EMI/bank for HK company, UBO in high risk countries

[gregorio]

Hi there!
Mostly on the forum in read-only mode, but now asking for advice.
Following case information: limited company, Hong Kong jurisdiction, UBO/director has Russian citizenship.
An account was opened with Jusan Bank. After several invoice payments, they informed us that the account would most likely be closed due to high risk.
Aspire - account closed one year after failing annual KYC.
Wallex - KYC underway, chances of account closure quite high.
I will not go into the reasons as they are clear to everyone. To be clear - I don't support the war and everything that goes with it.
The company operates in the wholesale market, with customers from the United States.
Money transfers are made only from the Russian Federation. There are no incoming payments. Now I am considering Jeton, Paxum....
I apologise in advance. My English may not be the best.

 

[1van]

AFAIK you have no chance getting EMI/Bank account opened for Ru citizen nowadays, unless he has EU residence permit.

You may try to look in to UAE or something similar, that doesn't give such pressure on Russia.

Good luck and please keep us up to date on your issue.

 

[jafo]

gregorio said:
Hi there!
Mostly on the forum in read-only mode, but now asking for advice.
Following case information: limited company, Hong Kong jurisdiction, UBO/director has Russian citizenship.
An account was opened with Jusan Bank. After several invoice payments, they informed us that the account would most likely be closed due to high risk.
Aspire - account closed one year after failing annual KYC.
Wallex - KYC underway, chances of account closure quite high.
I will not go into the reasons as they are clear to everyone. To be clear - I don't support the war and everything that goes with it.
The company operates in the wholesale market, with customers from the United States.
Money transfers are made only from the Russian Federation. There are no incoming payments. Now I am considering Jeton, Paxum....
I apologise in advance. My English may not be the best.
Click to expand...

Have you considered getting paid with USDt instead?

My reason for USDt/USDC: Despite, having strong passports. Great residency. I still have issues with (most) banks (if I go over 10K/month) because I suspect, I don't employ anyone and banks just don't understand the simple concept of buying products low at source i.e. China and selling them high in non-manufacturing countries, so I use USDt and it works like clockwork. I can offramp to USD, EUR, etc., but mostly, due to what I have learned here at OCT, I swap to BTC any excess USDt.

PS. Yeah, the Russian citizenship is a big problem. I have an acquaintance who sells and buys from Russia but only uses stablecoins i.e. USDt, USDC, etc.

 

[Forester]

gregorio said:
Hi there!
Mostly on the forum in read-only mode, but now asking for advice.
Following case information: limited company, Hong Kong jurisdiction, UBO/director has Russian citizenship.
An account was opened with Jusan Bank. After several invoice payments, they informed us that the account would most likely be closed due to high risk.
Aspire - account closed one year after failing annual KYC.
Wallex - KYC underway, chances of account closure quite high.
I will not go into the reasons as they are clear to everyone. To be clear - I don't support the war and everything that goes with it.
The company operates in the wholesale market, with customers from the United States.
Money transfers are made only from the Russian Federation. There are no incoming payments. Now I am considering Jeton, Paxum....
I apologise in advance. My English may not be the best.
Click to expand...

Welcome here!

gregorio said:
The company operates in the wholesale market, with customers from the United States.
Click to expand...

Could you elaborate a little bit more what is your business? What are you selling?

gregorio said:
Money transfers are made only from the Russian Federation. There are no incoming payments.
Click to expand...

I must admit I do not understand well: It is a HK company. You claim that “there are no incoming payments” ”“ but in the same time, you say that “money transfers are made from the Russian Federation”. Please, could you explain the financial flows once more?

gregorio said:
I apologise in advance. My English may not be the best.
Click to expand...

🙂 OK.

Just generally:
HK, or globally East Asia, is not an optimal location for establishing a company for making business with Russia.
Usually, CIS countries like Kazakhstan, Armenia, Georgia; or Turkey; or UAE are used; LatAm countries can be used, too.
Jusan Bank is in Kazakhstan, IIRC ”“ do you know why they evaluated your business as a high-risk?

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I am just a simple countryman. Anything I say is only a personal opinion, not a certified advice 🙂

If you think it makes sense, you can like it; if opposite, please, tell me, why I am wrong...

 

[gregorio]

jafo said:
Have you considered getting paid with USDt instead?

My reason for USDt/USDC: Despite, having strong passports. Great residency. I still have issues with (most) banks (if I go over 10K/month) because I suspect, I don't employ anyone and banks just don't understand the simple concept of buying products low at source i.e. China and selling them high in non-manufacturing countries, so I use USDt and it works like clockwork. I can offramp to USD, EUR, etc., but mostly, due to what I have learned here at OCT, I swap to BTC any excess USDt.

