada (RBC) None As low as CAD $6 per month None
Bank of Montreal (BMO) None None None
Citibank^ None Citi Priority / Citibanking: HK$400 per month
Citigold / Citigold Private Client: HK$500 per month
(Can be exempted if specified conditions are met)
Citi Priority / Citibanking: None
Citigold / Citigold Private Client: Daily average balance of HK$1.5 million
HSBC This service is no longer available. As of April 1, 2024, HSBC Canada has officially merged into the RBC.
^Applicable only to individual customers with non-Hong Kong addresses and corporate customers registered outside of Hong Kong.

*As of May 6, 2024. The information provided is for reference only. Please visit the official websites of respective banks for more details.

The requirements, documentations, and processing time for traditional Canadian banks

Opening an account in Canada is subject to Canadian legal regulations. Typically, individuals are required to present two pieces of valid identification. Acceptable IDs include passports, the Confirmation of Permanent Residence, foreign government-issued IDs, or a driver's license. The exact documents required may differ based on the bank and whether the applicant is a sole proprietor or a corporate owner.

For example, RBC requires businesses to come with registration documents, such as a certificate of incorporation or a business license, with the online application process taking roughly 15 minutes. On the other hand, BMO may ask sole proprietors for business registration, business license, and proof of identity. If the business has been operating for less than 18 months, additional documents such as the complete articles of incorporation, company license, or company reports may be required.

Restrictions on offshore accounts in Canada 

Opening an offshore account in Canada through a Hong Kong bank typically takes a minimum of two weeks for approval. Certain banks may mandate a visit to a local branch in person for account activation. Additionally, offshore accounts often come with minimum deposit requirements and monthly fees.

For businesses involved in international transactions, the lack of a robust customer service or reliable online banking platform from the offshore bank can adversely affect business operations. Therefore, it is crucial for businesses to select a bank that boasts a reputable international banking service and a dependable online platform. This ensures seamless operations and efficient management of offshore accounts, facilitating smoother international financial transactions.

Business transfers: Third-party platforms vs. offshore accounts

As SMEs expand globally, the speed of transactions, FX rate and remittance fees have become key considerations in managing payments and billings with customers and suppliers around the world. 

Besides the previously mentioned Canadian and offshore bank accounts, Airwallex, a leading global financial platform for modern businesses, provides same-day fund transfers, competitive FX rates, SWIFT-free global remittance, and collection services. This platform aids SMEs in reducing operational costs and supports their expansion into additional countries.

Airwallex Offshore accounts
FX rate As low as 0.2% above the interbank rate Follows live FX rates and are usually higher
Processing time Nearly 70% of transactions are credited the same day Same day crediting might not be possible
Charges Money transfers to 110+ countries through local transfers, eliminating SWIFT charges Charge a certain percentage of the transferred amount, plus a fixed remittance fee

Airwallex Global Account

Airwallex offers trusted solutions to manage everything from payments, treasury, and spend management to embedded finance. Through their Global Account, businesses can open virtual business accounts instantly, free of account opening or monthly service charges. Companies can now accept payments in 23+ currencies from over 60 countries. 

A standout feature is the CAD Global Account, created in the name of the company with no transaction limits. This allows businesses to receive direct payments from Canadian entities, bypassing exchange fees and significantly cut down on operational costs. 

Furthermore, the Global Account allows businesses to collect payments in various currencies from international clients, streamlining the process of paying global suppliers or managing international payroll. This feature not only facilitates financial operations in those currencies but also offers considerable savings on exchange fees.

Last but not least, Airwallex allows businesses to transfer funds in over 60 currencies to more than 150 countries at leading market FX rates, with nearly 70% of these transactions credited on the same day. 

Open a global multi-currency account for free in Hong Kong

FAQs

1. Can I apply for a Canadian offshore account in Hong Kong? 

Yes, you can. Some local banks in Hong Kong provide services for opening Canadian offshore accounts, such as Citibank. Businesses can also open a Global Account with Airwallex. This allows businesses to swiftly open an account for collecting and transferring CAD.

2. What are the risks of opening a Canadian offshore account? 

Due to the fact that offshore accounts are only regulated by the regulations of the account's location and not the original jurisdiction, funds held in offshore accounts are no longer protected by the HK$500,000 Deposit Protection Scheme of Hong Kong Deposit Protection Board.

3. What is the minimum deposit requirement for a Canadian offshore account?

Different banks have varying requirements for minimum deposit. For example, RBC and BMO have no requirement, but Citibank's Citigold account requires a daily average balance of HK$1.5 million. In contrast, Airwallex Global Account does not have any minimum deposit requirement and no transaction limit.

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Kirstie Lau
Senior Associate, Growth Marketing

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