The Reserve Bank of India allows any Indian resident to create an offshore account, despite myths that only the wealthy can do so.
It might not be the most exciting process, but it can be done.
One premier offshore account destination is that of Hong Kong, known for its financial prowess and perks such as low taxes that, by design, make it an attractive place for foreigners to do business.
However, the prevalence of money laundering within the country has forced stringent measures to crack down on this criminal activity with the unfortunate side effect of making it difficult for foreigners to establish an initial account with Hong Kong’s financial institutions.
While it may be difficult, it is not impossible to do so.
Here’s what you should know to open a Hong Kong business account from India.
Incorporate Your Business Within Hong Kong
One of Hong Kong’s major concerns is that your business is legitimate and not a front for money laundering.
That means you will need to provide a lot of credentials both for yourself and your company before a bank grants you an account.
Unfortunately, there’s no way to avoid an eventual physical interview as a final measure to ascertain your identity and validity, although there are measures you can take to ensure that everything is previously established before you are required to make the journey.
The first step is to register your business with Hong Kong.
This is necessary because you will need Articles of Incorporation and a certificate proving your business is a registered entity as part of the account application process.
When you apply for your registration, have made the decision about your company name and whether it will serve as a guarantee or a share-limited entity to determine whether you will need to complete the NNC1G or NNC1 incorporation form.
Next, you will need your Articles of Association and a Notice to the Business Registration Office to complete the application.
When you are approved and receive your formal documentation, you’re ready to start the process of acquiring a Hong Kong account from India.
The Process of Opening an Account
Before anything else, you are going to want to shop around the different banking options in Hong Kong.
You want to find one that provides services that your business needs without fees that can ravage your bottom line.
Here are some considerations when choosing a bank that works for you:
- Some banks operate in India but also have a presence in Hong Kong.
HBRC and CitiBank in particular have reputations for easing the process of opening a Hong Kong account because you can set up an account with them in your own country and once they verify your credentials, they can establish an account in Hong Kong for you.
This saves a lot of time because everything will be set up in advance, but unfortunately, it will not save you that final trip for your bank interview in Hong Kong.
- Your Hong Kong bank is going to require some sort of initial deposit and depending on the bank, it can range from an average of $500 - $10,000 dollars.
- There’s usually a processing fee as well, but some banks will waive this fee for you if you play your cards right. Shoot for this goal, if possible.
- Many banks will expect you to maintain a minimum balance. For business accounts, this can be from $50,000 - $500,000, so if your company isn’t going to be able to sustain a bank’s minimum requirement, you will want to find a better option.
Once you make your selection, you are ready to get the ball rolling.
As you make your official application with the bank, you will need a wide variety of paperwork to meet the KYC (Know-Your-Customer) demands for Hong Kong.
They are going to want proof that you are who you say you are and that your business is legitimate.
Here are documents you will need, although if you have anything else that might prove useful, collect those reports as well and have them at hand.
- A valid passport
- A Director’s ID and/or Hong Kong ID
- A rental lease or property license to establish your company physical address
- Business Registration
- Articles of Incorporation
- Register books, accounting, and transaction data to establish business validity
If your company is a start-up venture or less than six months old, banks will accept a detailed and well-designed Business Plan that demonstrates business legitimacy and goals that encourage success.
The process of setting up your account is complicated and can be stressful.
There’s nothing wrong with finding an expert to guide you along the way.
Many services perform this role, serving as mentors and liaisons with banks to ensure that you are successful in setting up your Hong Kong account.
As these businesses have done this many times, they can assure you of what you need to have and can speed up the application process.
The Final Interview
The Hong Kong banks are going to expect you to represent yourself professionally when you arrive for your final interview.
That means that you should dress the part in formal attire and be well-prepared and comfortable in holding discourse about your company.
Your goal is to assure them that you know what you are doing and that your business is not only legitimate but also a service that they will want to have as a business associate.
You will need to have thought-provoking and intelligent discussions so do your research and study up on any details you expect they will want to know about your business.
Once more, there are advisors available that can give you detailed information about what these interviews typically involve and will provide best practices to ensure that you are successful.
After you impress the bank representatives and are approved, if you have established an account previously with an Indian bank, you should be ready to go once they activate the account.
If you did not, you may need to wrap up the process by finalizing details before your journey to a Hong Kong bank account will be complete.