Hong Kong, officially known as the Hong Kong Special Administrative Region of the People’s Republic of China (HKSAR), is something similar to a city-state. It is situated on the Pearl River Delta of the South China Sea, opposite the SAR Macao that enjoys similar status with more emphasis on gambling. With over 7.5 million residents in a 1,104-square-kilometre (426 sq mi) territory, Hong Kong is one of the most densely populated places in the world, known for its high rise blocks and spectacular skyline.
Hong Kong was under British rule for many years during which it became first a low cost manufacturing base, developing into a service-based economy that still often serves as a bridge between China and the rest of the world. It is therefore a very strong offshore banking centre ideal for international transactional banking.
Hong Kong theoretically maintains separate governing and economic systems from that of mainland China under the principle of “one country, two systems.” This system however has been tested in recent years as it appears that China is taking more direct control of the city. This in turn has led to a huge exodus of capital and no doubt Hong Kong is not the bastion of stability that it used to be.
At the same time, compliance pressures have made it almost impossible to open non-resident corporate bank accounts in Hong Kong. There are some exceptions: for example, BVI (British Virgin Islands) offshore companies are still favourably viewed by Hong Kong bankers.
With its territorial tax system, it is theoretically possible to establish a Hong Kong company, open an account in a major bank such as HSBC, Standard Chartered or DBS, and do business internationally paying no tax. Banks, however, will be keen to see a regional connection – such as trade and banking transactions with China or local Hong Kong businesses.
In recent years Hong Kong has established itself as a niche jurisdiction for international e-commerce business, and today offers merchant processing through local and Chinese banks as well as a number of fintechs and money service businesses.
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Dear readers – as many of you are already aware, majority of countries worldwide, including Hong Kong, have become signatories of the agreement on the automatic exchange of banking information. This agreement, in particular, stipulates the terms and conditions for the transfer of bank account information from one […]Read more