Startups, SMEs and foreign nationals lament the inefficiency.
In contrast to the ease by which homegrown businesses can open a bank account, four in 10 (40%) of the Hong Kong business minority which includes startups, SMEs and foreign nationals admitted to encountering greater difficulties in opening bank accounts compared with other jurisdictions, according to a survey by the Hong Kong Institute of Chartered Secretaries.
“It is start-ups and SMEs that are sources of innovation and incubators for potential major businesses. There is a need for the innovator and/or entrepreneur to start somewhere, but being unable to open a bank account is a barrier to entering the marketplace,” HKICS said in a report.
Only 7% claim that it is easier to open a bank account in Hong Kong whilst 13% believe it is just the same with other jurisdictions.
Singapore stood out in respondents’ expanded comments as the jurisdiction of choice, offering easier bank account opening procedures than Hong Kong, the report noted.
Most Hong Kongers cite the amount of required documentary information in opening a bank account (47%) followed by the long processing time (38%).
“The difficulty with bank account opening is a multifaceted issue that does not bode well for Hong Kong. It is an issue that Hong Kong needs to address for its overall competitiveness and international reputation as a leading financial centre,” HKICS said in a report.
Overall, three quarters (76%) of Hong Kong startups, SMEs and foreign customers admitted that it’s getting more difficult to open bank accounts. Nearly half (48%) believe that the problem is not confined to one or two major or first-tier banks as the issue is wide-reaching with implications that are just as broad-based.
They cite difficulty in satisfying documentary requirements and opening accounts for foreign nationals as top difficulties.
The lack of transparency in bank account approval process and lack of reasons in the case of account rejection is also another significant difficulty.
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