Business China

Challenges of Setting-up a Business in Hong Kong

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joint venture or WFOE in Hong Kong

Hong Kong is one of the hottest destinations for investment in the financial world and offers government support to FIEs that China typically doesn’t. Its strategic location, simple taxation policies and world-class infrastructure are the most compelling variables for companies to move away from Mainland China and start a joint venture or WFOE in Hong Kong.

But for many aspiring entrants, these benefits are overshadowed by the regulatory complexities surrounding as simple a task as opening a bank account.

Due diligence is one thing, but when it comes to opening a new bank account in Hong Kong, small businesses, entrepreneurs and foreign companies face restrictions that are borderline neurotic. In the era of internet and digital technology, it’s highly impractical for a business to operate without a bank account. Essential for both internal and external dealings, bank accounts are a key part of any financial transaction and financial inclusion. Even though the city has a highly advanced and efficient banking structure, opening a bank account is one of the toughest tasks that businesses face.

Opening a Bank Account in Hong Kong

The two main challenges surrounding bank policies in Hong Kong are:

  • Starting a relationship with a potential customer is subject to strict policies set forth by international banking standards.
  • Hong Kong has vowed to crack down on money-laundering, financial terrorism and tax evasion, which results in a majority of applications being rejected—due to an inability to prove financial soundness.

china wfoe

Both individual and small companies have to present and then prove a plethora of ridiculous information such as a copy of a marriage certificate and utility statements apart from presenting standard information such as name, address, tax return, and letters of recommendation, among other things.

While mainland banks in China don’t pose the same problem, many companies have fallen at the first fence while trying to open an account with a Hong Kong bank. The stringent policies work with a risk-based approach that assesses the risks that every customer, company and their potential transactions may present to Hong Kong’s government.

How Can We Help?

To unlock these barred doors, thousands of foreign firms have worked with Business China to open a bank account in Hong Kong successfully. Having a bank account in Hong Kong not only establishes your business as reliable and trustworthy immediately, but it also helps you enjoy better tax benefits and transactional freedom.

From filing documents to providing step-by-step support, you can rely on us to get it done for you! to get in touch with us, visit here!

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