How To Get Declined For Your HK Bank Application

Michael MicheliniBanking, Blog, Corporate3 Comments

Want to get declined for your bank account application in Hong Kong? Then you’re in the right place!

Of course you don’t want to get rejected when applying for your Hong Kong business bank account, but today I want to have some fun and give you some tips on how to make sure you’re rejected.

Maybe this will also be a more fun way for you to learn what the right thing to do – which is the opposite of this article!

The “Good Old Days” Are Gone

I laugh when I type this, as a few years ago people would hop into the bank and do most of these wrong habits and still get approved. But unfortunately now, we live in a much more strict world. The financial industry is getting cracked down from regulators to ensure their clients are legitimate businesses and not doing money laundering and drug dealing, etc.

So this means the banks have to be a regulator and inspector for you and your business now.

Don’t Prepare Ahead of Time

I talk to clients who want to come to Hong Kong in a few days and open a bank account. Sorry, those fast days are over. I recommend you to at least have a week, ideally 2 weeks, before you go to your bank account interview. You can schedule the appointments well in advance, so that way you can lock in a time and be fully ready for it.

Also, you should be doing business before you have the bank account. I know, this is counter intuitive – how can you do business without a bank account? Well, maybe in your personal name or in a company in another country that you are bringing over here. The banks want to see you are prepared to use the account once they open it, they don’t want to see you without any business activity before coming in.

Many blog readers are doing just that – they don’t have business activity yet and are applying. Which don’t get me wrong – still can work – but at least have your business outline and prepare your case. Also you as the director need to look legitimate and experienced.

Go to the Bank Interview Late

I’ve had a few close calls with clients who get lost or have flight delays. This is nerve wracking for me, and should be for you too! Have a good reason when you get to the bank why you were late, and if you’re over 15 minutes late there could be a chance they put someone in your appointment!

Yes, it is that crazy now. People are loading up the lobby of banks applying to banks, and with the new regulations in place the bank account opening process takes 1 hour to 2 hours!

Hop Over In Shorts and a T-Shirt

Back in 2008 when I applied I believe I came in with a t-shirt and cargo shorts. I am an internet business owner, e-commerce, that should be cool right?

I ended up getting the account, but I was getting some weird looks in the lobby.

Hong Kong dress code is always a bit more formal, even outside of the bank. With the way the regulators and bankers are these days, I strongly recommend coming in at least business casual.

Sure, I know, you’re an internet millionaire and you don’t have this in your wardrobe. Well, this is being weighed in the application as far as I’m concerned, when the banker is talking to you, they are recording notes about your answers and who knows what else.

Just like a doctor has a secret file on you, the banks do too! May as well have this dress code on your side.

No Supporting Documents

For my HKVIP clients I have a long running list of supporting documents you should read. You can also read my blog post on the 15 or so banks I visited with each of their checklists.

The bankers don’t always want to tell you each and every item they are looking for. And of course it depends on your business.

But they will want to see that you have business activity. Where are you getting your customers? What are the currencies? How much revenue? Can you prove you’re being paid?

On the supplier side, where do you buy your goods. If you’re a service company, is it done in-house or do you outsource your fulfillment.

These kinds of things will help the case when applying for the bank, and I’ve never seen a banker say you have too much information!

Be Nervous and Show No Confidence

Yes, this may be a bit like a job interview when you may not be able to make rent next week. You need this bank account to do business, you setup the company, you flew all the way out to Hong Kong from your home country. Its do it, or screw it!

We all react differently to being under pressure. But the better clients I have seen when doing banking interviews is the cool and confident applicant.

You should know your business, and you should be comfortable explaining it to a third party person. The banker will dig in a bit, it’s hard for me to predict what they will ask – but their job is to understand how your business works. And at the same time they are trying to see how legitimate of a director you are. Do you have experience in this field, do you have money coming in, will you grow it to be a million dollar company?

If you’re nervous about this, grab some beers with friends and have them grill you. Let them give you feedback after, and at the same time they will understand you and your business more anyway.

