Hong Kong Company Bank Account Rejected? Common Reasons and How to Prepare
Rejected applications for a Hong Kong corporate bank account usually come down to customer due diligence. Based on the HKMA's list of information banks need: the common reasons, what to do after a rejection and what to prepare before applying.
For many owners, opening a corporate bank account is the first real hurdle after setting up a Hong Kong company. Understanding how banks assess an application works better than applying to bank after bank.
Why banks carry out due diligence
According to the Hong Kong Monetary Authority (HKMA), banks in Hong Kong must carry out customer due diligence and ongoing monitoring on new and existing customers under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615) and the HKMA’s guidelines. Some banks must also meet requirements set by their head office or overseas authorities, so account opening requirements differ from bank to bank.
Common reasons for rejection
In practice, these due diligence issues come up most often:
- Unclear business and account purpose: the HKMA lists that banks look at the purpose of the account, expected account activity, nature of business and mode of operation. “Trading” with no detail of products, customers or suppliers makes the risk hard for a bank to assess.
- Opaque ownership and control: banks need identity documents for beneficial owners and details of the company’s ownership and control structure. Multi-layered holdings without a clear ultimate owner often stall an application.
- Incomplete or inconsistent company documents: for example, a certificate of incorporation, constitutional documents, registered office or principal place of business that do not match the actual situation.
- No authority for the person acting for the company: for example, a missing board resolution or power of attorney.
What to prepare before applying
- Certificate of incorporation, business registration certificate and constitutional documents
- Registered office address and principal place of business (if different)
- Identity and address proof for directors, shareholders and beneficial owners
- An ownership structure chart
- A business description: products or services, main customers and suppliers, expected transaction amounts and countries, with contracts, quotations or invoices as evidence
- Authority documents for authorised signatories
The HKMA notes that this list is for reference only and that banks may ask for more based on their own risk assessment, such as FATCA and AEOI information.
What to do if you are rejected
The HKMA says that banks will generally give customers the reason an account cannot be opened, and that banks have a review mechanism: a rejected customer can ask the bank to look at the application again. Customers can also apply to other banks, or contact the HKMA (email accountopening@hkma.gov.hk, tel. (852) 2878 1133) with feedback.
Account opening is ultimately the bank’s decision based on its risk assessment, and no service provider can guarantee success. But clear, consistent documents prepared in advance cut down the back-and-forth.
Sources
- HKMA: Account opening and maintenance https://www.hkma.gov.hk/eng/smart-consumers/account-opening/
- HKMA: Information required https://www.hkma.gov.hk/eng/smart-consumers/account-opening/information-required/
- HKMA: What if the application is rejected? https://www.hkma.gov.hk/eng/smart-consumers/account-opening/what-if-the-application-is-rejected/
General information only, not legal or tax advice.