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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How to choose the Best Excavation Services

Regardless of the construction project you intend to undertake whether a full-scale site development or installing trenches on your property for other utilities, you will need to carry out excavation. There is a need to enlist the services of the right excavation contractor considering that excavation is a big job. The high demand for excavation services has resulted in an increase in the number of such contractors in the market, thereby making it difficult to choose the best one. To find an excavation company that will best suit your exaction needs, you may need to look into some aspects as will be discussed here.

One crucial aspect you should look into when selecting an excavation company is the nature of your project. When it comes to excavation, you should keep in mind that not every contractor offers full-excavation services. Since not all excavation companies offer full-service excavation, you may first need to identify your needs considering that you will come across contractors that specialize in less extensive projects such as paving or septic tank installation and also those whose main area of specialization is large scale land clearing. It will be easier for you to select an excavation contractor once you determine exactly what your project goals are, as you will have an easy time narrowing down your option to the contractor that best suits your needs and preferences.

When choosing an excavation company, you should also consider their industry experience. You should settle on an excavation company that has been in that line of business for many years to be guaranteed exceptional services since they know their way around the process. You can establish this by asking your preferred excavation company for a client reference and portfolio.

Before enlisting the services of an excavation company, you should also consider the aspect of licensing and insurance coverage. With the many unscrupulous contractors in the market claiming to offer quality excavation services, you should settle on an a contractor that is validly licensed and insured to protect yourself from incompetent or dishonest contractors. Other than being a proof of legitimacy, a license also shows that the excavation company is qualified, experienced, accountable and committed to service delivery. Considering that the excavation activity is quite a risky undertaking and anything can go wrong in the process, you should ensure that your preferred excavation contractor has liability insurance and workers’ compensation policy to secure your finances. Liability insurance may come in handy in case you incur losses due to damage to your property as a result of the excavation activity as you will be compensated for the damages. The workers’ compensation package will go a long way in securing your finances is a staff handling your excavation project get injured while on your property.

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5 Lessons Learned:

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Great Pool Designs That You Can Incorporate in Your Backyard

Do you think of investing in a pool at your home. It can be one of the greatest investment that you need to be focusing on as this is essential in the recent world. Here are some of the different pool design ideas that you can choose to consider today especially if you are planning to renovate or incorporate a pool at your home today.

In some of the big hotels, you will notice that there are amazing pool designs that have been incorporated. You need to ensure that you choose a design that works very well this time around and this way you will be able to enjoy the best experiences. You need to ensure that you have a large patio that will make you be able to entertain your families as this is matters so much in the kind of investments that you have incorporated in place.

Choose an idea that can help you stay relevant in what you have been working on as this is very important in the experiences that you have been working on this time around. You may need to choose various shapes of the pools from rectangles, square to circular concrete pools. You will need to ensure that you add a few swimming pool tiles as well as umbrellas and tree shade to make it look amazing.

Have you desired to have a swim pool bar like in reports? You need to have your own at your home, and it can become an excellent time for you and your dear ones. It should be enough for you to cool down and relax very well as this is very important in helping you have an easy time.

You may also choose to have fancy tiles. In case you are looking for new ways that can make your pool look more modern, you need to switch to the use of swimming pool tiles. Be sure that you get tiles that will reflect your overall personality, pair them very well with the pool shape that you have invested in. It is vital that you focus on natural ways that you can stay focused in how you have been working like this is very essential, choose one that works very well as this matters so much in this case.

You need to ensure that you select a design idea that works for you very well this time so that you keep your home looking incredible. You know that with the varying choices in the market, you need to know that having a suitable procedure that will work for you today is a significant impact in keeping you focusing on the right direction as this matters so much. Be sure that you keep reading here for the best swimming pool tiles and ideas that can make your pool look fantastic this time around.

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Jewelry That Men Are Allowed to Wear
When you encounter the word jewelry what you immediately think about at first is that this is an item that can only be worn by women. That is why your reaction to your mom’s gift to you of a bracelet is that of a complete surprise. Your immediate thought is that bracelets are only for women. But actually there are jewelry items that men can wear while they are out and about. You can read further to find out about it.
Rings
When one speaks of rings people usually think that the only rings for men that they can wear are their weddings rings. But if you make a quick search about you will find information on the other rings for men. If you search the topic on rings for men on the internet you would easily be able to find out about it.
Another kind of rings for men that men can put on their finger is the signet ring. What makes this ring special is that there are symbols that are engraved on it representing the family that one comes from. That is why they wear it proudly. Another type of ring that men can wear on their finger is their frat ring or university ring.
If you find yourself wanting to wear a ring that isn’t any of those mentioned above of course you have the freedom to do so. But be sure that you choose rings for men that are simple and classic.
2. Bracelets
You might have an idea that such piece of jewelry can be worn by women only but men can wear them too. If you read up on it you will realize that this has become quite a trend for different people recently. There are different kinds of it that you can find being sold today to men.
Beaded bracelets
When it comes to this type of bracelet many men opt to wear the black ones because it makes them look more manly.
Leather bracelets
This is the most widely used type of bracelet among men. It is actually easy to match this bracelet with any outfit.
Bracelet Cuffs
Bracelet cuffs can be made out of different metals. When you wear this then you need to wear it on the arm that doesn’t have your watch.
Watches
This is perhaps the most popular piece of jewelry that men wear. However not a lot of men see their watch as a form of jewelry. There are many designs and styles of watches that are available in stores now for men.
4. Cufflinks
This kind of jewelry is usually worn during formal events such as a black tie event.
5. Tie Clips
These serve the purpose of keeping your tie in place. Just because it serves a function does not mean that it need to be boring. You can make yours not boring by putting an engraving on it.

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