Offshore banking and brokerage accounts are popular these days, and many people mistakenly believe that they are only available to those with over HK$1 million in assets. However, that’s not the case. In fact, you can easily open an offshore account not only through traditional offshore banks but also through offshore brokerage accounts with more flexibility.
We’ll be covering all the pros and cons of having an offshore account and a thorough comparison of the offshore banking and brokerage accounts in Hong Kong, so you can make an informed decision with MoneySmart!
Table of contents: Offshore accounts in Hong Kong
- What is an offshore account?
- Why should you open an offshore account?
- The potential risk of having an offshore account
- What kinds of offshore accounts are available in Hong Kong?
- Opening an offshore account with traditional banking: A higher asset threshold is expected
- Opening an offshore account with overseas brokerage account: Lower capital requirements
- Opening an offshore account with overseas virtual banks
- Frequently asked questions: Offshore banking and offshore brokerage accounts
What is an offshore account?
An offshore account is an account that is open outside the country you’re residing in, and the account is not only limited to banking but also brokerage accounts. For instance, if you’re residing in Hong Kong and you have an international account with Citigold, the account is then regarded as an offshore account.
Why should you open an offshore account?
Offshore banking is a popular choice for individuals who want to diversify their assets or businesses that operate internationally. By opening an offshore bank account, you can take advantage of the benefits of an offshore account through multi-currency banking, diversify the risk of assets, and enjoy tax benefits from other countries.
Multi-currency banking
Offshore bank accounts offer a range of benefits, one of which is the ability to carry out multi-currency banking. Such accounts usually offer services in different currencies, including the currency of the country where the account holder is from, making it easier to do business across borders.
Diversify the risk of assets
In times of extreme circumstances, the government may implement foreign exchange controls that could result in frozen foreign currency deposits held within Hong Kong’s banking system, even if the assets are stored in foreign banks’ Hong Kong branches. In that case, an offshore banking account can help you avoid foreign exchange controls and reduce the risk of frozen assets.
Enjoy tax benefits from other countries
One way to enjoy better tax benefits is by putting a portion of your assets in an offshore account where the tax rate is lower. This can help you save money on taxes and maximize your investment returns.
The potential risk of having an offshore account
While offshore banking and brokerage accounts provide increased flexibility, it’s important to be aware of the potential risks associated with having an offshore account. Since offshore accounts aren’t subject to the same laws and regulations as domestic accounts, it’s essential to research and understand local regulations before opening an account.
Asset accessibility issue
Accessing money held in an offshore bank account may pose difficulties. This process may be even more challenging than accessing your money in a domestic bank account. Transactions made using their debit card may take three to seven business days to process, including purchases and withdrawals. It might be challenging to close deals quickly or on the same day.
Higher banking fees
Additionally, they can be more expensive due to the high fees charged by financial services firms, who know their clients are typically not locals. It’s also important to consider the relevant fees before applying for an offshore account.
What kinds of offshore accounts are available in Hong Kong?
When it comes to opening an offshore account in Hong Kong, you have 3 options: apply with a foreign bank that has a presence in the city, open an offshore brokerage account, or sign up with an online virtual bank. To get started, you’ll need to determine which type of offshore account is right for you. Here are a few examples of each offshore account type:
| Offshore Account Type | Examples |
| Traditional Offshore Banking Account | Citibank, HSBC, Standard Chartered Bank, DBS |
| Offshore Brokerage Account | Interactive Brokers, Saxo, Charles Schwab |
| Virtual Banks | N26, Monzo, Monsee |
The pros and cons of each offshore account type
To help you make a better decision, here are the pros and cons of having an offshore account:
| Offshore Account Type | Pros | Cons |
| Traditional Offshore Account | Easy to manage with client managers | A high minimum deposit |
| Offshore Brokerage Account | Easy to open | Not regulated by local law |
| Virtual Banks | Easy to open, easy to use, no minimum deposit | May require a residence address in a foreign country |
Opening an offshore account with traditional banking: A higher asset threshold is expected
Many banks in Hong Kong provide services for customers to open overseas bank accounts, but they usually require them to be existing customers of the bank. So, if you’re already a client of a traditional bank, such as Citigold’s client, you might not need to open a new offshore banking account.
And many established banks offer global banking services that allow you to manage multiple accounts across different regions of the world from a single platform. This means you can easily oversee all your accounts without the hassle. However, traditional premier banking typically requires a higher asset threshold for the minimum deposit amount.
So, this might not be an option for everyone.
What kinds of documents do you need to open an offshore banking account?
