1 – PayPal for Hong Kong LLC – What are the requirements to open a PayPal bank account for a Hong Kong company?
Similar to opening a bank account in Hong Kong like Airwallex or Aspire, you will go through two KYC processes.
- Personal KYC Process: PayPal checks the information of the founder and shareholder of the company
- Business KYC Process: PayPal checks the legitimacy of the business and the business nature.
Important:
Unlike Airwallex whose Hong Kong office does not communicate with the one in other countries, PayPal has a very centralized database that functions worldwide.
This means if you ever had a business PayPal account under a company in a given country under your personal name, PayPal in Hong Kong will know about this.
This can be an advantage and disadvantage at the same time.
Advantage:
If you have a very clean track record in PayPal in a different country, it will require less questions and it will lead to a faster opening of your account.
Disadvantage:
On the other hand, if your PayPal business account has been closed or blocked in a different country, then the probability that you can open one in Hong Kong is very low.
At this time, it would be best to probably first fix the issue with account closure from the former country.
In case you are unsure and we should investigate for you whether a PayPal account in Hong Kong can be opened, book a call with us and we will talk to our network here in Hong Kong about your case.
PayPal Hong Kong LLC: Personal KYC
PayPal will require you to send them:
- a scan of your Passport
- a scan of your residency
In case you already have a business account with them for another company of yours, they may skip this stage.
PayPal Hong Kong LLC: Business KYC
This one will be obligatory regardless of whether it is your second PayPal business account or not.
You need to send in your company documents that you have received upoin registration for your Hong Kong business. This includes:
- Certificate of Incorporation
- Business Registration Certificate
- Company Constitution / Articles of Association
- Proof of business nature
The proof of business nature depends again on whether it is your very first PayPal account or your second. For the latter, they may just skip it.
In case this is your first business PayPal account and you describe your business nature, take these aspects into account:
Tip 1: Say as much as needed, say as little as possible.
Bad example: SEO-Marketing for coaches with 7-figure revenue
Good example: Consultant
Keep in mind that most PayPal employees do not understand your business model and too many details is rather confusing than helpful, especially information that is not needed (e.g. target audience).
On the other hand, a very general word such as “consultancy” already does the trick because PayPal knows
- you are selling B2B
- you are selling an individual package (probably higher priced) and not automated such an online course
Tip 2: Have a website.
Some of our clients who are onboarded ask us whether they need to create a website for their business before applying.
My answer: It depends.
If you want to leave nothing to chance and increase maximum probability, then please create a website for your service with case studies of your customers.
Otherwise, if PayPal is just a second option and you can also live without it, then you may also try it without a website.
2 – PayPal for Hong Kong LLC: What should I do before I apply at PayPal?
Before you start the application, we recommend the following steps:
Step 1: Any past problems with PayPal
Resolve any past problems with PayPal business if you have used them with a different business.
As explained above, PayPal remembers as they have a worldwide database.
We had cases when new customers wanted to open a Hong Kong company with a PayPal account, but through our connection we could find out prior to opening a Hong Kong company that PayPal Hong Kong would not open an account for them due to their past blocked PayPal business account in other countries.
Do you also prevent wasting money on incorporating a Hong Kong company and finding out that PayPal won’t open an account for you? Then feel free to book a call with us and we find out the rest for you.
Step 2: Open a Hong Kong company
Open a Hong Kong company through a trusted partner like a legal or CPA firm who can assist not only with the opening, but also with the maintenance.
Make sure you receive all company documents after successful registration:
- Business Registration Certificate
- Certificate of Incorporation
- Articles of Association
- Incorporation form (NNC 1)
We as HK CPAs have helped around 1000 foreign-owned company incorporation and with annual tax filings and audits. Book a call with us to see how this can look for you.
Further reading:
Read how opening a Hong Kong company works out from start to finish..
Step 3: Professionalize your business
Before applying at bank accounts and payment gateways, it is best to professionalize your business with the following aspects:
- website for your business (as if your potential customers would look at it)
- social media profile (LinkedIn, Instagram etc.)
- professional email address ([email protected]) – it should be the same domain as above website domain
Many people will tell you that this is not necessary.
And yes, they are right.
But we love to play things safe because we go by the philosophy “rather safe than sorry”.
That is why our customers trust us because they know they are in good hands.
Book a call with us if you also want to be in good hands – we worry for your business compliance in Hong Kong so you don’t have to.
Step 4: Open a Hong Kong business bank account
Before opening a PayPal account, you need a business bank account to pay the money from PayPal to your business account.
Whether it is a fintech company such as Wise or Airwallex or a traditional bank such as HSBC does not matter.
