Asset Transfer
In this section you will find information on the best practice to begin transferring your assets and preparing your finances for a successful transition.
Before immigrating, you may wish to open an offshore bank account to transfer financial assets overseas.
The key is that funds in an offshore account will only be subject to the regulations prevailing at the country where the account is opened.
For example, if you open an offshore account in the UK, the funds in it are only subject to UK regulations. If Hong Kong implements foreign exchange control, or if your bank account in Hong Kong is frozen, the offshore account will not be affected.
Offshore accounts can be opened through local banks with overseas branches (such as Citibank), overseas securities banks (such as Firstrade, Interactive Brokers, Charles Schwab and TD Ameritrade), virtual banks and overseas banks.
Note: Interactive Brokers offer both Hong Kong account and US account; only the US account is considered an offshore account and is protected by the US Investor Protection Company.
Open Account Through a Local Bank
Choices include Citi, HSBC, DBS and Standard Chartered. The advantage is that you can communicate with the staff directly at a branch in Hong Kong.
Currently, HSBC has the lowest threshold. A HSBC One and Personal Integrated Account holder can open an offshore account with a zero balance requirement.
Most other banks require a minimum balance of over one million Hong Kong dollars.
Some banks may require customers to provide reasons for opening an offshore account. Common reasons are immigration, overseas property purchase, investment needs, etc.
The websites of these banks do not have details on how to apply for an offshore account, and usually need advance booking to go through the process. You should call or visit a branch to enquire if necessary.
Open Account Through Overseas Securities Firms
The threshold is relatively lower, some don’t even have a minimum deposit requirement.
It is advisable to choose securities firms protected by the Securities Investor Protection Corporation (SIPC), which compensates investors for up to US$500,000 if the securities firm goes bankrupt.
Some securities companies provide Debit Cards, but would require a certain amount of balance before being able to open the account.
The list of securities firms protected by SIPC can be viewed on their website.
Open Account Through a Foreign Virtual Bank
You can simply apply online. Popular choices in the UK are Monzo, Revolut, and Starling Bank.
Money held in all authorised banks in the UK, virtual banks included, is protected by The Financial Services Compensation Scheme (FSCS) up to £85,000 per eligible person, per bank (up to £170,000 for joint accounts). Some virtual banks will also provide Debit Cards.
Virtual banks are also monitored and regulated by the local government. Identification documents such as passports are required when opening an account.
Virtual banks only accept residents of designated countries to open accounts, so you should be prepared to provide local addresses and local phone numbers when applying.
Please note that the virtual banking system may detect that the user is not in the local area and thus may block the account. Therefore, if logging into the bank app or website online from overseas, users should use the VPN of the country where the virtual bank is.
Open Account Directly with an Overseas Bank
The threshold is generally not that high. The more common options include Barclays Bank in the UK and East West Bank USA in the US.
To open an account in Barclays, for example, you need to submit certified true copies of address proof, passport and bank statements to the bank for approval. Minimum deposit requirement is £25,000 while maximum is £50,000.
If you open an account with East West Bank USA, since this bank also has an office in Hong Kong, you can directly use your Hong Kong address and Hong Kong phone number for account opening. The Premier Savings Account charges a monthly service fee of US$3, unless an average monthly balance of US$2,500 is maintained. Each account is insured up to $250,000 by the Federal Deposit Insurance Corporation (FDIC).
Risk
It is worth noting that opening an offshore account also carries certain risks.
As the financial and legal systems are different in different countries (for example, the deposit protection caps may be different), and if the chosen bank happens to close down, there is no guarantee that all the funds can be retrieved.
Some banks charge additional fees when opening an offshore account. These fees should also be taken into consideration when opening an account.
There is exchange rate risk when converting Hong Kong dollars into foreign currencies
Considerations should also be given to the tax rates of different countries regarding gains from various investment vehicles.
Keeping Bank Statements for at Least Six Months
It is important to keep bank statements of your existing accounts for at least six months before moving to the UK. UK banks may question the source of funds when large sums of money are transferred into a UK account. They may request evidence to prove where the money is coming from. Previous bank statements will be very useful for this purpose.
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