Show No Potential For Growth

Maybe you’re a hustling entrepreneur right now. Living off credit cards and bartending. We’ve all been there, and that is what makes life interesting and beautiful.

But sadly, bankers don’t care if you’re a struggling entrepreneur. Heck, they don’t want that!

If you’re going in there saying you’re doing this part time business and you’re happy if you make ten thousand dollars a month, they will not be too happy. They want a big client, they want to make fees off your account.

It is the same trouble for the banker to open an account for a small guy like this side hustle business owner as it is to open an account for a multi million dollar conglomerate.

It’s never good to lie and fudge numbers, but at the same time you want to be aggressive. You shouldn’t really be sitting back and satisfied with a small business, you should be challenging yourself to grow bigger and to make a bigger change and difference in the world.

Well it’s up to you – but bankers won’t like small business clients who don’t hope to grow.

Tell Them You’re Trying to Dodge Taxes

Yes, I have had people go into the 1 on 1 meeting with the banker and tell them they are doing all this so they can get out of taxes. Or pay less taxes. While this may be one of your top reasons, I don’t recommend making that the selling point to the banker for why you’re opening a Hong Kong bank account.

I cringe when I hear someone chat to me after applying to a bank in HK saying that is one of the main topics they explained. Please guys, you’re entrepreneurs here, think outside of the box a bit!

Have No Product Focus

While this one I can’t confirm, but if you walk into a bank’s office and say you sell toilet paper, sandals, and iPhone cases, they’ll be a bit confused.

Even more confused if you say you are running a tour guide company and selling cashews to India. You get my drift. Your Hong Kong company doesn’t need to have the industry specified to the government, but when you go to a bank they want to check a box in their application of which industry and product group you fit under.

Entrepreneurs, we never want to be in a box. But you want a bank account right? What is your main business, what has the most potential, and what checkbox will the banker pick?

Have No Hong Kong or Asia Relevancy

And lastly, the banker will talk to you about why you have a Hong Kong company. Sure you can tell them it’s for tax evasion, but I don’t think that is an amazing answer.

You want to have your Asia headquarters in Hong Kong. You’re doing business with China and Southeast Asia. You want to do your sales from Hong Kong. You plan to hire people in Hong Kong and to live happily ever after.

The banks are in Hong Kong. The banker is a local Hong Kong person (most of the time). They want to support their local economy. They also don’t want to put on their record that they have a client who is just doing tax evasion. They want a client who is going to add value. Who is not going to get them in trouble by the regulators when other countries come chasing after the banker saying why did you let this person avoid paying taxes in my home country.

Catch my drift, amigo?

Hong Kong has many amazing business opportunities, you now have a Hong Kong company, use them! Or at least plan to

So, Ready To Get Rejected At the Bank?

Hope this helps you prepare to get rejected at your bank account application. Ha! Come on, now you know what you shouldn’t do so you can roll into the appointment like a professional.

Keep calm, get a bank account approved, and carry on.

How about your experiences? Agree with these points? Got rejected? Want to help others – let’s leave some comments on our banking experiences so that we can take the community of global entrepreneurs to the next level.

Leave a comment below, cheers!

Related Posts

Tags: asia, bank, banking, business, career, china, corporate, entrepreneur, guide, hong kong, legal, tips

3 Comments on “How To Get Declined For Your HK Bank Application”

  1. Pingback: How To Get Declined For Your HK Bank Application – HongKongBizz

  2. Curtis Jones

    For those Americans coming here to do business need to understand local banks don’t like dealing with the political mess that created the FATCA and its tentacles that reach into the privacy of the Americans honestly living overseas. I’ve lived in HKG for 36 years operating a limited non profit business but find it a difficult thing for Hong Kong people to understand and afraid of US threats to moneys here. This really is bad for honest US business people here. I’d be interested how others have experienced.

    1. Michael Michelini

      hi Curtis,
      totally agree with you and have been trying to get through to people via various blog posts here. It is really scary how much this is affecting honest American business owners like you and me nowadays. lets hope somehow the right decision makers in American notice this and help us!

Leave a Reply