Naming good reasons for operating a business in HK to open a bank account (Need help!)

[Phago]

Hey guys,

I have a limited in HK and am trying to open a bank account there for my social media consulting business.
I am in touch with a HK online bank to open a bank account and finally get access with this account to Stripe and Paypal.

They are asking me for the following:

"Please provide the detailed business reasons why you want to operate your activity via a Hong Kong based company. We will not consider as good business reason any reference to the general business environment in Hong Kong)."

Well, since the main reason (taxes) is not accepted I was wondering if you guys know any good reasons to provide that might have been accepted by other banks in the past.
I was thinking about like main customers in HK, China and Singapore and for them its easier to conduct business with a HK company etc. Not sure if this is enough though.

Would really appreciate your input!

 

[Martin Everson]

Are you based in Asia?

If your not based in Asia then saying your clients will be in HK sounds plausible. However why not look around for other banks or use an EMI like Currenxie, Neat etc. You can search forum for others.

 

[Phago]

Yes, I am not based in Asia, but in Europe.

However why not look around for other banks or use an EMI. You can search forum for these

I haven't found one that convinced me yet. Could you recommend my any specific one?

Thanks a ton for your help!

 

[Martin Everson]

I haven't found one that convinced me yet. Could you recommend my any specific one?

https://www.neatcommerce.com/https://www.currenxie.com/https://www.airwallex.com/

 

[Domino]

"Please provide the detailed business reasons why you want to operate your activity via a Hong Kong based company. We will not consider as good business reason any reference to the general business environment in Hong Kong)."

Which bank is asking for such explanation?

 

[Silvio]

Get some invoices\receipts to HK companies (just find any company related to your field in HK, pretend you wanna be a customer, ask for receipt\invoice). Ofc if you're extra sneaky you can just make up an invoice, the bank won't check
Show the bank as proof that you have HK suppliers, customers
After you get your account approved, tell HK companies you changed your mind and ask to cancel the invoice\receipt.
Maybe get a local office (just virtual phone number\address) for few months

P.S. Works for other jurisdictions as well..,

 

[Phago]

https://www.neatcommerce.com/https://www.currenxie.com/https://www.airwallex.com/

Thanks a lot Martin! I have already opened an account with Neat, but I am a little concerned of not getting my money out go the account since there are so many bad reviews about disappeared funds and frozen accounts. I got an account in Lithuania with an online bank which I would generally like to transfer funds to for safety.

Which bank is asking for such explanation?

http://statrys.com

Get some invoices\receipts to HK companies (just find any company related to your field in HK, pretend you wanna be a customer, ask for receipt\invoice). Ofc if you're extra sneaky you can just make up an invoice, the bank won't check
Show the bank as proof that you have HK suppliers, customers
After you get your account approved, tell HK companies you changed your mind and ask to cancel the invoice\receipt.
Maybe get a local office (just virtual phone number\address) for few months

P.S. Works for other jurisdictions as well..,

Great advice, thanks a lot!

 

[Martin Everson]

http://statrys.com

Thats not a bank. It's just the equivalent of the EMI's I posted. Tell that tiny barbershop nothing company to go to hell with their questioning. I thought you meant a real bank like DBS etc was asking for that info....lol.

 

[Phago]

Thats not a bank. It's just the equivalent of the EMI's I posted. Tell that tiny barbershop nothing company to go to hell with their questioning. I thought you meant a real bank like DBS etc was asking for that info....lol.

Haha true
You got any experience with Statrys? Or with the other three you mentioned especially moving funds from there via Transferwise to bank in Europe?

 

[Martin Everson]

You got any experience with Statrys?

No experience with them

Or with the other three you mentioned especially moving funds from there via Transferwise to bank in Europe?

Neat don't accept Bahamas residents. There list of restricted countries is 3/4 of the worlds countries. The others I have not used personally.

 

[James2122]

I would be interested in the above conversation, I have an eCommerce company in the UK, I will use my hong kong company as a trading company. Therefor distributing my tax liability in the UK by creating more a bit of profit in the HK account. As a nonresident of HK is it still ZERO rated for nonresidence i.e co-operation tax. I am a little rusty and need some guidance.
Also, can I set up a Neat Business account for my HK Business without being a resident with Neat?

