Abstract: After registering a company, many people will think of the need to open a company bank account to facilitate future business transactions, but for start-ups to open a company account is not an easy task, banks have a certain threshold for the company account to open, what documents need to be prepared to set up a company account? Which bank is best for a start-up or SME account? Langfeng has sorted out for you the things to consider when opening a corporate bank account.
What are the benefits of opening a corporate bank account?
Many people think that when opening a company, they are not required to set up a company account at the same time, so what are the advantages of opening a company account?
Compliance with regulatory requirements
Although there is no requirement to set up a company account when opening a company, if you use an individual account for business purposes, you may be frozen by the bank. Banks are regulated by the HKMA and have the responsibility to supervise suspicious capital transactions and money laundering, and do not take chances to think that the use of individual accounts for commercial purposes will not be discovered, under the monitoring of the bank, there is actually a clear difference between individual users and commercial users.
Facilitate tax filing
For start-ups or one-person companies, it is not difficult to manage funds in an individual account or to distinguish between personal and corporate funds or purposes, but failing to hand over documents for accountants to audit when filing taxes can cause confusion and even require more service fees. And when the boss or employee’s salary certificate comes from an individual household, it is more likely to be investigated by departments such as the tax office.
More banking services
In addition to better loan interest rates, there will be banking fee waiver, free payroll service, corporate online and mobile banking, and accounting system link to facilitate company management.
Strengthen company trust
Due to the difficulty of opening a corporate account, if the successful opening of a corporate account indicates that the company’s background information and operation meet the bank’s requirements, it can increase the company’s trust in the minds of customers.
The most basic documentation requirements for the HKMA
Why is it so difficult to open a company account? To combat money laundering, the HKMA requires banks to conduct a Customer Due Diligence process to understand the background and needs of customers before providing account services to customers, so as to provide banking services that are suitable for customers.
Banks are required to establish their own risk assessment policies that meet the requirements of the HKMA and are responsible for this, and will be fined if they are found to have failed to meet their obligations to continuously monitor business relationships through customer due diligence. Therefore, banks attach great importance to the compliance of account opening and account use, and more strictly control the procedures and account opening qualifications.
For personal or corporate accounts, the HKMA may request the following information or require the customer to produce the original documents:
Identification documents such as Certificate of Incorporation, records of the Independent Companies Registry, Certificate of Registration, Certificate of Succession, Record of Registration, Partnership Agreement or Deed, Articles of Association
Registered office address and principal place of business (if different from registered office address)
Beneficial owner information, e.g. beneficial owner identification documents
Details of the company’s ownership and control structure for the purpose and nature of the account opening, such as the purpose of account opening, expected account activities, nature of business and mode of operation
Information of the person acting on behalf of the customer, e.g. identification documents and authorization documents of the agent acting on behalf of the customer
The above are the minimum requirements of the HKMA, and banks can obtain additional documents from applicants according to their own requirements.
Bank account opening requirements documents
In fact, whether it is a limited company, sole proprietorship or partnership, the required company account application requirements are not much different, as long as you understand the bank’s requirements in advance and prepare the following 3 types of documents:
Company documents: valid business registration certificate BR, company registration certificate CI and business supporting documents (e.g. invoices, purchase orders, leases, contracts, etc.)
Responsible person documents: relevant documents provided by the enterprise owner and authorized signatory, such as identity documents, address certificates, etc
Account opening documents: power of attorney, account opening letter and seal card
The partnership company needs to provide a certificate of trade name from the tax office
A limited company needs to provide the Certificate of Incorporation, Articles of Association, List of Directors and Resolutions, and Share Distribution Declaration
In addition to the usual documents mentioned above, it may be necessary to supplement the company’s background (source of funds), company organizational structure, recent audit reports (if any) or company website and product information. If the company is officially in business, it may be necessary to supplement the company’s business plan, etc., which seems to be different from the requirements of the bank.
Corporate account opening is difficult
At present, in addition to going to the bank branch in person, bank account opening can also be done through online account opening or mobile phone, but the difficulty of opening a company account still exists, and the information of opening a company does not seem to be difficult, but why is it said that opening an account is difficult?
The difficulty in setting up a business account for a company is that it needs to provide business documents, which can be invoices for goods, sales contracts, bank financial statements, etc., and it is difficult for start-ups to provide enough for banks to open a company account at the beginning of business.
To address the business account opening problem for start-ups or SMEs, many banks have set a lower threshold for SME business accounts, such as HSBC, Hang Seng Bank, Standard Chartered Bank and Dah Sing Bank, to facilitate the account opening process for SMEs.
