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Hong Kong TCSP Companies: Essential Responsibilities and Obligations You Must Know

Why do Company Secretary need to conduct CDD? Can it be refused?

With the rise of flexible working arrangements, virtual office services have increasingly become a convenient solution for entrepreneurs. These services provide clients with a business address, call answering, and mail handling services, allowing businesses to avoid the high costs of renting a physical office. However, the growing popularity of virtual offices has made them a potential target for illicit activities such as money laundering. To prevent such criminal activities, the Hong Kong government requires virtual office services to comply with Customer Due Diligence (CDD) measures in accordance with the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO). This article will explore why virtual office services are required to conduct CDD, the documents needed for submission, and how personal data is protected.

1. Why is CDD Required for Virtual Offices?

Compliance with Hong Kong Legal Requirements

Virtual offices, as a business registration address, may be exploited by criminals to conceal illegal activities, such as money laundering, drug trafficking, or fraud. To strengthen the regulation of virtual office services, the Hong Kong government included virtual office services under the scope of Trust or Company Service Providers (TCSP) in 2018, requiring them to comply with AMLO regulations. Under the law, CDD must be conducted before establishing a business relationship to ensure the legitimacy of the business.

Customer Due Diligence (CDD) involves collecting and verifying client identity information to determine whether illegal activities are involved. The key steps include:

• Identifying the client: Verifying the client’s basic identification documents.
• Risk assessment: Verifying the client’s basic identification documents.
• Ongoing monitoring and updates: Regularly monitoring the client’s business during the relationship to identify suspicious transactions and stay informed about the source of their funds.

For more information on company secretarial responsibilities, please refer to the article: "Why do Company Secretary need to conduct CDD? Can it be refused?"

2. Documents Required for Customer Due Diligence

Clients are required to submit the following documents for CDD:

• Customer Due Diligence form
• Copies of Hong Kong Identity Cards/Mainland Identity Cards or valid passports for all shareholders and directors
• Proof of address for shareholders and directors (issued within the last three months)

Additional Information:

Identity Verification: Clients can choose to visit our office in person or conduct a video call with a OneStart business consultant for identity verification.

3. How is Client Personal Data Protected?

When conducting CDD, clients are required to provide identity verification documents such as Hong Kong Identity Cards, which may raise concerns about personal data privacy. In addition to complying with AMLO, TCSPs must strictly adhere to the Personal Data (Privacy) Ordinance to ensure that personal data is protected during collection and processing.

OneStart Business Centre places great importance on protecting client personal data. Here are some effective protective measures:

• Identity Document Copies: When clients submit copies of their identity cards, the word "COPY" will be stamped across the entire document.
• Proof of Address: Some clients may provide bank statements as proof of address. It is recommended that clients redact the financial amounts on the statement to protect personal privacy before submission.
• Restricted Use of Data: Client information is only used for the specified purpose, and no other use will be made without the client’s authorization.

4. Conclusion

Implementing Customer Due Diligence is not only a legal requirement but also a necessary measure to protect both clients and service providers. OneStart Business Centre strictly complies with the Personal Data (Privacy) Ordinance, ensuring that client information is securely managed and that our services are safe and of high quality.

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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