 

[JustAnotherNomad]

I would be interested in the above conversation, I have an eCommerce company in the UK, I will use my hong kong company as a trading company. Therefor distributing my tax liability in the UK by creating more a bit of profit in the HK account.

Are you based in the UK? Then this probably won’t save you any taxes legally.

 

[James2122]

Are you based in the UK? Then this probably won’t save you any taxes legally.

I am currently now based in Spain

 

[JustAnotherNomad]

I am currently now based in Spain

Even worse, then probably even your UK company should be paying its taxes in Spain. Unless you have staff or an office in the UK. The same would go for your HK company. Did you discuss your setup with a Spanish accountant?

Of course if you don’t care about the legality, it’s a different story.
In the mentor group, there was recently a post by someone from another European country with a UK e-commerce company. He was woken up in the early morning by the police who had come to raid his home. Just saying...

 

[James2122]

Even worse, then probably even your UK company should be paying its taxes in Spain. Unless you have staff or an office in the UK. The same would go for your HK company. Did you discuss your setup with a Spanish accountant?

Of course if you don’t care about the legality, it’s a different story.
In the mentor group, there was recently a post by someone from another European country with a UK e-commerce company. He was woken up in the early morning by the police who had come to raid his home. Just saying...

Hmmm if I have a UK co=operate in the UK then that company is liable for tax in the UK, same as HK. Its only money I draw as personal earnings/dividend that I have to declare in my country of residency as far as I am aware.

'In the mentor group, there was recently a post by someone from another European country with a UK e-commerce company. He was woken up in the early morning by the police who had come to raid his home. Just saying...' I guess what people say and what actually happens can be two different things, if taxes are due you'll receive letters first not police raids. UK or Spain.

 

[JustAnotherNomad]

Hmmm if I have a UK co=operate in the UK then that company is liable for tax in the UK, same as HK. Its only money I draw as personal earnings/dividend that I have to declare in my country of residency as far as I am aware.

“As far as I am aware” is the critical part here.
You really need to get some professional advice because you are wrong. I really don’t understand why people just set up companies somewhere without spending just $100 on a call with an accountant. But maybe that’s just me.

 

[James2122]

Yes thats my next port of call, and on going discussion with my financial guys. Isn’t the whole idea of this forum to discuss other options, or knock around ideas. I’ve had similar set ups historically with out any problems, 15 years worth of experience. I think I’m pretty much on point.

 

[JustAnotherNomad]

I’ve had similar set ups historically with out any problems, 15 years worth of experience. I think I’m pretty much on point.

Did you ever talk to a tax lawyer about your setup? Or did you just assume that, because nothing bad happened, it must have been correct and legal?

Why do you think many users in this forums ask about anonymous bank accounts and companies registered using fake documents if it was as easy as you think? Anyone could just use a HK company to accumulate their savings - paying out a very low salary they’d pay tax on - then move to Dubai for a year, pay out all the capital from the company account, and then move back to their home country the following year, right? Why isn’t everybody just doing that?

Anyway, the risk of getting caught probably isn’t very high if you’re an expat. As we can see from your case.

 

[James2122]

Did you ever talk to a tax lawyer about your setup? Or did you just assume that, because nothing bad happened, it must have been correct and legal?

Why do you think many users in this forums ask about anonymous bank accounts and companies registered using fake documents if it was as easy as you think? Anyone could just use a HK company to accumulate their savings - paying out a very low salary they’d pay tax on - then move to Dubai for a year, pay out all the capital from the company account, and then move back to their home country the following year, right? Why isn’t everybody just doing that?

Anyway, the risk of getting caught probably isn’t very high if you’re an expat. As we can see from your case.

Gosh, aggressive are you ok?

 

[JustAnotherNomad]

Gosh, aggressive are you ok?

I actually tried to not come off as aggressive, sorry for that.
But you should really talk to a Spanish tax lawyer.