Hong Kong Anti-Money Laundering Regulations: Required Documents and Re

Recently, an increasing number of clients have raised questions regarding Customer Due Diligence (CDD), particularly around the required documentation. This article will explain the requirements of CDD and highlight the necessary documents for different types of clients, helping them better understand and prepare the relevant materials.

1. Requirements for Customer Due Diligence (CDD)

Customer Due Diligence is a core responsibility of company secretaries. Before establishing a relationship with a client, the following steps must be completed:

Identify and verify the client's identity
Understand the source of the client's funds
Identify and take reasonable measures to verify the identity of the beneficial owners
Understand the purpose and intended nature of the business relationship
Continuously monitor the business relationship

Definition of Beneficial Owner:

According to the 2022 amendments to the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, the definition of a beneficial owner has changed from individuals holding more than 25% of the vested interest in the trust assets to requiring the identification of any beneficiary entitled to a vested interest in the trust assets.

For more information on company secretarial responsibilities, please refer to the article: Hong Kong TCSP Companies: Essential Responsibilities and Obligations You Must Know

2. Identification and Verification of Client Identity

Under Chapter 615 of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, company secretaries are required to conduct CDD for every client, certifying the identities of all beneficial owners, shareholders, company directors, and proprietors. Clients must submit the following information and documents:

Customer Due Diligence form
Full name, date of birth, and nationality
Copy of Hong Kong Identity Card/Mainland Resident Identity Card or a valid passport
Proof of address issued within the last three months

Source of Funds Documentation:

Expected source and origin of funds used in the business relationship
Initial and ongoing sources of wealth or income

According to legal requirements, company secretaries must retain all documents and records related to CDD for at least 5 years.

3. Continuous Monitoring of Customer Due Diligence

Changes in Company Information:

CDD is an ongoing process. If there are any changes in the company, such as shareholder changes or changes in the nature of the business, clients must immediately contact the company secretary and re-conduct the CDD process. The company secretary will regularly update the client's documents and information to ensure accuracy, which is not only a legal requirement but also helps maintain a good business relationship.

4. Conclusion

Strictly implementing CDD not only protects a company from legal and reputational risks but also contributes to maintaining the stability of Hong Kong's financial system. As money laundering techniques continue to evolve, it is essential to remain vigilant, stay informed of the latest legal requirements, and continually improve CDD procedures. Doing so ensures Hong Kong's standing as a safe, transparent, and trustworthy international financial center.

OneStart Business Centre is a licensed TCSP in Hong Kong . Entrepreneurs can choose from a variety of services, streamlining company registration, secretary services, business address leasing, virtual office services, and more. Please feel free to call or WhatsApp (852) 3575 6888 to our OneStart Business Consultant.

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