What To Do Before You Go To The Bank Application

Michael MicheliniBanking, Blog, Corporate1 Comment

So you have the company setup, and now you are working on getting your bank account setup. Today, hopefully you read this article BEFORE you go in.

Many entrepreneurs I work with fly into Hong Kong just to apply for the bank account, so it’s important you get it right the first time. Else it will involve another trip, hotel, and a lot more hassle.

So pay attention, this can save you thousands of dollars!

Also, another article that has much more detail I wrote is the 2 days at 20 banks in Hong Kong, what I learned, so check that out too for bank by bank details.

What Do You Need For Your Banking Needs?

First, what is your expectation of a Hong Kong bank? Many of us make ASSUMPTIONS of what a “default” bank account will come with. And you know what assumptions do right? They love to prove us wrong and waste our time later.

So first, make a checklist of what you’ll use the bank account for, here are some examples:

1) Send and Receive International Wires
2) Buy things online
3) International ATM withdrawals
4) Write Checks
5) Multi-Currency account
6) Online banking

Some of the banks require you to ask for some of these services and there are extra fees. Yes, that list may look basic to you, but they are not all “out of the box”, or should I say “out of the bank”.

Send and Receive International Wires

This one HSBC gives you by default, but others this is an additional requirement. I believe it was BEA bank who said you need to wait 90 days before you can use it for international wires – incoming and outgoing.

That is a deal breaker for most reading this – as the only use for the account then would be for buying and selling products inside of Hong Kong. That means they are really focused on only working with local businesses, and those global businesses need to wait an extra few months and then go about their business.

Who knows, maybe in the future all banks in Hong Kong and around the globe will start restricting international transfers like this – so its worth confirming this with the banker when you meet.

Its also good to have someone in Hong Kong who has an account that can fund it locally with a transfer. Then you can wait for the account to get international payments enabled.

Your Default “Bank Card” Isn’t Able to Buy Things Online

A big thing here, so read carefully. Your “default” bank card you get will not work for buying things online. Or buying things offline outside of Hong Kong.

The front of the card does not have the Visa / MasterCard logo on it. If you look on the back, you’ll notice that it has Unionpay – but even UnionPay shops can’t swipe this card. This debit card is actually not a debit card. Remember we talked about “assumptions” before? This is an EPS card, “Electronics Payment System”, which only seems to be supported in Hong Kong.

You can use that EPS card like an ATM to buy things at shops here. Same flow, you swipe your card, enter your PIN and the funds are directly debited from your HSBC bank account. But this swipe won’t work outside of HK.

I know, it sucks!

So the only way to be able to buy things online or in shops outside of Hong Kong is to get a credit card at the bank.

Tons of new HK business owners find this out after their account is approved, and then are stuck. They the mostly use Paypal to buy things, or credit cards in other countries. This obviously is a lot of trouble.

So what kind of credit card can you get? As you’re not living in Hong Kong and have no local credit history, you’ll probably have to opt for a pre-paid credit card. The minimum in Hong Kong HSBC is 10,000 HKD security deposit, to get a 10,000 HKD credit card available balance. That’s about $1,300 USD. Depending on how much you’re spending online, you may need more than that. You can do more, but it is matched 100%. That means if you want a 20,000 HKD line, you need to put up 20,000 HKD.

We have a podcast on this How to Get a Hong Kong Credit Card if you want to give it a listen. We also offer this as part of our HKVIP service, and also have a separate service just to help with this Bank account opening assistance.

Bring Money or Credit Card To Pay Bank Application Fee

Seems like almost all the banks in Hong Kong are now charging an upfront, non-refundable application fee. I’ve had people who go to the bank without a credit card and can’t apply! That seems a bit extreme, but it is best to be prepared with a credit card when you go to the bank.

They can also accept cash or local bank transfer. I assume you can’t do a local bank transfer as you’re visiting from overseas. Plus you don’t want to pay in cash (Hong Kong dollars) as you’re visiting and don’t want to exchange too much cash here. That’s why I recommend having a credit card to pay the upfront fees.

