Inside Out | Don’t count on Hong Kong when it comes to one simple thing: opening a business bank account
Global regulatory overkill is forcing banks to refuse accounts to start-ups and young entrepreneurs – a problem that needs solving soon before it hurts the city’s economy
On Wednesday this week, the Hong Kong University of Science and Technology will hold its sixth annual One Million Dollar Entrepreneurship Competition – a platform for young aspiring entrepreneurs linked to the university to create and evaluate new businesses and to prepare to start an entrepreneural future.
The contest is one of many being spawned in Hong Kong at present, to stimulate enterprise, and encourage start-ups. First prize will be HK$300,000, with numerous other awards to be collected.
The competition underscores massive efforts on the part of the Hong Kong government, and organisations like InvestHK, to encourage new businesses, to demonstrate the city’s value as a “Global Superconnector”, and to underscore Hong Kong’s claim to be the number one business city in Asia.
But behind these laudable efforts, a peculiarly silent secret awaits the aspiring start-up, or the winner of the UST’s competition: even if you succeed in setting up your company, or celebrate the receipt of the HK$300,000 winner’s cheque, the current likelihood is that you will be unable to deposit the cash in a bank account, because you can’t open one.
The silent, smothered reality is that as far as start-ups are concerned, most of Hong Kong’s leading banks are closed for business. Opening a new bank account may not quite be impossible, but the information requirements now being demanded of companies or individuals wanting to open new business accounts in Hong Kong are so complex and onerous that in reality their doors are locked and barred.
On InvestHK’s user-friendly website, the “Why Hong Kong?” section succinctly lists the various forms of government support for new companies, the value of Hong Kong’s strategic business location, our low and simple tax regime, our international transparency and efficiency, and our world class business infrastructure. It then points you in the “Setting up your company” section to how to incorporate, and how to register your business, and then bumps into the matter of setting up company bank accounts.