Pedro Pinto December 9, 2021 1:58 pm

Getting access to financial services in Hong Kong: what to expect

5 things to know about setting up a business bank account in Hong Kong

Hong Kong has long been hailed as one of the best places in the world to do business.

It’s easy to incorporate a company, taxes are favourable, and the city attracts businesses from all around the world. However, one commonly overlooked aspect of starting a company in Hong Kong is its not-so-friendly banking system for startups and SMEs.

Many entrepreneurs looking to set up in Hong Kong are taken aback by how difficult it is to complete the next step after incorporation: getting access to financial services.

If you’re looking to get access to financial services in Hong Kong, here’s 5 things you should know in advance about the process (plus a smart alternative which will solve all these issues!).

1. You do have to come to Hong Kong in person 

Many international entrepreneurs want to set up a company in Hong Kong to take advantage of its favourable business ecosystem, but don’t want to (or can’t) do it in person. .

Hong Kong is well-known for its fast and straightforward company formation process: You can register your company online, and it typically doesn’t take longer than a week or cost more than 1000 USD.

After you set up your Hong Kong company, however, you’ll have to find financial services that suit your needs. And the process is far from digital for many banks.

In the banking world,  you will likely have to make the trip to Hong Kong, since Hong Kong banks require an in-person application. If your company has multiple directors, they all need to be present.  What’s more, you’ll need to take physical copies of your business documents with you.

So, while you can set up your Hong Kong company from abroad, you should keep in mind that if you intend to open an account with a bank, you’ll have to come in person.

Don’t worry, keep reading as there are fully digital alternatives!

2. The process can take anywhere from one month to half a year

One thing we’ve heard from many of our customers is that the bank account opening process can take an incredibly (not to mention unpredictably) long time.

First, you have to make an appointment to come into the branch which must be a few weeks in advance. Then, after your in-person appointment, it’s a long wait that can take anywhere from a month to half a year.

The uncertainty is frustrating for entrepreneurs that don’t reside in Hong Kong. Especially if you have to arrange trips to come back for second and third interviews with the bank (as is sometimes required).

When you’re ready to launch your business, the last thing you want is to be waiting for months on end just to set up a bank account.

Don’t worry, there are alternatives that take days not months!

3. You may be rejected more than once

If you want to access banking services in Hong Kong, you should be prepared to face rejection. A far too common experience for many new business owners is getting their applications repeatedly rejected by the banks.

Why? There are a variety of reasons this might happen to a new business, and these are just a few:

  • Banks want to have a fair degree of certainty that you’re going to make them money. However, given their very high costs of infrastructure, if you’re a startup and haven’t even officially launched your business, you are not going to be aligned with their expectations.
  • Additionally, according to the Hong Kong Monetary Authority, many of the start-ups who are unable to open accounts in Hong Kong have high-tech products or an unconventional/new business model. In other words, these tend to be businesses that are doing things differently than the ones banks are used to seeing and serving.

Even if none of the above applies to you, many small businesses still find themselves having to apply to multiple banks before successfully being able to open a business account.

Don’t worry, there are more certain alternatives. 

4. Be prepared to have enough for up-front fees, minimum initial deposits requirements, and monthly required balances

While incorporating a company in Hong Kong is relatively inexpensive, finding access to financial services is not.

Many banks may charge appointment fees (for the initial in-person interview) and other application fees. Processing fees can be up to 10,000 HKD if your business is incorporated outside of Hong Kong.

Then once you’ve been approved for a business account, you’ll be required to make an initial deposit. For example, many banks charge an initial minimum deposit of 10,000 HKD, and a monthly minimum balance can range from 50,000 HKD to 500,000 HKD.

For many new businesses, this can be quite a hefty amount and is not always in reach. So when you’re getting financial services, make sure you’ve set aside some cash to devote to the process.

Don’t worry, there are options with no initial deposits and no fees!

5. Even if you get a bank account, it may be difficult to secure a corporate credit card 

You’d expect that after the lengthy process a bank goes through to open an account for you, securing a credit card from them wouldn’t be much of a problem – this is, again, unfortunately not the case.

Securing credit, even something as basic as a credit card, is often another long process. While you may have a corporate bank account with that bank, that doesn’t guarantee you a credit card with them. Similar to getting the bank account itself, it often involves months of waiting, and can still end in rejection.

Entrepreneurs often have to look for alternatives, or use their personal credit cards in the meantime for online expenses.

Don’t worry, there are ways to access corporate virtual and physical cards immediately!

Here’s why SMEs and startups should sign up for a Neat Account instead

Needless to say, if you’re a startup, or indeed an SME it is not a fun process to secure banking services in Hong Kong. Frankly, it’s complicated, costly. It doesn’t feel at all in-tune with how modern digital entrepreneurs work.

At Neat, we’ve built our Neat account for today’s entrepreneur – digital, unbureaucratic, modern and fast, from start to finish.

  1. There is no need to come to Hong Kong in person.  With Neat, from set up to daily use, everything is digital. Yes, that means the entire application process can be completed online. This is especially attractive to business owners who rely on being able to incorporate online, and prefer to conduct every step of their set up digitally.
  2. Account can be set up in a week. You’re ambitious and you move fast – so do we. Neat’s foundations are modern technologies and processes. So we’re able to complete robust compliance reviews in just a fraction of the time when compared with incumbent banks, without sacrificing any of the rigour.
  3. We don’t turn away applications just for being small. As entrepreneurs ourselves, we understand that sometimes it just starts with a great idea. Besides, our infrastructure cost base is substantially lower than a bank. We’re best placed to support these ideas. We won’t turn an application down simply because you haven’t yet figured out how your business will pan out in the long run.
  4. Signing up to a Neat Account is free. There’s no minimum balance, no up-front fees, and no monthly minimums either. In fact we lay out all our pricing transparently on our website.
  5. Neat Business customers can easily get Neat Visa cards for business spending – online, offline, and all around the globe. They’re available in physical and virtual, in HKD (with USD coming soon) and connected to the Neat Business App for easy expense tracking.

And on top of all this your account is all managed by an easy to use dashboard, which includes third party integrations so you can manage your cash flow, with companies such as Xero and Stripe. 

We built Neat from scratch in order to take advantage of modern technologies to streamline old processes and lower costs that banks are still stuck with. That means we can do much of the same things faster, cheaper, and without sacrificing any regulatory standards.

Starting a company and need access to financial services?

Join the thousands of entrepreneurs launching their global businesses with Neat.

Click here to learn more and apply today!

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