Announcing: US Citizens Will Notice Increased Pricing

Michael MicheliniAnnouncements, Blog8 Comments

Over the weekend we updated prices for our Hong Kong incorporation package to separate American citizens from citizens in other parts of the world. The price for US citizens is higher than everyone else.

Yes, we’re charging Americans more to setup their company in Hong Kong.

Yes, I’m an American citizen myself.

You may be thinking – huh?

Already have been getting people contacting us about the reasoning why, so let’s get it all out there in today’s post.

Update: Been getting a lot of action in Twitter on this article, such as:

What’s Been Happening Over The Past Couple Years For Americans Overseas

Americans pay tax globally, whether they are a resident of USA or a resident somewhere else. There are exemptions from the US tax department for expats living overseas earning salary, and Americans know about this and it seems to have been working along just fine. It’s an annoyance of extra paperwork, but we do what we gotta do.

The big keyword is FATCA (click to learn more what is FATCA)

More Paperwork for Banks Around the World

The big update was last July, 2014. This is when the US government enforced that all banks around the world need to declare US citizens bank accounts and balances back to the US government.


Because the US government felt many of its citizens weren’t following the rules and hiding money overseas to avoid taxes. So this step pushes the banks to disclose their clients and which ones are Americans and send that back to USA HQ.

I’ve talked to my contacts at HSBC Hong Kong, and they tell me there are US tax regulators in their office upstairs going through databases and documents. Not sure how long, or how often this has been going on. The bankers are often uncomfortable discussing this with me. The feeling I get is they’re somewhat violated from American regulators.

I’ve been with clients in the banker’s office. More are not at all affiliated with American business and not an American. Doesn’t matter. Still fill out massive paperwork for the US government to look at the account. Then swearing that they are not American nor any owner in their company.

Stateside, this has always been happening for US-based banks.

US Has Been Fining Banks for Not Being Strict with KYC (Know Your Customer)

Besides the paperwork, the US has been fining banks large amounts of money for not verifying clients, on multiple instances. This is for allowing clients to use the bank for money laundering, drug dealing, and other bad stuff.

US regulators say it is the responsibility of the bank to know their clients business. To know if they are using it for illegal activity.

So, between these 2 factors (not sure – maybe more) – it has translated to a lot more paperwork and procedures for everyone.

For me, as a service provider, I want to provide a quality and thorough experience. Working with an American client means I have a lot more service to provide to properly do my job. I also do not want to get in any violations with the US myself, and am extra careful when dealing with an American citizen.

Is It Fair To Charge Americans More?

Is life fair? Is it fair that based on where someone is born, where someone has their residential address proof, they can or cannot open a bank account?

As I dig more and more into international business, I have visited tons of banks in Hong Kong, as just a normal American international entrepreneur. I have been straight denied because I showed them a US passport during the application process. They don’t want to deal with the paperwork and the risks.

Will all countries require banks around the world to fill out paperwork promising you are not a citizen or resident of their country? Will this become a trend?

As I have learned, the most important part of a business is the ability to send and receive money. Obvious right? Opening the company isn’t the difficult part, it is to have a bank account in that company to do it. And the procedures and work involved in helping an American do that is much more complex.

I am fascinated more and more with international business and banking. I hope to get to know the regulators and maybe find out if there is an easier way to report it. Heck, maybe that can be a new startup idea.

But at the current rate, it is more headaches and more manual paperwork and research – so it is only fair to charge for that service.

Note: This is for Any New Company With 10% American Ownership

We want to be clear, this is for any company that has a US citizen who owns 10% shares or more.

That means if it is 90% Australian and there is one partner who is American and owns 10% of the company, they will need to pay the higher service charge to work with our agency.

This is because the paperwork is the same on our side. Having an American as a director or owner of your new international business is becoming an extra cost.

Or Charge Everyone More?

Banks right now don’t have policies to charge people more based on being American or not. But they are starting to establish bank account opening fees and higher bank fees. Others who don’t charge fees seem to just pile up the paperwork in their back office and tell you processing this application will take 4 to 6 weeks.

