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Tel：+86 400 118 5939In recent years, with the continuous development of the domestic economy, more and more mainland businessmen have gone to Hong Kong to register companies. And Hong Kong has not stopped the pace of reform. In addition to its traditional advantages as an offshore financial center, Hong Kong is continuously increasing its advantages in attracting capital. In order to strictly control the safety of incoming capital, Hong Kong has also implemented many measures, such as screening incoming capital, increasing the required documents for auditing Hong Kong companies, and proposing KYC management regulations. Below, Hongyuan International Consulting provides a detailed introduction to the relevant knowledge of KYC for Hong Kong company registration.
1. What is KYC due diligence
KYC， Fully understanding the customer, similar to SCR but with many differences. It is the latest management regulation required by the Hong Kong Registry at the end of July 2018 for Hong Kong companies registered by licensed secretaries. 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 for registering and establishing Hong Kong companies by the Hong Kong Registry have become increasingly standardized and strict. The KYC Management Regulations for Hong Kong Companies were introduced against the backdrop of CRS tax exchange and the Hong Kong government's strong crackdown on money laundering.
2. What are the contents involved in KYC due diligence for Hong Kong companies
KYC due diligence for Hong Kong companies requires a thorough understanding of the actual controller, organizational structure of the holding company, and basic information of the company. The contents of KYC due diligence include:
(1) Director and shareholder information
(2) Important controller information
(3) Source of funds (start-up capital for Hong Kong companies)
(4) Business scope
(5) Business address
(6) Customer's location (such as Chinese Mainland, Hong Kong, UK, USA, etc.)
(7) Supplier's location (such as Chinese Mainland, Hong Kong, the United Kingdom, the United States, etc.)
The purpose of KYC review is to prove whether the directors and shareholders of the company are high-risk individuals (such as members of terrorist organizations, government wanted individuals, etc.), understand that the funds used to establish the company are from legal sources and not from illegal channels, that the products operated are legal, and that the trading partners are also non high-risk individuals and regions.
3. What are the impacts of not conducting KYC due diligence
As required by the Hong Kong government, all existing Hong Kong companies must complete all KYC due diligence by December 31, 2018, and every newly established Hong Kong company must conduct KYC due diligence for inspection by Hong Kong government law enforcement personnel at any time. If Hong Kong fails to cooperate with the secretary company in completing KYC due diligence in a timely manner, it will affect the operation of the Hong Kong company and even result in fines.
4. Regular operation, KYC is not scary
Some actual controllers of Hong Kong companies are unwilling to cooperate with the secretary company in conducting KYC due diligence, believing that it will affect personal and company information. It should be noted that not only does the Hong Kong government require companies to provide due diligence documents, but various financial institutions both domestically and internationally have also begun to strictly require companies to provide more documents to prove that they are operating legally. As long as the Hong Kong company operates legally, there are no non compliant operations in the Hong Kong account, and the company's fund transactions are normal, KYC due diligence is not scary.
Hongyuan International Consulting suggests that the operation and maintenance of Hong Kong companies after their establishment is a very rigorous and professional matter. Professional secretarial service agencies can effectively convey the latest policy regulations and provide professional solutions to help you avoid risks.
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