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HKMA webpage on opening bank accounts

March 28, 2017

The people that work in the Hong Kong government are very nice people that really want to help people set up businesses.  The good and bad thing about HK is that often the government has very little power.

I’m pretty sure that the conversation goes like this:

HKMA: Could you, please, please make it easier to open bank accounts?  This situation is killing Hong Kong.

Big Bank: Look, we just got fined tens of billions of dollars by major governments for AML/KYC and they are watching us like a hawk,  Quite frankly we are much more afraid of them than we are of you.  Let’s assume we ignore you, what are you going to do to us, pull our license?

HKMA: Ummmm.  No.

Big Bank: In that case, we’re sorry.

I’m thankful that the HKMA is trying to do something since having bureaucrats who want to help you even if they can’t is worth something.  On the other hand, I’ve basically given up on setting up bank accounts in HK, and I’m taking a lesson from Kenya and Mainland China.  It turns out that both areas are far, far ahead of HK in digital cash, because the traditional banks are hopeless.  So right now, I’m starting a HK company, and assume that it won’t get a bank account, and then trying to figure out how I can operate a company without one.

Right now, I’m helping Russian and Ukrainian fintech companies get set up in Hong Kong.  If anyone comes to me and tells me that there is a bank in HK that would open an account for this type of company, then I’ll be extremely grateful.  Right now, I’m under the assumption that it’s a total waste of my time to even try to get a HK bank account for these companies.

The one constructive suggestion that I have is one of tone.  Hong Kong bureaucrats come out of the British tradition, and so sometimes they can come across as condescending and out of touch.  The tone of the web pages seems to imply that the fault is of the people that are trying to get accounts for not following the right procedure, and if only you would do the right thing and file the right papers, you’d get your account, when in fact for most people, they are doomed since they won’t get the account no matter what they do.  For small companies, it’s much better to say “you aren’t going to get your bank account” than to have them spend a month filling out papers and not getting the account, and I think in most situations, it’s not a documentation issue.

If you had a bank that was open to opening these sorts of accounts, then just put up a Google ads, and I’ll find them.

The other thing is that people avoid talking about the structural issues that keep people from getting bank accounts.  It turns out that the HK banking system is dominated by a few large banks, none of which are headquartered in Hong Kong, and so if they don’t give you an account, there’s no reason for the smaller banks to open up the accounts.  Maybe the HKMA could do something about encouraging people to open banks specifically to cater to this market, but at that point it gets into a political discussion about the structure of HK banking, and that’s something that civil servants are really uncomfortable dealing with.


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