Requirements and procedures to open an SME bank account in Hong Kong
- •Has opening an SME bank account become more challenging in Hong Kong?
- •A step-by-step guide to SME bank account opening
- •What documents do you need to open a business bank account?
- •Documents needed to open a business bank account –– Business Registration and Proof of Business
- •Suitable local business bank accounts for SMEs in Hong Kong
- •Eligibility of local SME bank account application
- •Airwallex: Competitive advantages over traditional and virtual banks
Opening an SME bank account is the first step for any business –– an SME bank account is not only a token of confidence to your customers and suppliers, but also a portal to connect to third-party online payment gateways to increase the rate of successful payments. Rumour has it though, that opening an SME bank account in Hong Kong is increasingly challenging. Read on to find out everything you need to know about opening SME bank accounts in Hong Kong.
Has opening an SME bank account become more challenging in Hong Kong?
To keep abreast of the international effort to combat money laundering and tax evasion, Hong Kong Monetary Authority has already tightened its grip on banks and financial institutions since 2012. Inevitably, opening SME bank accounts has since become more complicated.
KYC (Know Your Customer) is arguably the most frustrating procedure of all. As part of compliance due diligence, KYC is for banks to fully comprehend their customers’ nature of business, source of income, location of operation, and auditing practice. For this, SME owners have to prepare a meticulous set of documents and supporting evidence; some banks even request a face-to-face interview with their SME specialists, creating extra pressure on SME owners.
A step-by-step guide to SME bank account opening
Before the rise of FinTech, SME owners need to first book an appointment with the bank by calling, then show up at the appointment with a pile of documents for review, and sit tight for weeks or even a month for a decision - whether or not your request for a business account is approved.
Lucky for us now, FinTech and online banking have already gained momentum, propelling even the most traditional banks and institutes to enable online account opening. SME owners can simply go on to the bank’s official website, select the most suitable type of business bank account, fill out the application form, and upload the necessary documents –– all in the comfort of their own home or office.
What documents do you need to open a business bank account?
The devil is in the details. Opening an SME bank account may have become easier with the help of technology, if you upload the wrong document, all your time and effort invested will, unfortunately, go down the drain.
Documents needed to open a business bank account –– Business Registration and Proof of Business
What constitutes a valid Business Registration?
Make sure your Business Registration is within the validity period when you apply for a business bank account. Some banks require that the Business Registration includes the nature and scope of your business.
What is Proof of Business? How is it different from a Business Registration?
Regardless of your chosen type of business or corporate bank account, Proof of Business is an essential document for account opening. In general, Proof of Business refers to any document that proves a company conducts legitimate business activities, such as invoices, sales agreements, employment contracts, and office leases.
Business Registration, on the other hand, is issued by the Companies Registry. All businesses –– sole proprietorships, partnerships, limited companies, and overseas subsidiaries –– must register with the Companies Registry within 30 days of the start of business operation. The HKSAR Government will administer tax collection and audit exercises based on this public information.
Why do we need to prepare these documents for business account opening?
In short, this is for the sake of combating money laundering. When opening an SME bank account, as part of due diligence, banks need to go through the KYC process and perform ongoing monitoring. The documents are therefore needed for the banks to understand your nature of business and source of funds. Some banks may even ask about your business’s average transaction volume, monthly transaction amount, and the like to further understand the operation of your business.
Suitable local business bank accounts for SMEs in Hong Kong
There is no shortage of business bank accounts specifically catered to the unique needs of SMEs. In fact, as banks compete for SMEs to open accounts, they often offer low (or even no) minimum deposit requirements, nominal monthly fees, additional services, and other special offers. We have handpicked 8 local business accounts for you:
Requirements of different SME bank accounts
*Eligible for applicants who meet the requirements of online identity verification only. Last updated on 7 August 2023. Please refer to the official websites of the banks for details.
^Face-to-face appointment is required after submitting the application online.
‘Waived if the deposit meets the minimum requirement.
Eligibility of local SME bank account application
Standard Chartered offers easy account opening services for SMEs established for less than 3 years. The annual transaction limit is HK$2 million, with a quarterly limit of HK$500,000.