To open an offshore banking account, here are some of the basic items you may want to prepare in advance: Customers may be asked about the reason for opening the account, and the actual requirements may vary depending on the customer’s situation and local regulations.
The documents required for account opening mainly include:
- Identity documents or travel documents
- Address proof
- Income proof
- Documents required due to personal circumstances or local laws
After submitting the required documents for account opening, the process can take from 1 day to 20 working days, depending on the bank and the location of the account opening. In addition, some banks may require the applicant to personally confirm or activate the account at a local branch. It is recommended to check with the staff before opening an account.
Which banks offer an offshore banking account in Hong Kong? Hong Kong offshore account comparison
There are many banks that provide offshore banking accounts in Hong Kong, including Citibank, HSBC, Standard Chartered Bank, and DBS. Note that each bank has different account opening requirements.
| Banking Account Type | Account Opening Requirement | Account Opening Fee |
| Citibank Citigold | HK$1,500,000 | Free |
| Citibank Citigold Private Client | HK$8,000,000 | Free |
| HSBC Jade | HK$7,800,000 | Free |
| HSBC Premier | HK$1,000,000 | Free |
| HSBC One | HK$0 | Free |
| Standard Chartered Priority | HK$1,000,000 | Depends on the region |
| DBS Treasures | HK$1,000,000 | Free |
Citigold / Citigold Private Clients: Offshore account
If you are a Citigold client, you can enjoy quite a lot of perks from opening an offshore banking account, such as instantly transferring funds to your own or third-party Citibank accounts in more than 15 countries and regions worldwide without paying any fees and an overview of all your accounts across the globe.
| Banking Account Type | Minimum Required Deposit | Fee for Opening Offshore Accounts | Offshore Account Location Available |
| Citigold | HK$1,500,000 | N/A | United States, Singapore, the United Kingdom, Canada, etc.
|
| Citigold Private Client | HK$8,000,000 | N/A |
To enjoy Citigold and Citigold Private Client services in both Hong Kong and the US, applicants must meet the minimum balance requirements of both locations. For example, if you want to open an offshore account in the US, you must have at least US$200,000 in a local account and at least HK$1.5 million in a Citigold account in Hong Kong to qualify as a Citigold client.
How to open a Citigold offshore account?
To open a Citibank offshore account, you must first apply on the Citibank website, provide personal information, reserve a meeting date, time, and location, answer relevant questions, and choose to become a Citigold or Citigold Private Client user.
After submitting the online application, bring the required documents, including identity documents or travel documents, address proof, and a taxpayer identification number (TIN) or equivalent proof, and go to the branch to complete the account opening procedures.
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- HKD Time Deposit Rate
- up to 4.2%
- Foreign Currency Time Deposit Interest Rate
- up to 6%
- Highest Cash Rebate
- HK$41,800
HSBC Jade / One / Premier: Offshore banking accounts
HSBC offers a global banking service that allows you to open an offshore account in over 30 countries/regions. Having an HSBC offshore account means you can enjoy the same level of service across different regions.
Here is the account opening requirement for different HSBC banking accounts:
| Banking Account Type | Minimum Required Deposit | Offshore Accounts Location Available |
| HSBC Jade | HK$7,800,000 | Argentina, Australia, Bahrain, Bangladesh, Bermuda, Canada, China, Egypt, Expat Offshore (Jersey), France, Greece, India, Indonesia, Macau SAR, Malaysia, Malta, Mauritius, Mexico, New Zealand, Oman, Philippines, Qatar, Saudi Arabia, Singapore, Sri Lanka, Taiwan, Turkey, United Arab Emirates, United Kingdom, United States, and Vietnam
|
| HSBC Premier | HK$1,000,000 | |
| HSBC One | HK$0 |
How can you apply for an HSBC offshore banking account?
Opening an HSBC offshore banking account is a breeze! Here are just a few easy steps to get started:
Choose your destination: Choose your location and the destination where you intend to open an offshore account. We can help you open an account in over 30 countries/regions.
Check if you are eligible: You must be 18 years old and have a valid reason for opening an offshore account. Depending on the destination country, you may need to meet other application requirements.
Start the application: After starting the application process, we will inform you whether you should open an account online, through the International Banking Department, or in person at a branch, and list the documents you need to provide.
Standard Chartered Priority: Offshore account
| Banking Account Type | Minimum Required Deposit | Offshore Accounts Location Available |
| Standard Chartered Priority | HK$1,000,000 | Singapore, Malaysia, etc. |
Standard Chartered Bank only accepts offshore accounts from priority banking clients. After making an appointment with a customer manager, clients can go to one of the seven designated priority banking centres to complete the process without incurring any fees. The opening procedures, requirements, and processing time depend on the requirements of the relevant countries or regions.
