Banking in Hong Kong is flourishing, and mostly due to the sound and well-organized regulation framework. The Hong Kong Monetary Authority (HKMA) oversees and regulates financial institutions. The Securities and Futures Commission (SFC) supervises securities and futures transactions in Hong Kong. If you intend to provide financial services in Hong Kong, this review will help you keep your eye on the ball.
Hong Kong Banking Sector in brief
The concentration of financial institutions in this jurisdiction is one of the highest. More than 70% of the world's largest banks have branches in Hong Kong. It is noteworthy that banks here can offer accounts in 10 currencies of the world.
Banks operating in Hong Kong enjoy a lot of advantages such as a high level of security, anonymity, and the absence of a special agreement on the exchange of information. A lot of attention is paid to the security of customer account servicing.
The Hong Kong banking system has Due Diligence and KYC format requirements that establish the required size of authorized capital and assets. Interestingly, there’s a specific requirement regarding the name of a company or bank in this jurisdiction. In particular, the name should clearly indicate the scope of financial institutions. Banks with abstract names may not be registered at all.
Types of Banks
There are broadly speaking three types of banks. The Western banks which use Hong Kong as an operations base for Asia. The big Mainland banks and local banks, from which the so-called "global local" banks can be distinguished. Among these are such huge and reputable banks as HSBC and Standard Chartered which are considered remnants of the British empire. The rest are smaller local banks that operate in a highly competitive environment.
Financial Licensing in Hong Kong
If you want to start financial business in Hong Kong, you will need authorization from the regulators. In order to obtain a banking license in Hong Kong, you must apply to HKMA. Here you must apply to obtain both full license and part-license to provide banking services.
Companies operating in the field of securities and futures need to seek authorization with the Hong Kong Securities and Futures Commission.
Interestingly, you can set up a financial services company in Hong Kong without obtaining any license. Companies of this type are allowed to provide such consumer services as investment consulting, investment fund management, brokerage, insurance service and some other.
If you need additional information, you can order a consultation on the legal framework for financial services in Hong Kong from our experienced law specialists. You can also get comprehensive answers about the nuances of obtaining a banking license in Hong Kong by contacting us directly using the form below.