Comparison of bank establishment companies
Although it is difficult to open a corporate account, it is also necessary to give priority to choosing the most suitable bank for your company and business, such as the administrative fee for account opening, search fee, time required for account opening, waiver of fee threshold and monthly service fee.
Account opening administration fee and search fee
Banks need to check the company’s background, registration information and responsible person information before opening a business account for a company, and will also charge an administrative fee for account opening and a business registration investigation fee, which is also a search fee to verify the company’s information. Some banks will charge different fees depending on the place of incorporation or the type of company, such as the administrative fee for opening an account and the search fee for overseas registered companies.
Banks will also add promotional offers for corporate account opening fees, such as Hang Seng Bank Virtual+ Business Account with account opening administration fee discount for online account opening.
Hang Seng Bank Virtual+ Business Account
Account opening administration fee: $1200
Search fee: HK$150 for local companies, HK$10,000 for overseas companies
An introduction to Hang Seng Bank’s various banking charges
HSBC Sprint Account
Account opening administration fee: HK$1,300 for local companies, HK$11,000 for overseas companies
Search fee: 150 yuan
An introduction to your HSBC Sprint account
BOCHK Business Banking Account
Account opening administration fee: HK$1,200 for local companies, HK$3,200 for Mainland registered companies, HK$6,200 for overseas registered companies
Search fee: unlimited company: HK$100, limited company: HK$150
Bank of China (Hong Kong) official website
DBS Bank
Account opening administration fee: HK$1,200 for local companies, HK$10,000 for overseas companies
Search fee: HK$150 for local companies, HK$2,000 for overseas companies
Standard Chartered Bank account opening easy
Account Opening Administration Fee: Local Company: None, Overseas Company: HK$5,000
Search fee: HK$150 for local companies, HK$2,000 up for overseas companies (subject to actual fee)
Standard Chartered Bank service charges
Dah Sing Bank 328 Business Banking Account
Account opening administration fee: HK$1,200 for local companies, HK$10,000 for overseas companies
Search fee: HKD account: HK$150, USD account: US$19
An introduction to Dah Sing Bank’s general service charges
Bank of East Asia
Account opening administration fee: HK$10,000 for companies in special industries or structures, HK$10,000 for overseas companies
Search fee: HK$200
An introduction to BEA general fees
Time required to open an account
At present, bank account opening can be done through three ways: in-person branch application, remote account opening services such as online application and mobile application, the number of days to prepare documents in between varies from person to person, the time required below is the approval speed after the documents are fully submitted, if the documents are not complete, it may take more time.
Hang Seng Bank Virtual+ Business Account: Up to 3 days after completing online e-signing
HSBC Sprint account: 5 working days at the fastest
BOCHK Business Wealth Management Account: 3 working days at the fastest
DBS: 5 working days at the fastest
Standard Chartered Bank “Easy Account Open” account: 2 working days at the fastest
Dah Sing Bank 328 Business Banking Account: Subject to availability
BEA: Subject to availability
Waiver of fee threshold and monthly fee
Many SMEs attach more importance to the amount of monthly service fees for corporate bank accounts, after all, it is also a burden to spend hundreds of dollars per month. Unlike individual accounts, banks will set monthly service fees according to the deposit amount of the company’s account and the type of corporate account, and the fee can be waived if the minimum deposit requirement is met.
Hang Seng Bank Virtual+ Business Account
Waiver of Threshold: Fee waiver for the first 12 months after account opening, after which the threshold is HK$50,000
Monthly service fee: HK$200
HSBC Sprint Account
Waiver of Fee Threshold: Monthly service fee waiver for the first 12 months after account opening, followed by HK$50,000
Monthly service fee: HK$200
BOCHK Business Banking Account
Waiver threshold: HK$50,000
Monthly service fee: HK$120
DBS Bank
Waiver threshold: HK$50,000
Monthly service fee: HK$200
Standard Chartered Bank account opening easy
Exemption from Fee Threshold: Exemption
Monthly Service Fee: Waiver
Dah Sing Bank 328 Business Banking Account
Exemption from Fee Threshold: Exemption
Monthly Service Fee: Waiver
Bank of East Asia
Waiver of fee threshold: Average daily relationship balance of HK$10,000 or above
Monthly service fee: HK$150
summary
In fact, as long as you understand the requirements for opening a bank account and prepare documents, it is not difficult to open a company account. If you have any questions about opening a bank account with a company, or would like to seek assistance with this, please contact the Langfeng Business Advisors team, we provide one-stop business advisory services for company setup, bank account opening, virtual office and office representative services, so that you can focus on developing your career blueprint!