DBS Treasures: Offshore account
| Banking Account Type | Minimum Required Deposit | Offshore Accounts Location Available |
| DBS Treasures | HK$1,000,000 | Singapore
|
| DBS Treasures Private Client | HK$8,000,000 |
DBS offshore accounts are only available in Singapore, but customers can transfer funds overseas for free and even transfer funds to 44 countries, such as the United Kingdom and the United States, on the same day. In addition, DBS offshore account holders can enjoy various rewards by meeting the conditions set by the bank, such as using DBS Express Transfer for overseas transfers.
How to open a DBS Treasures offshore account?
As an alternative to traditional methods, DBS offers the option to open an offshore account using their mobile app. This method is available to Hong Kong permanent residents who are over 18 years old and not US residents, US citizens, or holders of a US permanent resident card (green card), and who are also new or existing credit card customers of DBS Bank. Alternatively, customers can provide their personal information, mobile phone number, and email on the DBS Bank website and schedule an appointment to open an offshore account in person at a DBS Bank branch.
Opening an offshore account with overseas brokerage account: Lower capital requirements
Offshore banking and brokerage accounts are not just for the wealthy. In Hong Kong, there are even more options for those looking to invest offshore. With lower capital requirements, people can gain access to investment opportunities that may not be available through local banks or brokerages. Plus, some securities firms offer debit cards for added convenience. If you’re considering moving your assets offshore, an overseas brokerage account is worth exploring.
| Overseas Brokers | Minimum Deposits | Commission | Protection Coverage |
| Saxo | HK$10,000 | US$3 (US stocks/ ETF) | Danish Guarantee Fund |
| Interactive Brokers (US) | US$10,000 | US$10/month | SIPC |
| Charles Schwab International | US$25,000 | US$0 | SIPC |
Saxo: Both local and offshore accounts are available
Saxo Bank, the parent company of Saxo Capital Markets Hong Kong, is a licenced and regulated Danish bank that offers an online investment trading platform globally. Any Hong Kong resident can easily apply for a Danish offshore account to hedge their risk as well as invest in popular markets like Hong Kong, the U.S., the U.K., Japan, Singapore, and many more.
Here are the International Saxo website and the Hong Kong Saxo website.
If you are one of the savvy investors, you can also enjoy Saxo’s exposure to over 40,000+ investment instruments, ranging from stocks, bonds, funds, forex, and options.
- Min. Commission Fee Japan Stocks
- ¥800
- Min. Commission Fee US Stocks
- US$1
- Min. commission Fee HK Stocks
- HK$15
What’s the difference between Saxo’s international account and Saxo’s Hong Kong account?
You may wonder what the difference is between Saxo’s international account and Saxo’s Hong Kong account. Here is the comparison:
| Hong Kong account | International account (offshore account) | |
| Account location | Hong Kong | Denmark |
| Deposit and fund transfer methods | Bank transfer or cheque | Bank transfer or credit card |
| Minimum account opening deposit | HK$10,000 | US$2,000 |
| Investment products | 40,000+ instruments | 40,000+ instruments |
| Protection | Investor Compensation Fund: HK$500,000 for securities and futures | €100,000 for deposit, €20,000 for securities |
Funds deposited with Saxo in Denmark are protected and regulated in accordance with European Union laws. Saxo is also licenced to operate in more than 15 jurisdictions around the world, including Hong Kong, Denmark, the U.K., Singapore, and more, making Saxo a reliable global platform.
Through an international platform like Saxo, users can easily explore investment opportunities beyond Hong Kong and the U.S. Some investors may have insights into markets like the U.K., Singapore, Japan, China, Australia, Germany, Ireland, Italy, Sweden, or South Africa. And Saxo is packed with more than 19,000 stocks and 3,000 ETFs, giving portfolio flexibility to investors from geography, sector, and instrument standpoints.
Charles Schwab: Higher entry for both Hong Kong and international accounts
Charles Schwab’s account has an international version and a Hong Kong version. Although both versions hold funds in the United States, the Hong Kong version is registered with the Hong Kong Securities and Futures Commission and is still subject to local regulatory oversight. If you wish to fully offshore your funds and account, you can apply for Charles Schwab’s international version.
What’s the difference between Hong Kong’s Charles Schwab and international’s Charles Schwab?