PS. Yeah, the Russian citizenship is a big problem. I have an acquaintance who sells and buys from Russia but only uses stablecoins i.e. USDt, USDC, etc.
Click to expand...

Thanks for your advice!
I've been looking at crypto for a long time, over the last year many partners have redirected their cash flow in that direction.

Forester said:
Welcome here!

Could you elaborate a little bit more what is your business? What are you selling?

I must admit I do not understand well: It is a HK company. You claim that “there are no incoming payments” ”“ but in the same time, you say that “money transfers are made from the Russian Federation”. Please, could you explain the financial flows once more?

🙂 OK.

Just generally:
HK, or globally East Asia, is not an optimal location for establishing a company for making business with Russia.
Usually, CIS countries like Kazakhstan, Armenia, Georgia; or Turkey; or UAE are used; LatAm countries can be used, too.
Jusan Bank is in Kazakhstan, IIRC ”“ do you know why they evaluated your business as a high-risk?
Click to expand...

Okay, I'll try to explain my case in more detail.

I sell spare parts for motors. Most of my supplies are for my own production and for my partners' factories. Average monthly sales 15000-20000 US dollars (cost of purchase).

The reason for the choice of Hong Kong was the simplicity of the opening of the company, the cost of taxes. The CIS countries for the opening was not particularly taken into account for a number of reasons, including the customs regulations. In Kazakhstan, goods can hang on customs for a long time. Almost all CIS countries ideally need to be assisted at one stage or another, otherwise problems can arise. Mentalities, if you know what I mean. In Hong Kong they are more simple.

The Jusan Bank (often advertised in the forum) opened an account for 2000 USD and promised a smooth flow of money. But as soon as they found out that the purchased goods do not enter Kazakhstan (and therefore do not pass customs there), they immediately sent a warning about suspicion of circumvention of sanctions and possible closure of the account.

Maybe I made a mistake somewhere in the creation of the system. Now I'm looking for an ideal EMI to make payments, or I can really go into crypto.

Last edited: Nov 18, 2023

 

[jafo]

gregorio said:
But as soon as they found out that the purchased goods do not enter Kazakhstan (and therefore do not pass customs there), they immediately sent a warning about suspicion of circumvention of sanctions and possible closure of the account.
Click to expand...

How did they find this out? 🙄

 

[ShillGates]

this is a good freezone tax free setup btw and import and export is what most businesses do in the trade of motorparts. UAE is the biggest secondhand car part trade in the world? (or something like that - judging by the fact my previous 2 stolen range rovers ended up there in parts ) that coupled with the fact uae is happy with usd AND russians...... youd be crazy to not to set this up with real banks and real substance. Only need to visit there 2weeks a year

 

[MaxFS]

Ok your nationality is Russian, but what is your country of residence? I mean, maybe you had problems because your country of residence is Russia?
P.S
Actually, i have a similar problem, though for me it's not that complicated, i work with adsense mostly.

 

[FDS ADS]

gregorio said:
Hi there!
Mostly on the forum in read-only mode, but now asking for advice.
Following case information: limited company, Hong Kong jurisdiction, UBO/director has Russian citizenship.
An account was opened with Jusan Bank. After several invoice payments, they informed us that the account would most likely be closed due to high risk.
Aspire - account closed one year after failing annual KYC.
Wallex - KYC underway, chances of account closure quite high.
I will not go into the reasons as they are clear to everyone. To be clear - I don't support the war and everything that goes with it.
The company operates in the wholesale market, with customers from the United States.
Money transfers are made only from the Russian Federation. There are no incoming payments. Now I am considering Jeton, Paxum....
I apologise in advance. My English may not be the best.
Click to expand...

There is an EMI option in Kazakhstan and some other opportunities, my clients have worked with the UK, business consulting companies and they have arranged them.

 

[Forester]

gregorio said:
I've been looking at crypto for a long time, over the last year many partners have redirected their cash flow in that direction.
Click to expand...

Yes, crypto is a viable solution, if (and only if)
”“ your customers are willing to pay you in crypto;
”“ you are able to convert it to fiat easily or you do not need much fiat currency.

gregorio said:
I sell spare parts for motors.
Click to expand...

OK. Clear.

gregorio said:
Most of my supplies are for my own production and for my partners' factories.
Click to expand...

Well, I still do not understand the situation how ”žMoney transfers are made only from the Russian Federation. There are no incoming payments.” ”“ but let's put it aside; it is probably not so important now.

gregorio said:
Average monthly sales 15000-20000 US dollars (cost of purchase).
Click to expand...

So, with such a turnover you are probably well able “to fly under radar“ but not much able to bear some remarkable additional costs, I guess...

gregorio said:
The reason for the choice of Hong Kong was the simplicity of the opening of the company, the cost of taxes.
Click to expand...

