If you have been in the Hong Kong market for some time, it is important to appreciate the high rate of corporate bank accounts termination. The Hong Kong administration is determined to ensure that no fraudulently acquired cash will enter its system. The scrutiny done by banks has found many accounts wanting and, therefore, getting them terminated. In this post, we take a closer look at the main reasons making bank accounts terminated.
- Working with clients from high-risk countries. Hong Kong maintains a list of countries that it considers high risk on its immigration website. People from such countries are not allowed to enter Hong Kong or even hold an offshore account. Now, Hong Kong administration has insisted that it will not deal with businesses having clients from such high-risk states. This means that if some of your clients are from Somalia, Democratic Republic of Congo or North Korea, the chances are that your corporate bank account will be terminated.
- Failing to provide clarifications sought by the bank. Banks in Hong Kong do not simply relax and facilitate cash flow through your business account. Rather, they carefully monitor to ensure that only the agreed quantities enter into the account. If a lot of cash suddenly hits the account, it will be suspended to get involved in fraud. If you do not clarify the additional cash on time, the account could get terminated.
- Getting involved in crime and fraud. The Hong Kong administration shares intelligence with financial institutions on main criminal networks, fraud schemes, and even terror cells in various countries. If your account has any indication of association with these networks, it raises the red flag and could get terminated immediately. It could also become the center of investigations with related criminal activities.
- Going outside the organization mandate. While the work of operational compliance is for the Hong Kong administration, the banks in the jurisdiction also watch closely. People who go against their established structure are likely to have their accounts frozen. If your enterprise is a restaurant but most of the funds are coming from export/import business, the bank will start questioning the transactions, and the account could get terminated.
Using agency services for account opening and jumpstarting reapplication after termination
If you are moving to Hong Kong, the first step is registering a business. The second step is opening a bank account that will allow you to start operations in the jurisdiction. Because of the difficulties involved in opening a bank account, it is advisable to seek the assistance of an agency.
Agencies are firms of experts that have been in Hong Kong for many years. They have seen the banking system grow and implement one change after another. They will, therefore, assist you to select the right bank and create convincing documents to help get the account on the first attempt.
The agencies also understand the main causes of bank account termination and will assist you to jump-start the application process again. Do not give up because the account has been terminated; it is time to get assistance from the Hong Kong bank account corporate professionals.