One Hong Kong bank account manages all cross-border finances in the Greater Bay Area | Article – HSBC VisionGo

A company will only need one Hong Kong bank account for all its cross-border financial service needs when doing businesses in the Greater Bay Area.
Finance  ·    ·  5 mins read

With the rapid development of the Guangdong-Hong Kong-Macao Bay Area, or the “Greater Bay Area (GBA)”, many Hong Kong companies are hoping to tap the massive domestic market opportunities there to develop and scale up their businesses. 

Nevertheless, faced with a business environment that is entirely different from that of Hong Kong, companies may feel puzzled about how they may kickstart and operate smoothly in the GBA. This is especially true when it comes to the use of financial services, which are the cornerstone supporting the development of any business. 

Hong Kong and mainland China differ in their financial systems with respect to currencies, foreign exchange, financing and so on. Before a Hong Kong company launches its cross-border business, it should understand and get prepared for its cross-border financial service needs well ahead of time. 

Currently, quite a number of banks have offered bank account and cross-border financial services for  companies to do business in the GBA. In fact, a company will only need one Hong Kong bank account for all its cross-border financial service needs. This article will help companies understand what services one single Hong Kong business integrated account is able to provide, ranging from account opening and RMB remittance, to commercial lending and company credit card, to facilitate business operation in the GBA. 

Bank account services

If you haven’t got a business banking account in Hong Kong yet, a number of banks are able to help SMEs open bank accounts remotely, allowing eligible SMEs to complete the entire application process online. If you are now in the mainland China and are not able to come back to Hong Kong for the time being, some banks are able to open an account for you through video conference, for example, businesses can complete the identity validiation process for opening a Hong Kong bank account through video conference conducted in a mainland branch

Businesses can also make an appointment with a bank in the mainland via a Hong Kong bank to open a mainland account, including RMB and HKD accounts, and link up their Hong Kong and mainland accounts. At HSBC, for example, you can find out from a branch relationship manager the contact information of the HSBC branch in the mainland to understand on how you may open a mainland account. After opening an account, GBA customers will be able to use general banking and counter services both online and through branches and subsidiaries in Guangdong, Hong Kong and Macao. 

Currency exchange and remittance

From the perspective of Hong Kong business owners who want to expand into the mainland, the key objective of opening a bank account is essentially for the exchange and remittance of RMB in relation to their business. Many banks, such as HSBC, would facilitate their customers to exchange and transfer RMB anytime and at a lower cost, while speeding up the remittance process in order to avoid causing delay to customers’ business transactions. Some banks also provide customers with ATM card, debit card, etc. that can be used in Guangdong, Hong Kong and Macao, allowing businesses to manage their finances even more easily. 

It should be noted that exchanging for RMB in Hong Kong and mainland involves two different concepts: onshore CNY and offshore CNH, each having a different exchange rate. Therefore, owners of import and export businesses would usually have a mainland bank account and another one in Hong Kong to handle onshore and offshore RMB transactions separately. Business owners can benefit from the gap between CNY and CNH exchange rates to lower their currency conversion cost. Have a look at how businesses may make use of exchange rate differences between CNY and CNH.

When it comes to currency exchange, businesses can monitor the latest exchange rates and trends at no cost through business internet banking provided by HSBC  or other Hong Kong banks, or through other online FX tools. As such, they can manage their FX exposure with flexibility, by automating an exchange whenever a target price is reached. 

In terms of the efficiency of transfer, HSBC ’s business banking account is able to execute real-time transfer to other Hong Kong bank accounts, while cross-border remittance to a mainland supplier’s HSBC China bank account can be completed in just two hours. 

Cross-border payment (credit card, etc.)

In mainland China, digital payment is already well-developed. Some banks have provided cross-border payment channels such as WeChat or Alipay, which can be used in Guangdong, Hong Kong and Macao. Some even have their own apps for direct payment in these three locations, saving customers time and effort.

Meanwhile, some banks have offered credit cards exclusive to the GBA market, which are mostly UnionPay dual-currency credit card, allowing cardholders to pay for their daily expenses in the local currency (RMB, HKD, etc.) when they are in Guangdong, Hong Kong or Macao at a very low or even zero transaction fee. Cardholders can also earn credit card rebate while enjoying preferential exchange rate and low transaction fee. 

Taking reference to HSBC, while cardholders are entitled to airport lounge access, they can also earn RewardCash, which can be converted into air miles, and benefit from various merchant discounts. All these benefits provide a great support to employees working outside Hong Kong. 

Nonetheless, application for a business card requires more documentation than what a personal card application might require. Different types of companies, such as sole proprietorship, limited company or partnership, may need to provide different documents, so you may want to find out about the requirements when you apply. For example, you can find out from here about what is required for applying for an HSBC business card, or via this link https://www.business.hsbc.com.hk/en-gb/financing-and-credit-cards/commercial-cards/rmb-business-card

Cross-border lending

When banks provide lending services in the GBA, very often cross-border lending such as onshore debt under offshore guarantee is involved. As Hong Kong is regarded as an overseas region, onshore RMB may not be freely exchanged for HKD. A bank’s offshore branch would issue guarantee to its mainland branch in order to provide RMB line of credit to businesses. In other words, through banks, Hong Kong companies can obtain lending more easily from mainland – that is what is known as onshore debt under offshore guarantee. At the same time, banks also provide offshore debt under onshore guarantee to mainland companies’ associated businesses in Hong Kong, effectively connecting with the GBA market.  

Morever, banks also offer GBA-related loans to Hong Kong people and businesses on Hong Kong loan conditions for them to start or expand their businesses in the GBA. Other general lending services include trade finance, equipment finance, etc., which can be drawn in HKD or RMB. For example, HSBC’s “GBA+ Technology Fund” is dedicated to providing financing support to high-growth start-ups in the innovation and technology new economy in the GBA. You can also find more information via this link https://www.business.hsbc.com.hk/en-gb/hk/campaign%20sub%20page/gba-technology-fund

Insurance services 

If you have any financial dealings with businesses in the GBA, or if you travel to the GBA for business, you would inevitably be exposed to a certain level of risks, just like doing any kind of business. Some banks provide GBA insurance plans that target Hong Kong people, with terms and conditions similar to local insurance policies, such as accidental coverage, travel insurance and medical insurance, providing comprehensive protection for Hong Kong people planning to venture into the GBA.

Other services 

In addition to the services mentioned above, some banks offer tailor-made services for GBA customers in order to meet their varying needs, such as RMB bond issuance and securities investment services under the mainland-Hong Kong connect scheme. These services target specific GBA customer groups. You may want to reach out to individual banks to find out more.

Reminder: To borrow or not to borrow? Borrow only if you can repay!

Risk Disclosure:

Currency conversion risk - the value of your foreign currency and RMB deposit will be subject to the risk of exchange rate fluctuation. If you choose to convert your foreign currency and RMB deposit to other currencies at an exchange rate that is less favorable than the exchange rate in which you made your original conversion to that foreign currency and RMB, you may suffer loss in principal.
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