Of Course Bring All Your Company Activity Proof

There are long lists of items you need to bring. Again, refer to my long post about each bank I visited and what they asked. As global travelers, we don’t want to fly around with file cabinets in our luggage, but for this case I recommend getting it done. Or finding a print shop near your hotel to prepare everything.

A small plug, we offer a HKVIP company setup package to make this process smooth and a little bit fun even! Contact us about it today!

Will You Need to Write Checks?

The banks won’t give you a checkbook anymore. You need to request one and it is mailed to you. HSBC gives you a couple checkbooks for free. I had mine mailed here in Hong Kong and they were received in a few days, but I know international is quite a hassle.

I hadn’t used checks for quite some time – but now that I’m helping fund people’s new accounts, writing a checks is back in style.

You may not need them. If not, it is better to not risk having them printed. Why? Well, someone could essentially forge your signature and write checks to other people. Ya, ouch. Sure the signatures need to match, but still having checks laying around is a liability.

I assume you won’t need these, but again, this is something that if you need, its best to ask upfront while at the bank.

Activate Your ATM Card (While in HK)

When you apply for the bank account, you’ll get your ATM card and PIN device right away. Exciting I know, but it isn’t approved. Still need to wait for the back office of the bank to process everything. They do this I think to avoid having to mail things around the world and having clients claim it didn’t arrive.

So what you should do, before flying out back down to Thailand is to activate your ATM card. I think years ago my banker actually walked me to the ATM machine to do it. Nowadays they are so overloaded with requests from new clients they have meetings back to back.

You should open your PIN code envelope, login, and change the PIN. Then you’re good to go. But there is one more step for international travelers

International ATM Withdrawals?

So you plan to take cash out of the account, while on the beach in Thailand? I have to admit, even I made this mistake and it didn’t work.

You need to turn on the international ATM feature at an official HSBC ATM or do it in their online banking. Stupid me back in the day didn’t know this and thought the ATM wasn’t supporting my card, etc etc.

By default the card is only enabled for use inside of Hong Kong territory. If you want it outside you need to manually turn it on. There are also different lengths of time you can turn it on for, months, multiple months, indefinitely.

I tell clients to turn it on while still in HK, they need to active their card anyway.

Multi Currency + Online Banking

Other features that are worth asking that I can think of off the top of my head are:

Multi-currency banking. You are in Hong Kong because of this very reason! But some of the more local banks don’t have multi-currency turned on by default. That’s why they are not allowing international wires as easily anymore. Not sure if it’s by choice or by regulators. So if you’re looking for a local bank, then make sure you ask if you can hold more than just HKD (Hong Kong dollars). HSBC, Hang Seng, and the other big banks always have multi currency on by default.

Online Banking. Yes, well, I think all banks say they have online banking. But there is a lot to be desired. I guess this is because it’s so hard (or impossible) for new technology companies to get a banking license here that these old banks don’t have any pressure (i.e. New competitors) to push them to invest in online banking. So try to get a demo of the online banking.

If You Forget to do it at the Opening, Can Do Later

So maybe you’re finding this guide today AFTER you applied to the bank. Sorry about that!

But don’t worry, you can still enable these features later. But, it will be a bit of a challenge to do remotely from overseas. Hong Kong is a bit more traditional requiring you to come in person to the banks and fill out a paper form and sign it. And they are strict about everything being included.

So what happens is most Hong Kong business owners living overseas plan a yearly trip to Hong Kong. This could be for business anyway, like trade shows or conferences. So then they do the banking at the same time. This involves applying for a new credit card, adding a signer on the bank account, increasing the limit of their current card.

So these are your choices:

1) Get everything you need when you apply for the bank
2) Prepare to do some adding / adjusting of the bank account on another trip to Hong Kong
3) Deal with signing forms and mailing back and forth and waiting months (yes, months!)

Number 3 is very painful for everyone involved. Part of my “to do” is to make this process as easy as possible for people who work with my company. But the big picture is to have the banks actually have a better online banking experience for new account applications.

So Any Other Features You Can Think of?

This is all I can think of, but we all have so many different requirements. Did I miss anything?

I really do hope I saved you some flights to Hong Kong with today’s guide. If you can leave me a comment and let me know what you thought, I’d be honored!

To our mutual international business success!

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