The cross-border e-commerce market has undergone tremendous changes. How can Chinese sellers fight back?

The cross-border e-commerce circle is really turbulent this year. Many Chinese billionaires have suffered sudden disasters, and their stores and brands have closed down one after another. Under the multiple influences of the epidemic and the wave of account bans, the surviving sellers are also facing many difficulties. In this regard, some sellers have raised the question, can cross-border e-commerce still be done?

According to a report released by the E-Commerce Research Center of the China Internet Network Information Center, the scale of China's cross-border e-commerce market reached 6.05 trillion yuan in the first half of 2021, and it is expected that the market scale will reach 14.6 trillion yuan in 2021. The impressive data proves that the cross-border e-commerce market is still attractive and has huge development potential , and it is still a hot spot for Chinese sellers.

In recent years, under the dual factors of favorable policies and markets, mainland enterprises have joined the cross-border e-commerce market . If seizing the right opportunity and taking the initiative is the key to the success of an enterprise, ensuring the healthy flow of funds is the driving force for the growth of an enterprise. As the scale of cross-border e-commerce continues to expand, it will involve business transactions in different countries and regions, and the use of foreign exchange will also increase . The procedures and fees required for inbound and outbound accounts have also increased, and there is indeed a lack of convenience in business handling. At this time, it is particularly important to have an overseas bank account.

As an international financial center adjacent to the mainland, Hong Kong is an excellent hub connecting mainland enterprises with the world, and has unique advantages in terms of trade freedom and financial freedom . This article will explain to you why and how to help your company open a Hong Kong bank company account and solve international collection and other issues.

How to open a Hong Kong bank account ? Sellers need these information

In order to take advantage of Hong Kong's strong financial infrastructure and relaxed foreign exchange policies, most mainland cross-border e-commerce companies choose to register companies in Hong Kong to collect payments and enjoy low tax rates. In this case, companies can apply for Hong Kong bank accounts to gain advantages in international payment collection. Hong Kong has no foreign exchange control measures, and companies can easily open foreign currency accounts such as US dollars and freely transfer funds without being subject to domestic foreign exchange restrictions.

Cross-border e-commerce with a certain scale will involve business in different countries and regions, and needs to frequently handle remittances between them. Hong Kong bank accounts can reduce the overall cost of funds, speed up the capital turnover period, and improve the efficiency of capital use. At the same time, Hong Kong local accounts are equipped with company cards, which can be used for cash withdrawal operations in China, and companies can also manage funds 24 hours a day through online banking .

So how do cross-border e-commerce sellers apply for a Hong Kong bank company account? To apply for a Hong Kong bank company account, a mainland enterprise must first register a Hong Kong company, which can be done by entrusting a licensed secretarial company.

The list of account opening documents required by each bank is not exactly the same. Some banks will formulate their own policies based on their own business strategies and risk assessments.

Normally, banks will request the following information based on three aspects:

Among them, the company's submission of business certification documents is an important way for banks to understand the company, and different industries have different business natures and require different business certifications. Taking HSBC as an example, the business certifications that mainland e-commerce companies need to submit include sales records, capital transactions and logistics records on e-commerce platforms. If necessary, the bank may require additional supplementary documents.

If the account signatory or company director is a mainland resident, he or she must hold a Chinese passport or a Hong Kong and Macau Pass to open an account.

At present, the COVID-19 pandemic has resurfaced, and the mainland has once again launched relevant epidemic prevention and control measures. So, during the epidemic, when sellers cannot come to Hong Kong , how can they apply for a Hong Kong bank company account ?

First of all, a bank account can only be applied for after the company is established, so the Hong Kong company registration documents must be prepared in advance before opening an account. Since every private company needs a company secretary who lives in Hong Kong or has a registered office or place of business in Hong Kong, mainland companies can find a licensed secretarial company in Hong Kong to handle the company establishment and future daily operations, saving the time of going to Hong Kong in person.

For opening a bank account, some banks may require all directors of the company to go to the bank in person and sign in front of the bank staff; some banks may require two or half of the directors to go to the bank in person. However, if a company director cannot come to Hong Kong in person, he can complete the signature witnessing procedure at a local branch or sub-branch, just like opening an offshore account.

At the same time, sellers need to understand that bank accounts opened in Hong Kong do not distinguish between local or offshore accounts, and are all considered Hong Kong bank accounts. Therefore, as long as the Hong Kong company registered by the seller opens a bank account in Hong Kong, it is a Hong Kong bank account and enjoys the advantages of international remittance and fund transfer mentioned above.

When registering a Hong Kong bank account, sellers need to clarify these issues

First, sellers cannot open personal accounts in Hong Kong in their own names . Personal accounts can only be used for personal financial management and transactions. As major banks are becoming more and more strict with anti-money laundering and risk management, if personal accounts receive frequent remittances from other company accounts without justifiable reasons and are found by banks to be used for business transactions, there is a chance that the account will be frozen or restricted for violating the code. Large companies will not rashly remit money to personal accounts that do not match the names of their competitors.

