There are lots of things to think about when moving to another country, such as finding accommodation, organizing healthcare, or potentially even finding a school for your kids. However, one of the most important initial things that you need to do is make sure your finances are in check and open a local bank account.
One of the biggest challenges for Expats can be balancing their finances back home, as well as their current country of residence. This can become quite complex with multiple currencies, and transferring money back and forth between countries. There can also be significant tax implications to consider.
The official currency in Hong Kong is the Hong Kong dollar (HKD). Similar to the US Dollar, each dollar is divided into 100 cents.
Opening a Bank Account in Hong Kong
It is important to put some thought into which bank you would like to open in Hong Kong, as having the right banking arrangements is really key for all Expats. The core focus of your bank account should be that your money is easy to access, and transfer between countries. Security of your money should also be essential, so it is always recommended to look towards reputable banks which are widely known. Make sure that your chosen bank is complying with international regulations.
Some popular banks among Expats in Hong Kong are HSBC, Standard Chartered and Citibank. However, there are also some popular local options in Hang Seng Bank, Bank of China, or DBS.
Most Expats will have a bank account back home, and then another local account in their current country of residence. Some Expats may also have an offshore bank account, as sometimes this can make the transfer of money between accounts a little more effective for saving, investing and managing your money. For example, in certain circumstances, having your salary paid into your offshore account can add extra flexibility and certain tax benefits. In addition, it can be more beneficial to transfer money back home from your offshore account, rather than your local Hong Kong account, as it can be associated with less fees.
It is possible to open an offshore bank account before you leave home, as this will give you easy access to your money upon arrival in Hong Kong. If choosing a bank with a global network (such as HSBC) then opening a local bank account in Hong Kong can be a little easier, as it is likely they can transfer your credit history from back home and all data they need will be ready for you the day you step off the plane in Hong Kong. Comparatively, signing up to a bank with no linkages to your home bank can lead to extra paperwork and time in order to get your account set up.
Having an offshore bank account in addition to your local bank account will give you the opportunity to keep your money in a centralized location. This can be really beneficial for Expats who are regularly moving to different locations.
An offshore bank account generally provides a more tax-efficient way to save your money and invest. However, it is always recommended to discuss this with an expert prior to moving to Hong Kong as the benefits will vary greatly depending on your personal circumstances. Before making any decisions, and even before packing your bags, it is always recommended to get advice from someone who has experience with Expat finances in Hong Kong. There is a huge variety of banking services provided in Hong Kong, and it can seem a little daunting without an expert’s input.
It isn’t necessary at all to look into an offshore bank account if you are moving to Hong Kong, a local one will suffice and adds less complexity. However, it is an option to discuss with your financial adviser to see if it would benefit your circumstances.
Special Expat Bank Accounts
Some bank providers also offer special bank accounts which are specially made to support Expats in Hong Kong. For example, this account by HSBC. The difficulty with some of these specialty accounts is that the minimum deposit requirements can be quite high. For example, the HSBC account requires a salary of over £100,000 (or equivalent) as well as a minimum deposit of £50,000 (or equivalent). In most cases, even a standard bank account in Hong Kong will require a minimum nominal deposit. The case for a regular bank account is normally around HKD$1,000, which is about £100 or $130.
Other Tips for Expats in Hong Kong
- You should check the charges made on your bank account that you are setting up, and consider this in your choice of banking provider. Some banks require minimum monthly balances, and will charge additional costs for going below this amount.
- It is worth considering that receipt of payment of your salary is likely to happen significantly quicker if you are banking with the same bank as the company you work for.
- In order to set up a Hong Kong bank account, you will need a passport, letter of employment, a Hong Kong ID, Proof of Address, Copy of your permanent address in your home country and your social security number. This is somewhat more stringent than other Expat friendly countries.
- Online banking can be quite slow in Hong Kong – It is recommended to visit a branch directly.
- If you travel a lot, your bank will need to be notified in order to use your account to withdraw cash or spend abroad