I am just trying to imagine the scale that this is happening on. All this physical paper printed out, scribbled down by a nervous applicant in a banking application all around the world. Then having these documents mailed to America. Paper is light when its a few pages, but not when it is reams and reams.

Sure, there are these extra forms for even non US citizens, but they simply need to say “no, nope, not me, yes I promise I’m not American” on their forms. That isn’t more headache for service providers like me.

And at the same time, how upset would an American client be with me if I didn’t take that extra care to explain and assist in the application process? There are big issues if they don’t do things correct, nowadays more than ever!

This Trend Will Continue

Already I am seeing American citizens being flat out denied when they go to apply at a bank. Other banks take their application, but are strict and extra cautious when they see a US citizen on the application. Or maybe they just deny 95% of all Americans in the application process.

As we deal with this on a larger volume, we have been able to gather more data. Hoping that things will get more clear and automated – so far it has only gotten more murky and unclear.

Banks are always on the risk averse side. Maybe they are still waiting and seeing how US regulators treat the paperwork they have sent in. Or maybe they are getting told to be stricter and be more exact as feedback from the regulators.

We will do our best to continue to cover this.

What Do You Think?

Are we doing the right thing? Should we increase the costs for all clients? Should we just glance over the paperwork for Americans? Not provide the exceptional, high touch service we do for all clients?

Related postAre Americans Doomed To Do International Business in the Future?

Leave us a comment and let us know!

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Tags: banking, hong kong, offshore banking, usa

8 Comments on “Announcing: US Citizens Will Notice Increased Pricing”

  1. John Hanson

    The US has become toxic and has arguably been an unfriendly player around the world since its inception in 1776. It is not the land of freedom its citizens claim to be; that is nothing but patriotic propaganda. It is a bully and leach, a pariah of world progreess. It needs to be shunned and ostracized. It needs to be sent to its corner until it is willing to play fair.

    I want to see Hong Kong and all of southeast Asia stop producing goods for America at slave wages; I want to see all countries stop buying goods and services from the United States; I want all countries to demand their American immigrants either renounce or leave; I want exhorbitant fees charged to all American immigrants by all countries; and I want the 300 American military bases around the world kicked out.

    1. Jacob Gadikian

      Americans are no longer represented by their government, please keep that in mind when considering America and its people.

  2. mjh49783ab

    Perhaps one of the most important things that an American expat needs to do for his future, is to acquire citizenship elsewhere, and to renounce his US citizenship. The US is a toxic place these days, and the punitive laws and policies that it has towards its diaspora, makes for the tough, and stark decisions that have to be made.

    The question you need to ask yourself is pretty simple. Is your time outside the US temporary, and you intend to go back after a few years? If so, then this doesn’t even have to be your problem.

    If your time outside the US is going to be indefinite, and you don’t know if you’re going to return in the future, then you have to consider the banking difficulties you’ll have to face, as well as the difficulties in remaining tax compliant in a tangled mess of regulations and paperwork. Regulations and paperwork of the kind that you would generally never have to face in the US. Between all that, and the hostility you’ll face from the government, as well as the people left in the homeland, you’re going to have to seriously ask yourself, if maintaining your US passport is really worth the headache, and aggravation. I submit that for more and more people, it just won’t be worth it in the long run.

  3. DualNational

    You are doing right! I was denied a retail securities account in Germany last month – even so I’m a German citizen my dual U.S. Citizenship stopped the account opening process pretty fast, once the bank was made aware of my handicap. Now that FATCA is in place, banks are forced to identify U.S. Persons but they are not forced to contract persons causing exceptional burdens. The retail bank in question explained me that they simply don’t do any more business with U.S. Persons (regardless if the U.S. connection is triggered by S.E.C, FATCA or other U.S. regulations). If the U.S. lawmakers would like to exclude their people from doing business abroad, this bank is just fine and couldn’t care less.

    1. Michael Michelini

      Sorry to hear that…. I was just at another bank in Hong Kong and they told me no more Americans. They are afraid of the policies and the future of what the US government may make them do to have these clients…..

      Best of luck to you (and me, and everyone being an overseas American) on banking overseas….

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