I understand ”“ but see below...

gregorio said:
The CIS countries for the opening was not particularly taken into account for a number of reasons, including the customs regulations. In Kazakhstan, goods can hang on customs for a long time. Almost all CIS countries ideally need to be assisted at one stage or another, otherwise problems can arise. Mentalities, if you know what I mean.
Click to expand...

Yes, I think I know what you are speaking about.

gregorio said:
In Hong Kong they are more simple.
Click to expand...

True. Nevertheless, I think that you have already found that this in not sufficient for your business case.

gregorio said:
The Jusan Bank (often advertised in the forum) opened an account for 2000 USD and promised a smooth flow of money. But as soon as they found out that the purchased goods do not enter Kazakhstan (and therefore do not pass customs there), they immediately sent a warning about suspicion of circumvention of sanctions and possible closure of the account.
Click to expand...

Fully understandable for me, unfortunately.
(Although just less than 50 from ~200 countries of the world adopted some sanctions against Russia, Kazakhstan is under watchful eyes and remarkable pressure; and Jusan Bank definitely does not want to lose its USD correspondent bank.)

gregorio said:
Maybe I made a mistake somewhere in the creation of the system.
Click to expand...

Everyone makes mistakes 🙂

IMO, the jurisdiction for an intermediate company was not selected well.

gregorio said:
Now I'm looking for an ideal EMI to make payments,
Click to expand...

A HK company with a Russian UBO doing your business has chances to find suitable (and reliable) banking close to zero, I am afraid (sorry).

gregorio said:
or I can really go into crypto.
Click to expand...

Yes, it's pretty possible ”“ under circumstances quoted above.

In my opinion, another possibility you have is to move your business to a better jurisdiction. Where?
CIS countries are omitted.
UAE (that is frequently used) is too expensive for your business case, I am afraid; fixed costs are too high.
You can consider Turkey, or some LatAm country - I am able to help you with the latter, if you like.

jafo said:
How did they find this out? 🙄
Click to expand...

Quite easily, I am afraid. I guess they simply were asking for customs declaration related to particular business case, it's quite frequent.

ShillGates said:
UAE is the biggest secondhand car part trade in the world? (or something like that - judging by the fact my previous 2 stolen range rovers ended up there in parts ) that coupled with the fact uae is happy with usd AND russians...... youd be crazy to not to set this up with real banks and real substance. Only need to visit there 2weeks a year
Click to expand...

I agree; but do not overlook that @gregorio has only 15-20k monthly turnover...

@GAGIKUR said:
There is an EMI option in Kazakhstan and some other opportunities,

Do you have in mind Collect&Pay?

Last edited: Nov 18, 2023
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I am just a simple countryman. Anything I say is only a personal opinion, not a certified advice 🙂

If you think it makes sense, you can like it; if opposite, please, tell me, why I am wrong...

 

[ShillGates]

well 10-20k turnover for a unusable corp in hk and no banking. Guess if proper bank then turnover can go up? but with a utility bill in sharjah or something and an ifza corp, that gives costs of 3-5k a year fixed + some flights here and there-. @200-250k turnover a year? or about 2% of turnover cost

 

[FDS ADS]

Forester said:
Yes, crypto is a viable solution, if (and only if)
”“ your customers are willing to pay you in crypto;
”“ you are able to convert it to fiat easily or you do not need much fiat currency.

OK. Clear.

Well, I still do not understand the situation how ”žMoney transfers are made only from the Russian Federation. There are no incoming payments.” ”“ but let's put it aside; it is probably not so important now.

So, with such a turnover you are probably well able “to fly under radar“ but not much able to bear some remarkable additional costs, I guess...

I understand ”“ but see below...

Yes, I think I know what you are speaking about.

True. Nevertheless, I think that you have already found that this in not sufficient for your business case.

Fully understandable for me, unfortunately.
(Although just less than 50 from ~200 countries of the world adopted some sanctions against Russia, Kazakhstan is under watchful eyes and remarkable pressure; and Jusan Bank definitely does not want to lose its USD correspondent bank.)

Everyone makes mistakes 🙂

IMO, the jurisdiction for an intermediate company was not selected well.

A HK company with a Russian UBO doing your business has chances to find suitable (and reliable) banking close to zero, I am afraid (sorry).

Yes, it's pretty possible ”“ under circumstances quoted above.

In my opinion, another possibility you have is to move your business to a better jurisdiction. Where?
CIS countries are omitted.
UAE (that is frequently used) is too expensive for your business case, I am afraid; fixed costs are too high.
You can consider Turkey, or some LatAm country - I am able to help you with the latter, if you like.

