A multi-currency account is typically a bank account at a bank or financial tech firm, allowing you to spend, receive, and hold multiple currencies. 

It can function like an international checking account featuring multiple sub accounts, each with a different currency. A multi-currency account also allows you to manage payments and transactions using a foreign currency instead of opening a new bank account overseas. 

More importantly, a multi-currency account lets you spend as a local in foreign countries. Additionally, it will enable you to quickly transfer and receive money. 

A common misconception is that a multi-currency account is only limited to the use of businesses and high-net-worth individuals through foreign private banking solutions provided by international banks. The truth is anybody can open a multi-currency account provided the initial deposit, minimum amount deposit, and bank fees are met. 

In Hong Kong, multi-currency accounts are offered by majority of its banks, usually featuring the following major currencies:

• Hong Kong Dollar
• US Dollar
• Euro
• British Sterling Pound
• Singapore Dollar
• Japanese Yen 
• Australian Dollar
• Chinese Yuan 

Why Should a Company Open a Multi-Currency Account?

A multi-currency account is beneficial for many types of companies as it reduces costs, saves time and effort when processing business transactions, either sending or receiving payments in various currencies. 

In essence, any company that deals with cross-border transactions can greatly benefit from opening a multi-currency account. 

A multi-currency account is useful in the following circumstances:

• You deal with major international transactions, be it importing, exporting, transhipping or all. 
• You own and manage an e-commerce platform that sells goods and services in different currencies. 
• You handle employees abroad or work with freelance professionals from overseas. 
• You are an independent contractor or freelancer who regularly work with international clients. 

In summary, a multi-currency account offers an easy way for businesses to avoid currency conversions that can get costly, especially if you are involved with regular transactions in different currencies. Having a multi-currency account eliminates the uncertainty in associated costs from ever-changing foreign exchange rates. 

As a result of the ongoing COVID-19 pandemic, remote work has become a commonplace, resulting in an increase in the demand of multi-currency accounts, especially for companies with employees in different parts of the globe. 

Additionally, having a multi-currency account offers added convenience to companies as opposed to traditional wire transfer services. Bank wires usually come with expensive fees and exchange rate markups, not to mention the slow delivery rates. For instance, in order to execute an international wire transfer, account holders need to wait for a day, and in some cases, this can take weeks to get sorted. 

What are the Major Benefits of Having a Corporate Multi-Currency Account?

The majority of benefits of opening a business multi-currency account are quite obvious, while some may require fundamental knowledge of foreign exchange. 

1- Provide a single bank account number to all clients

Gone are the days when you need to painstakingly communicate different sets of account details for each currency to your clients. You can save yourself from the stress and hassle of providing these information to your clients when you have a multi-currency account that can hold different currencies from all parts of the globe. 

2- Become more efficient in accounting and reconciliation

Using a multi-currency account, your end-of-month accounting becomes more convenient and streamlined. Your accounting team will require less time reconciling as you now gain the ability of issuing invoices in a single currency and get paid in the same currency. This means:

• No more time wasted trying to match invoices with paid amounts in different currencies. 
• Less accounting changes required for exchange rate difference. 

3- Save money on foreign exchange commission 

Let’s look at your current situation. Your company has a single currency account, one which accommodates to your home currency and nothing else. 

Now, let’s say your client makes a payment in yet another currency, your bank will need to convert this currency into your native currency in order for them to deposit the funds into your account. Like all other financial institutions, your bank will charge steep fees for foreign exchange commission to convert the funds. 

If your business receives numerous payments in different currencies, your bank can rack up a pretty big sum on commissions just by processing your transactions. 

One of the major selling points of having a multi-currency account is avoiding paying foreign exchange commissions. Funds that are paid to your company in one currency will automatically be credited to your account without the need for costly conversions. 

4- Strategic currency trading 

Through a multi-currency account, you can easily move money between the different currencies you have under your company bank account. While your goal is not to become a Forex trader, this will give you the opportunity to buy and sell currencies when the exchange rate is favourable. Most banks do not assess fees on intra-account transfers. 

5- Gain familiarity with foreign exchange forward contracts to keep your clientele satisfied

Do you have overseas clients that insist to pay in their local currency? -Obviously, there is not the preferred payment of choice. You would rather have them send payment in your local currency, not theirs. But can you really blame your clients when you’re in the same predicament. You wouldn’t want to expose your business to foreign exchange risk. 

By having a business multi-currency account, neither you or your client will not be exposed to foreign exchange risks. Keeping this in mind, owning a multi-currency account is the first step in avoiding this type of risk altogether. Your clients can continually pay in their local currency, assuming theirs is supported by your bank account. 

While you may not have totally ruled out foreign exchange risks, given there are many factors that influence its movement, at the end of the day, you are holding funds in your clients’ currencies on your account. The risk is not immediate, but will only happen if you convert foreign currency into another during unfavourable foreign exchange conditions. 

To prevent foreign exchange risk, it’s crucial to consider the use of FX forward contractors. In exchange for a small fee, these contracts allow you to lock the foreign exchange rate at which you will convert your client currency in the future. Therefore, by alleviating risks, a multi-currency account will keep your clients satisfied and happy doing business with you. 

How Do You Open a Multi-Currency Account in Hong Kong?

If you’re planning a multi-currency account for your business in Hong Kong, be ready to accomplish a long list of requirements. However, if you are looking for a more streamlined process to open a multi-currency account in Hong Kong, you can reach out to us. Damalion partners with a dedicated service provider in Hong Kong that can facilitate the fast and smooth process of opening a multi-currency bank account. In fact, such an account may be opened in more than 30 countries.

• 100% online application, so you can save time from going to visit a branch or Hong Kong if you are based in another country. 
• It only takes 10 minutes at most to finish your multi-currency bank application with us!
• Highly responsive staff which means all your inquiries will be addressed within 48 hours or a few hours after your request or inquiry is submitted. 
• There are no account opening charges, except in the case of certain companies.

Opening a multi-currency corporate account is made fast and easy by our dedicated team here at Damalion. As a premier business consulting company, we also offer a comprehensive suit of solutions should you ever need assistance in setting up a company in Hong Kong or any other jurisdiction. We also have an extensive global service network made up of seasoned lawyers, accountants, strategists, and business service providers to attend to your management, bookkeeping, accounting, and tax planning needs. To learn more, reach out to a Damalion expert today. 

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.