Recent experience with Hong Kong personal account opening

7889

Building Trust
Entrepreneur
Here is very recent experience one of my clients had you may find interesting
Customer - citizen and resident of CIS (former USSR) country. Not russian.
Documents provided: passport, ID, bank statement from home country bank as address proof. Bank statement printed from internet.
It's always a good idea to make appointment for account opening online beforehand

1) Bank of China - Wealth management account (balance > 1000 000 hkd)
Initially application was accepted, almost two hours spent completing very basic questionnaries and such. Bank statement NOT accepted as address proof as it was not mailed to the home address but printed. However, account opening does not require address proof at all, only investment account does. Good enough, they have option of uploading address proof online via internet bank. Things seemed to go smoothly, however after two hours they told that additional approval is neccessary and may take up to 4 weeks. Maybe if the other staff was handling the case they could tell it right away, but you never know

2) Citibank - Citigold account (balance > 1000 000 hkd)
Basic questionnary (work, household income, monthly account turnover, countries of remittance, etc)
Account, including investment account, opened on the spot within 30 minutes, Mastercard debit card provided immediately, PIN can be set up in the branch (no need to wait for PIN in mail)
Manager was very outspoken and even showed excel document describing limitations for customers from different countries. Basically they had no significant limitations for countries we on this forum often consider "red flag", but some of the countries had a remark of "reverse inquiry" by them. That's quite a bizzare thing, when bank can not promote certain products to you, but can not withhold information if you ask yourself.

Very important - if you are holding few passports, you must enter HK with the passport which you are planning to use to open the account as you will be required to provide so-called landing slip given by border control.
 

maxmmm

Active Member
Thanks 7889!

Any other banks your client tried?

I've heard Standard Chartered could open (with only 10000 HKD minimum deposit) and ICBC also opens with same lower minimum deposit.
 

Martin Everson

Offshore Consultant
Business Angel
Is that happening often? For example if you would wire from another personal account in your name, why would they freeze..
Citibank Singapore before I closed it down began the relationship by freezing my account after very first transfer and money came first party from Citibank UAE :(. HK maybe different.
 

maxmmm

Active Member
That's unfortunate.. Citibank experience varies from country to country it seems, buddy of mine has a Citi account in an East European country, no issues at all and never asked anything about any wire
 

7889

Building Trust
Entrepreneur
Citibank was funded same day by quite large cash deposit (>20k usd). So far so good.
He was happy with Citibank success and did not approach any other banks.
 

7889

Building Trust
Entrepreneur
Oh, and i forgot to mention they started pushing their life insurance deposit thing right away (thing where they freeze your money for minimum 3 years but you ge tlike 5% usd annual return, many older Chinese customers looove it)
 

maxmmm

Active Member
Oh, and i forgot to mention they started pushing their life insurance deposit thing right away (thing where they freeze your money for minimum 3 years but you ge tlike 5% usd annual return, many older Chinese customers looove it)
LOL doesn't sound so bad... what's the catch?
 

Martin Everson

Offshore Consultant
Business Angel
Oh, and i forgot to mention they started pushing their life insurance deposit thing right away (thing where they freeze your money for minimum 3 years but you ge tlike 5% usd annual return, many older Chinese customers looove it)

Sounds like they are trying to scam him with a Structured Product promising BS returns rof/%.
 

Martin Everson

Offshore Consultant
Business Angel
Can you elaborate on why that's a scam?
Because there is no safe high investment grade way of earning 5% per an annum in USD currently. You will either be investing in junk bonds, borderline junk bonds, junk CD's, Structured Products or its not guaranteed at all...lol. It's common sense without even having to look into it any further....lol.

Chances are they are selling a scam Structured Products. Asian people love these products because they love gambling I used to sell such products to them. The bank can promise you average of 5% or even 8% returns annually on average over 3-5 years. However all the bank has done has purchased a basket of discount bonds that matures at par (i.e 100% of face value in 3-5 years). It buys this at a discount i.e 90-97% of face value. It then uses the remaining 3-10% of your investment to invest in Call and Put options. Hence the bank can sell you a guaranteed capital protection on your investment (via bond protection) and if the Call/Put options go their way then the 5% average annually over 3-5 years is possible. Meanwhile the inbuilt fees you don't see mean the bank earns around 4%+ on selling such BS products. It's a scam.

I am not saying this is what they are selling but just saying 5%?? lol.
 

maxmmm

Active Member
OK but that's not really a "scam"... obviously nobody will give you 5% risk-free, what's your downside here? the inbuilt fees?
 

Martin Everson

Offshore Consultant
Business Angel
OK but that's not really a "scam"... obviously nobody will give you 5% risk-free, what's your downside here? the inbuilt fees?
The definition of a scam is "a dishonest scheme or fraud". Structured Products meet that criteria 100% as none of what I mentioned is every explained to end client. They will never tell you how capital protection products actually work under the hood plus the capital protection is NOT actually guaranteed...lol.

He needs to give details on exactly what B.S product is offering this 5% annually over 3 years...lol. I am literally just guessing at moment and using common sense the same way someone would look at Bernard Madoff consistently good returns with suspicion. smi(&%.
 

7889

Building Trust
Entrepreneur
It's something like this
There are so many of these plans and they seem so unnecessary complicated that i never bothered to explore in-depth
There is one upside to these insurace things though. Basically it can be viewed as a time deposit which is not on your account and is not reported anywhere. And it can be as big as you like. Many wealthy chinese guys obviously appreciate it.
 

Martin Everson

Offshore Consultant
Business Angel
So basically a HSBC scam where you earn like 2-2.5% a year in that example....lol. To make matters worse they don't and will not explain how the investment generates the income because it is as I describe above a complete SCAM....lol. Currency issues aside its safer to just buy a AAA 3 month U.S Treasury note, and keep rolling it over, which as I speak yields 2.06% smi(&%.

There is one upside to these insurace things though. Basically it can be viewed as a time deposit which is not on your account and is not reported anywhere. And it can be as big as you like. Many wealthy chinese guys obviously appreciate it.
BOV in Malta been selling that for years nothing new :confused:. They even offer a trust as beneficiary to bypass CRS believe it or not. Any wealth management bank offers a version of the "Life insurance Wrapper". The income comes from the underlying investments and fees are often very high with other hidden fees built in.


P.S You were smart enough not to invest in the nonsense at least.
 

JimBeam

Active Member
I still have my HSBC HK personal account that I setup ~15 years ago... At the time you could just walk in the bank and open an account for same amount of time needed to buy a new iPhone today. I don't use it much at all.
 
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