Foreign currency remittance: guide to opening a new foreign currency account

What are the options for foreign currency remittance in Hong Kong?

There are multiple options available for foreign currency remittance in Hong Kong. Some common methods include: 

Traditional or virtual banks: transfer foreign currency with personal e-Banking, mobile banking, telephone banking, or visit bank branches.

1. Local bank-to-bank transfers: Choose Real-Time Gross Settlement (RTGS) or Clearing House Automated Transfer System (CHATS) for same-day transfers to local foreign currency accounts. Supported currencies include Hong Kong Dollar (HKD), Chinese Yuan (CNY), US Dollar (USD), and Euro (EUR).

2. Cross-border foreign currency remittance: Opt for wire transfer services, where both local and overseas banks use the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system for overseas foreign currency remittances. Numerous currencies are supported for transfers to multiple countries or regions worldwide.

Foreign currency remittance platforms: In recent years, there have been specialised institutions in the market offering foreign currency remittance services, such as Airwallex, Wise, and OFX. These platforms target business account owners and provide cross-border foreign currency remittance with competitive fees, favourable exchange rates, and expedited transfers.

Payment service and financial service providers: Services like PayPal and Alipay also offer international wire transfer services. These service providers typically require the recipient's bank information and identity verification.

Money changers: Some money changers in Hong Kong offer overseas remittance services in various foreign currencies, advertising "same-day crediting" or "express remittance." It is important to note that the reputations of money changers may vary.

Why are foreign exchange (FX) rates different every day? Understanding the underlying principles of currency exchange

FX rates fluctuate daily. The exchange rate refers to the conversion rate between a country's currency and the currencies of other countries, reflecting the value of a currency relative to another. Exchange rates can either fluctuate or be fixed depending on the currency system and policies of each country. These are influenced by factors such as economic conditions, government policies, geopolitical factors, and more.

When you exchange currencies, banks or institutions buy the currencies from you at a "buying rate" and sell their own currency at a "selling rate." The FX price is determined by the rates between the two currencies.

The purpose of a foreign currency account – currency exchange and fixed deposits

The main purpose of a foreign currency account is for currency exchange and fixed deposits. You can use the account to convert funds into the local currency for remittances, travel, or immigration. Also, when the interest rate for a particular foreign currency is higher, you may also open a foreign currency fixed deposit account to earn interest with the foreign currency interest rate offered by the bank.

Hong Kong local banks vs. international remittance platforms

You can open a foreign currency account at both Hong Kong local banks and international remittance platforms. As mentioned earlier, one of the drawbacks of a foreign currency account is the need to spend a considerable amount of time observing how international affairs affect exchange rates. However, you can still perform currency exchanges online at any time if you can successfully capture the desired exchange rate.

On the other hand, due to the fluctuation of exchange rates, local banks may offer high interest rates to attract account opening when a country enters a rate-rise cycle.

Do I need a foreign currency account and what are the options?

Foreign currency accounts have a wide range of uses depending on individual needs, such as exchanging multiple currencies for travel or immigration, utilising it for investment purposes like fixed deposits accounts for foreign currency with higher interest rate, and for international transactions or foreign currency remittances.

Foreign currency accounts are generally categorised as foreign currency savings accounts and foreign currency fixed deposit accounts, with currencies including US dollar (USD), Chinese yuan (CNY), Australian dollar (AUD), Canadian dollar (CAD), Euro (EUR), etc. available for selection.

The procedure and documents required for opening a foreign currency account

To open a foreign currency account, you will need your identification documents and address proof. You can open the account by visiting a bank branch, with a mobile app, or through the bank's e-banking platform.

Are there any remittance fees for foreign currency accounts?

Yes, both local and cross-border transfers usually incur various types of remittance fees imposed by major banks. For example, local banks may charge a processing fee based on the market exchange rate on the day of the transaction. Some banks may also charge fees for querying the remittance status, cancelling a remittance, or adding remarks to the remittance instructions. These fees can range from approximately HK$100 to $200.

Airwallex – all-in-one financial platform for international transfers

You can easily complete the account opening process for local and foreign currency business accounts on the Airwallex website in just a minute. There are no account opening fees, monthly fees, minimum balance requirements, or minimum transaction requirements. Payments can be received directly in the currency used by your customers without any exchange processing fees. You can use Airwallex Business Account to exchange for foreign currencies and make transfers with the favourable FX rates as fast as one business day.  

Frequently asked questions

Can Airwallex’s Business Accounts make transfers worldwide?

Yes. With Airwallex’s foreign currency and multi-currency account, you can transfer over 60 currencies to more than 150 countries and regions. It's like having local accounts around the globe, allowing you to exchange currencies at real-time competitive rates with no minimum transaction amount. Foreign currency transfers are typically processed and credited to the recipient's account within one business day.

Can I top up an Airwallex Business Account with a credit card?

No, you cannot top up an Airwallex Business Account with credit cards.