Charles Schwab offers both a Hong Kong version and an international version of its account. While both versions hold funds in the United States and are protected by SIPC, the Hong Kong version is managed by Charles Schwab Hong Kong and is subject to local regulations. This means that funds may not be completely offshore. On the other hand, the international version is fully offshore.
In addition, Citibank’s international version will provide a debit card for users to withdraw cash from ATMs, similar to an offshore bank account.
However, note that it is difficult to apply for the international version with a Hong Kong address. The Hong Kong version can be opened at a branch, and even if you apply online, you still need to go to the branch to submit proof of identity.
| Charles Schwab Hong Kong | Charles Schwab International | |
| Minimum Deposit | US$25,000 | US$25,000 |
| Online Commission for US Stocks/ETFs | Free | Free |
| Custodian Location | U.S. | U.S. |
| Protection | SIPC | SIPC |
| Deposit Methods | Wire transfer (U.S. account) or check (Hong Kong local address) | Wire transfer (U.S. account) or check (U.S. address) |
| Customer Service Support | Hong Kong | U.S. |
How to open an international Charles Schwab account?
For a personal or joint account, the minimum deposit for opening an international Charles Schwab account is US$25,000 (approximately HK$195,000), which can be used as a combination of funds and securities.
To apply for a Charles Schwab International account, select “Other Region (English)” on the Hong Kong account opening page, choose the UK or another non-Hong Kong region, and follow the online instructions to submit the application. The required documents and information are similar to those for the CSHK account.
- Dividend Collection Fee - US Stocks
- 0%
- Minimum Commission - US Stocks
- US$0
- Min. Account Funding
- US$0
Interactive Brokers: Funds are still kept in Hong Kong
It’s worth noting that many Hong Kong residents use Interactive Brokers for their offshore accounts, but the funds are actually stored in local bank accounts and subject to Hong Kong’s regulations. So, it’s not a true offshore account, and the funds remain within Hong Kong’s banking system.
However, Interactive Brokers Hong Kong Limited is regulated by the Hong Kong Securities and Futures Commission, and regardless of whether you’re depositing US dollars, Canadian dollars, or British pounds, the assets are under the investor protection compensation limit of HK$500,000.
- Min. Commission Fee US Stocks
- US$0.0035
- Min. Commission Fee HK Stocks
- 0.015%
- Account Opening Min. Funding
- HK$10,000
What should you consider before applying for an offshore brokerage account?
Offshore brokerage accounts have a lot to offer, especially when compared to traditional offshore banking. Not only do they come with lower entry barriers, but they also offer more investment products that you can put your money into. However, before you jump into opening one, it’s important to consider a few things:
- Accessing funds through offshore brokerage accounts will erode some investment returns due to exchange rates and remittance fees. Buying US stocks through US brokerage firms may be slightly more expensive than using local commission-free or low-fee brokerage firms.
- When opening an account, it is best to choose a broker that is backed by the Securities Investor Protection Corporation (SIPC) in the U.S. Even if the brokerage firm goes bankrupt, investors can receive compensation of up to US$500,000, providing some assurance. The list of brokers can be found on the SIPC website.
- Some brokerage firms will provide debit cards for daily use, but a designated amount of funds must be held in the account.
Opening an offshore account with overseas virtual banks
You may be familiar with local virtual banks like MOX and livi bank, but have you considered taking your banking international? You can open an account, deposit or withdraw money, take loans, and more through their website or mobile app. With longer service hours and no foreign currency transaction fees on their debit cards, they’re a convenient choice for the savvy traveler.
Popular options include Monzo, Monsee, Revolut, and N26. Keep in mind, however, that some virtual banks may require a residence address or phone number in the UK or EU and may only accept certain passports. Be sure to check their requirements before applying.
| Virtual Banks | Countries | Remarks |
| N26 | Germany | European residential address required; European bank account IBAN available; high withdrawal fee. |
| Monzo | U.K. | Support GBP only |
| Monsee | U.K. | Support GBP, EUR, and RON |
| Revolut | U.K. | Low exchange rate; support multiple currencies |
Frequently asked questions: Offshore banking and offshore brokerage accounts
What is the difference between offshore accounts and global banking?
Many multinational banks, such as HSBC and Citibank, offer global banking services that allow you to manage accounts across different countries or regions with one account. These accounts are actually offshore since they are subject to different legal jurisdictions in the countries they are held in.
What is an offshore jurisdiction?
An offshore jurisdiction refers to a geographical area that is located away from home shores. Offshore financial centers are often referre to as offshore jurisdictions.
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