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Hong Kong is a city of opportunity, creativity and enterprising spirit, an international metropolis with highly developed information, and a free trading port in the world. Therefore, registered Hong Kong companies are favored by many investors. However, in recent years, Hong Kong's corporate management policies have become more and more standardized. In order to prevent Hong Kong's companies from operating irregularly, the Hong Kong government has increased the examination of the information that Hong Kong companies need to submit and put forward the KYC Management Ordinance.
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What is KYC due diligence
KYC (i.e. know your customer), i.e. fully understand your customers, is similar to SCR but has many differences. It is the latest management Ordinance required by the Hong Kong registry at the end of July 2018 for Hong Kong companies registered by licensed secretaries on their behalf. It is mainly to maintain the normal operation of Hong Kong companies and the normal use of Hong Kong company accounts. With the implementation of CRS, the requirements of the Hong Kong registry for the incorporation of Hong Kong companies are becoming more and more strict. The KYC regulations of Hong Kong companies are introduced against the background of CRS tax exchange and Hong Kong government's efforts to crack down on money laundering.
What does KYC due diligence of Hong Kong company involve
KYC due diligence of Hong Kong company needs to fully understand the actual controller, organizational structure of the holding company, basic information of the company, etc. the contents of KYC due diligence include:
1. Verification of company establishment information: it is necessary to verify the basic information of Hong Kong company name, business registration, registered address, business scope, etc.
2. Verification of company member information: the Secretary company needs to verify the basic information of the actual controllers (shareholders, directors and ultimate beneficiaries) of Hong Kong company. The basic information that the actual controller of Hong Kong company needs to provide includes ID card scanning copy, photo with ID card and personal KYC statement. The KYC statement of the actual controller shall be signed.
3. the Secretary company needs to verify the source of funds and wealth of the Hongkong company.
4. The Secretary company needs to verify the actual business operation of the company.
What is the impact of not doing KYC due diligence
At the request of the Hong Kong government, all existing Hong Kong companies must complete all KYC due diligence before December 31, 2018, and each newly established Hong Kong company shall conduct KYC due diligence for inspection by law enforcement officers of the Hong Kong government at any time. If Hong Kong fails to cooperate with the Secretary company to complete KYC due diligence in time, the operation of Hong Kong company will be affected, or even a fine will be incurred.
KYC is not terrible
Some of the actual controllers of Hong Kong companies are unwilling to cooperate with the Secretary company to conduct KYC due diligence, believing that it will affect personal and company information. It is important to know that not only the Hong Kong government needs enterprises to provide due diligence documents, but also various domestic and overseas financial institutions have begun to strictly require enterprises to provide more documents to prove that they are operating legitimate business. As long as the Hong Kong company operates normally, there is no non-conforming operation of the Hong Kong account, and the company's capital flow is normal, KYC's due diligence is not terrible.
The follow-up operation and maintenance of Hong Kong company is a very rigorous and professional thing. Professional agencies can deliver the latest policies and regulations in place, and provide professional solutions to effectively help you avoid risks.
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