But: Let your partner who has helped you to open a bank account also help you with the bank account opening and refer you to their bank network.
Many foreign customers have come to us after their successful registration because they were not able to open a bank account and their partners did not fully help them with them.
Further reading:
Read more about how to open a business bank account in Hong Kong as a foreigner?
3 – PayPal Hong Kong versus Airwallex Payment gateway
Many of our customers also choose Airwallex instead of PayPal as a gateway.
PayPal is simply a payment method. Of course, you can use them and integrate with them directly.
But you can also use a third-party payment system such as Airwallex that offers to connect for you to PayPal, Credit Cards, AliPay and many more.
Here are a few reasons why some of our customers choose this:
Reason 1 – Less cost of development.
Instead of connecting to different payment methods such as PayPal, Stripe for Credit Cards and AliPay, they just use Airwallex and integrate through the Airwallex system to all the others.
The benefits are especially the costs for online-stores.
If you have to integrate each of the payment providers, it takes more development time for reading their documentation (PayPal API documentation, Stripe API documentation, AliPay API documentation etc.).
When connecting with Airwallex, they just simply have to read Airwallex API documentation.
Often a service such as Airwallex is called a payment aggregator (including many payment providers) and PayPal/AliPay are considered payment providers.
The differences between them are being highlighted in this article.
At the end it comes down to you what your preferences are.
Also make sure not only looking at development cost, but also for the fee using the payment providers through Airwallex or PayPal and AliPay’s fees.
Reason 2 – Faster process after bank opening
When you already have your bank account with Airwallex, the application for the payment gateway is straightforward and faster.
Of course, you would still need to apply at the payment provider such as PayPal, AliPay for an account and go through their KYC process and then you can connect your Airwallex to that account.
Reason 3 – One central dashboard
If all of your payment providers are handled through Airwallex, you have a nice dashboard overview at Airwallex to see the incoming money from different channels.
Without Airwallex, you would have to go into each payment provider and either get that data manually or automatically export it into a Google sheet.
Reason 4 – Currency exchange
Airwallex lets you keep the money in the currency you have received.
This means if you receive USD, you can keep USD in Airwallex and pay yourself out in USD, same for Australian Dollar or Euros.
PayPal on the other hand only allows payout in Hong Kong dollars.
This means if you receive money in Euros, then prior to payout this money is converted to Hong Kong dollars and you may use money on currency exchange costs.
If are still unsure about what is best for you and like to brainstorm with us, book a call with us. We have undergone 300 cases with e-commerce owners and know when it makes sense to choose which.
FAQ – What other customers have asked.
1 – How to open a PayPal business account for a Hong Kong LLC?
Opening a PayPal business account in Hong Kong is similar to anywhere else in the world.
PayPal’s business KYC and opening process is very systemized globally.
It goes through this process:
- Do you have any red flags from the past with any other PayPal business accounts with other companies?
- Do you have all required personal documents (proof of address, passport scan)?
- Do you have all required business documents (business certificate, incorporation certificate, NCC, website for business, professional email address)?
- Can you show a record of transactions if this is an already-running business?
2 – What is the difference between using PayPal and Airwallex?
First of all, PayPal and Airwallex are very different in their service.
PayPal is a payment method, Airwallex a payment aggregator.
A payment method is a way to pay such as credit card, debit card, PayPal, Google Pay etc.
A payment aggregator includes many payment methods (such credit cards, PayPal etc.) so that you do not need to connect to each payment method individually, but have a centralized system to connect through all of them.
It is a bit like using an app to order Kebap from your favorite kebap store, an app for ordering pizza from your favorite pizza store.
Or you can use one app such as Uber Eats (Eating aggregator) and scroll through all possibilities yourself – this helps you to only need one app for simplicity but still having the choice of many restaurants to pick from.
The downside:
The costs. Of course Uber Eats costs more and they charge the restaurants.
In the case with Airwallex, they charge you as a customer an additional fee.
3 – What currencies can I receive with PayPal for my Hong Kong LLC?
You can receive almost any currency. This means on your website you can integrate any currency for your customers.
But when you pay yourself out as a business or founder, PayPal Hong Kong only allows the payout to be in Hong Kong dollars.
4 – Are there any differences between PayPal for a US LLC and PayPal for a Hong Kong LLC?
The only difference we know of would be above payout restriction.
In the US you can obviously pay out the amount in USD, in Hong Kong only in Hong Kong dollars.
If your customers are in Europe and they pay in Euro, then there would not be a big difference as in both cases it would be changed to the main currency of PayPal in that country.