Quite easily, I am afraid. I guess they simply were asking for customs declaration related to particular business case, it's quite frequent.

I agree; but do not overlook that @gregorio has only 15-20k monthly turnover...

@GAGIKUR said:
There is an EMI option in Kazakhstan and some other opportunities,

Do you have in mind Collect&Pay?
Click to expand...

Yes Collect and Pay.

 

[Forester]

GAGIKUR said:
Yes Collect and Pay.
Click to expand...

And do you think that they will be more lenient than Jusan Bank? (I have no clue, honestly...)

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I am just a simple countryman. Anything I say is only a personal opinion, not a certified advice 🙂

If you think it makes sense, you can like it; if opposite, please, tell me, why I am wrong...

 

[FDS ADS]

Forester said:
And do you think that they will be more lenient than Jusan Bank? (I have no clue, honestly...)
Click to expand...

I think yes.

 

[Forester]

GAGIKUR said:
I think yes.
Click to expand...

Well, may be. So in such a case it can be another option for @gregorio...

ShillGates said:
but with a utility bill in sharjah or something and an ifza corp, that gives costs of 3-5k a year fixed + some flights here and there-. @200-250k turnover a year? or about 2% of turnover cost
Click to expand...

And do you think that with a utility bill in Sharjah or something and an IFZA corp (that is really quite cheap) you can get proper banking for @gregorio's use-case? Honestly, I doubt ”“ but having said that I admit that I do not consider myself being a really qualified expert re: UAE...

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I am just a simple countryman. Anything I say is only a personal opinion, not a certified advice 🙂

If you think it makes sense, you can like it; if opposite, please, tell me, why I am wrong...

 

[gregorio]

GAGIKUR said:
Yes Collect and Pay.
Click to expand...

I started the thread after I had already started KYC. However, it is indeed a solution.
Due to agreements, I will not comment further.

Really, thanks to everyone on this forum for their help!
I learned a lot of useful things from reading the other threads.
I have just returned from a long business trip where I had big problems with my connection, so I apologize for not being able to reply here in time.
But the problem is solved, maybe temporarily, but now is such a time.
A lot of success in business and a lot of happiness for all of you.

Last edited: Nov 27, 2023

 

[Forester]

gregorio said:
I started the thread after I had already started KYC. However, it is indeed a solution.
Click to expand...

You mean Collect&Pay, correct?

Congratulations, anyway 🙂

gregorio said:
Due to agreements, I will not comment further.
Click to expand...

Fully understandable...

gregorio said:
Really, thanks to everyone on this forum for their help!
I learned a lot of useful things from reading the other threads.
I have just returned from a long business trip where I had big problems with my connection, so I apologize for not being able to reply here in time.
But the problem is solved, maybe temporarily, but now is such a time.
A lot of success in business and a lot of happiness for all of you.
Click to expand...

You are welcome...

Toggle signature
--------------------------------------------------------------------------------------------------------------------------------------

I am just a simple countryman. Anything I say is only a personal opinion, not a certified advice 🙂

If you think it makes sense, you can like it; if opposite, please, tell me, why I am wrong...

 

[Marios]

gregorio said:
Hi there!
Mostly on the forum in read-only mode, but now asking for advice.
Following case information: limited company, Hong Kong jurisdiction, UBO/director has Russian citizenship.
An account was opened with Jusan Bank. After several invoice payments, they informed us that the account would most likely be closed due to high risk.
Aspire - account closed one year after failing annual KYC.
Wallex - KYC underway, chances of account closure quite high.
I will not go into the reasons as they are clear to everyone. To be clear - I don't support the war and everything that goes with it.
The company operates in the wholesale market, with customers from the United States.
Money transfers are made only from the Russian Federation. There are no incoming payments. Now I am considering Jeton, Paxum....
I apologise in advance. My English may not be the best.
Click to expand...

Hi,
What type of goods are you trading? Does your Director/UBO reside outside of Russia?

 

[koohl]

gregorio said:
Hi there!
Mostly on the forum in read-only mode, but now asking for advice.
Following case information: limited company, Hong Kong jurisdiction, UBO/director has Russian citizenship.
An account was opened with Jusan Bank. After several invoice payments, they informed us that the account would most likely be closed due to high risk.
Aspire - account closed one year after failing annual KYC.
Wallex - KYC underway, chances of account closure quite high.
I will not go into the reasons as they are clear to everyone. To be clear - I don't support the war and everything that goes with it.
The company operates in the wholesale market, with customers from the United States.
Money transfers are made only from the Russian Federation. There are no incoming payments. Now I am considering Jeton, Paxum....
I apologise in advance. My English may not be the best.
Click to expand...

Out of interest, where did you land with your questions and the answers you got?

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