According to the official website of DBS Bank, any limited company, partnership, or sole proprietorship registered and established in Hong Kong is eligible for a DBS Business Account.
Specially designed to cater to the needs of local startups and SMEs, HSBC’s Sprint Account requires companies to be registered and operated in Hong Kong with an annual transaction limit of US$3 million. In addition to that, the company has to be established for no more than 3 years.
The Integrated Business Solutions Account is suitable for businesses with steady growth. Although the minimum deposit requirement is a stiff HK$100,000, it is nonetheless a comprehensive banking and financial solution for SMEs, with free payroll services and multiple financial management tools.
Biz Virtual+ Account, on the other hand, is perfect for startups or newly established SMEs. To apply for this business account, all directors, shareholders, and authorised signatories must hold a valid Hong Kong Identity Card. The company must be established, registered, and operated in Hong Kong, with a daily online transaction limit of HK$200,000. Worth noting, that Biz Virtual+ Account holders are not entitled to Hang Seng business e-banking services; you will need to apply for one separately.
The requirements of applying for a Bank of China Business Integrated Account are no different from the other banks. However, if you hope to complete the application online, you will need to be eligible for its Remote Account Opening Service: the company is registered in Hong Kong; all directors, shareholders, and authorised signatories must hold Hong Kong Identity Card; the total number of directors, shareholders, and authorised signatories must not exceed 10.
If you cannot meet any of the above conditions, Bank of China may arrange a face-to-face appointment with you based on your application.
You may expect to go through similar procedures when you apply for a business bank account at BEA prepare all the necessary documents (Business Registration, HKID, etc.), book an appointment online, and officially kickstart the process of opening an SME bank account.
As a virtual bank, ZA Bank has a list of unambiguous application requirements for its business accounts.
For sole proprietors, your company must be registered and operated in Hong Kong. The owner must hold a Hong Kong Identity Card. Most importantly, the tax jurisdiction of the company can only be in Hong Kong.
For partnerships, apart from the above, ZA Bank also states that all partners must be natural persons (not companies or legal entities) and general partners (not limited partners). The number of partners cannot exceed 3.
As for limited companies, you will need to meet all the requirements above, and the total number of shareholders and directors can only be 4 or fewer.
Airwallex: Competitive advantages over traditional and virtual banks
Backed by the new generation of financial technology, Airwallex offers much more than local banks.
As a global payment company, Airwallex works with over 60 banks and financial institutions globally to offer fast and secure international transfer services. In other words, Airwallex will never limit the location of your business operation –– in fact, we are here to facilitate your global expansion. When you use our Multi-Currency Global Accounts to conduct foreign transactions, initiating international remittances is just as easy as making local transfers.
Airwallex also offers a full suite of financial technology products, including Borderless Cards. You can bypass the complications of applying for a corporate card through traditional banks, and create virtual employee cards instantly within a few clicks. Set spending limits for company expenses, eliminate the trouble of reimbursement altogether, and take 100% control of your operational budget. You can also connect our Borderless Cards with Apple Pay and Google Pay, to easily handle both online and offline payments.
Sign up for free for our Airwallex Global Account today to unlock your business potential.
Can I still open a Hong Kong business account if my company is registered in mainland China or overseas?
Most traditional banks offer business accounts for mainland China and overseas companies, but the type of account will be different from what we covered above.
Alternatively, you may consider applying for a business bank account through FinTech platforms. Airwallex operates in over 150 countries, empowering you to open a multi-currency global account based on your company’s registered location. No matter where you are, making international transfers and payments is just as easy as initiating local transfers.
When opening a business bank account, are the requirements different for sole-funded and crowd-funded companies?
Normally, the requirements for sole-funded companies are relatively simpler: you can kickstart the account opening process with your identity document, Business Registration, and the Business Registration Application Form (Form 1(a)).
For crowd-funded companies such as partnerships and limited companies, you will need to submit the identity documents of all partners, shareholders, beneficial owners, and authorised signatories. If your company is a limited company, you will also need a separate set of documents including theReturn of Allotment, List of Board of Directors, Certificate of Incorporation, Memorandum And Articles of Association, and so on.