Moreover, when the company needs to conduct audits and pay taxes, it needs to use the company account records to complete them. In the future, if the company hopes to obtain diversified products such as low-interest loans or corporate credit cards in Hong Kong, the company account records will also help banks conduct credit assessments. Therefore, opening a company account to handle frequent large-scale fund transactions is safer and more convenient than using a personal account.

Then, if the name on some of the application materials does not match the company owner, you need to provide relationship proof documents. Many bank account applicants need to spend a lot of time communicating with the bank because the names do not match . In fact, the easiest and quickest way is to submit relevant relationship proof documents when you submit the proof. For example, if the online store owner is an employee of your company, when you prepare the company background certificate, don't forget to attach the employee's employee contract or salary record to prove your relationship. If your company's business license shows your spouse's name, you need to attach your marriage certificate.

Secondly, sellers can use monthly statements from e-wallets such as Alipay or WeChat Pay to provide proof of fund transaction records . Alipay or WeChat Pay are the most commonly used payment methods in the Mainland, so some e-commerce companies will choose to bind e-wallets for payment and collection. In this case, Hong Kong banks may require you to submit proof that the relevant transactions in your Alipay or WeChat Pay account are related to business needs.

If your Alipay account is a personal account, you can submit documents that can prove that the account holder and the corporate legal person are the same person or have a reasonable business relationship; if it is a corporate account, you need to prove that the account name is consistent with the name on the business license. At the same time, in both cases, you need to submit sales contracts and other documents that can prove that the fund transaction is related to the business.

Finally, there are generally no restrictions on transferring money from a Hong Kong bank company account to the mainland.

Almost all mainland cross-border e-commerce companies have their main businesses located in the mainland, so they need to pay domestic costs and expenses . You need to transfer the money in the Hong Kong company account to the mainland account for foreign exchange settlement or directly withdraw cash in the mainland. Theoretically, there is no limit to the transfer amount, but if you encounter bank review, you need to provide corresponding business certificates.

After successfully opening an account, sellers need to pay attention to four aspects

While enjoying the business convenience brought by Hong Kong bank accounts, don’t forget to carefully maintain the security of your account and funds. Especially in the context of CRS, avoid having your account frozen due to abnormal circumstances or violations. You should pay attention to the following four aspects:

The background is real and the transactions are normal. If you only have a single offshore company and account, no actual related companies and transactions, but have relatively large foreign exchange transactions, you need to explain the situation to the bank, otherwise it is very likely to be frozen and cancelled; therefore, it is very important to have related companies in the mainland and have normal trade and payment transactions.

At the same time, you should avoid not using your Hong Kong bank account for a long time or not doing business, as the chance of it being cancelled is very high. In addition, when a long-idle account is suddenly activated for unknown reasons or an account with a small amount of cash flow suddenly has abnormal capital inflows, and a large amount of funds are received and paid in a short period of time, these are suspicious behaviors that banks will pay special attention to.

Companies associated with Hong Kong bank accounts must conduct regular audits. When banks conduct regular spot checks on bank accounts, clients are required to provide the company's audit report. If they fail to provide it, their bank accounts may be frozen.

Do not frequently make large-amount payments and receipts (to the same payer or payee) in a short period of time. For example, if you deposit USD 50,000 into your account on the same day and transfer it to another account of your company or individual on the same day or the next day, or transfer it overseas, this does not meet the payment needs of production and operation.

Do not trade with countries in high-risk areas. Try not to trade with sanctioned countries or countries with very unstable economy and politics. These countries often cannot directly remit foreign exchange, and usually remit money through third countries or offshore accounts. It is difficult to explain the source and purpose. The account will be listed as a suspicious account by the bank and then be frozen accordingly. For example, Iran, Syria, North Korea and other countries and regions.

In addition, managing foreign exchange risk is also a key factor that contributes to the success of cross-border business. After the foreign currency is received, it will be affected by exchange rate fluctuations, and the company may not immediately remit it back to the mainland to exchange it for RMB; some accounts receivable may take several months or even years to recover. While the business is booming, it is also essential to manage foreign exchange risks and reduce losses.

This article ends here and I will continue to offer you a benefit. HSBC Hong Kong and Eagle Bear Exchange have cooperated to provide a green channel for cross-border e-commerce companies to open accounts. If you are recommended by Eagle Bear Exchange to open an account with HSBC Hong Kong, you can enjoy the advantage of not going through Hong Kong and opening an account with video witness in the Mainland first. No appointment is required for account opening, and there is no requirement for pre-depositing funds in the account! Interested sellers can click the link below for details ~ https://www.aiecoms.com/hk_bank

Payment

Bank Account

Seller