Hong Kong Banks Shut Down US Accounts Rather Than Deal with FATCA

Due to its geographical proximity to the mainland, modern and (until now) friendly banking system and transparent legal regime, Hong Kong has long served as a popular gateway into China for foreign businesses, especially Americans; however, since the Foreign Account Tax Compliance Act (FATCA) came into effect in early July, many Hong Kong based banks have been refusing to open new accounts and shutting down the existing accounts of American individuals and corporations. Therefore, this has left many American businesses stranded; as the existing accounts are shut down, the long-running operations are paralyzed as well. Based on the change of the taxation policy, FATCA may prove to be the final straw.

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