Make Use of Export Credit Risk

What can you do if your buyer failed to pay you money after delivery of goods? Have you heard of Export Credit Insurance which provides protection against the risks of non-payment with lower costs?

When your company is engaged in export trading on credit payment terms namely Documents against Payment (DP), Documents against Acceptance (DA) and Open Account (OA), it is exposed to "non-payment" risks. Unforeseeable political, social and commercial factors can also prevent payments from your buyers to your company.

Being insured by export credit insurance, your company is protected against bad debts risks, enabling you to secure by extending more favorable terms to overseas buyers. Your capability in acquiring trade finance is also enhanced.

How to buy Export Credit Insurance?

This is normally offered by sizable banks or insurance company, or alternatively, you can buy this insurance at The Hong Kong Export Credit Insurance Corporation (‘HKECIC”), which is a ‘public body’ and was established in 1966.

HKECIC provides a wide range of insurance facilities to Hong Kong exporters of both goods and services who trade with overseas buyers on credit terms, usually of up to 180 days. The facilities cover two main types of non-payment risks for goods exported and services rendered arising from buyer risks and country risks. In addition, HKECIC offers tailor-made policies that cover exports of services, each designed to meet the specific requirements of different service sectors.

Apart from insurance cover, HKECIC provide risk assessment and monitoring services to exporters, offering advice on the extent of credit which it is prudent of them to offer their buyers. HKECIC draw on a computerised worldwide database of buyers whose credit-worthiness is regularly monitored by our underwriters. The credit information is derived from an international network made up of credit information agencies, banks and other credit insurers.

Insurance policies issued by the HKECIC are accepted by the banking community as useful collateral for discounting export bills. The protection accorded to a policyholder may be extended to the policyholder's bank by a Letter of Authority, which enables claims to be paid directly to the bank and can be instrumental in helping policyholders obtain the banking facilities they need.

NEED Assistance?

Please kindly contact us at info@rbcs.com.hk

Report on Hong Kong's Business Environment

The Hong Kong Government released the Report on Hong Kong's Business Environment which states that the city is a place with unique advantages and unlimited opportunities.

The report has three chapters:

1/ first of which elaborates on how black-clad violence and US strategy of suppressing China brought enormous negative impact on Hong Kong's economy and business environment.

2/ The second one outlines how the formulation and implementation of the National Security Law and the principle of "patriots administering Hong Kong" have effectively restored social stability and safeguarded the city's business environment.

3/ The third reveals that new Hong Kong back on track has outstanding advantages in its business environment with unlimited room for future development.

The report noted that since the implementation of the National Security Law, Hong Kong's financial market has remained stable. By the end of June this year, total deposits in the banking system amounted to over $15 trillion, up by almost 8% over last June. Hong Kong's foreign exchange reserves also increased by 10.5% to $3.8 trillion.

In the year following the enactment of the National Security Law, funds raised through initial public offerings in Hong Kong exceeded $500 billion, an increase of more than 50% compared to the 12 months before the enactment. As at the end of 2020, the assets under management of the city's asset and wealth management business grew by 21% year-on-year to nearly $35 trillion, about one-third of which was contributed by net fund inflows.

The report also quoted the latest international rankings of Hong Kong concerning economic freedom and competitiveness which have all along been well recognised by international institutions. Additionally, Hong Kong has been at the forefront of international rankings related to the rule of law and judicial independence since its return to the motherland.

With the unique positioning provided by the China National 14th Five-Year Plan and the unlimited opportunities brought about by the Guangdong-Hong Kong-Macao Greater Bay Area development, Hong Kong will be given new impetus for economic development.

What is "E-Accounts"?

Many clients have asked WHAT and WHY E-Accounts (offered by FinTech company) are so Hot nowadays? I will compare and contrast the differences and similarities. Let's GO!

Comparison

One of the few distinctions is the fact that E-Accounts are almost exclusively online, even though few happen to have physical open-door premises. Thanks to such business practice, the Renting costs can be saved for those FinTech companies and consequently offer excellent banking conditions at lower fees.

In terms of Compliance matters, both FinTech companies, as well as Banks, are regulated by the governments and so are obliged to perform Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures.

And usually, banks offer a wide variety of services such as investment management, merchant banking, wealth planning, and structuring, loans, etc. In other words, clients with FinTech companies are NOT going to be sold with any Insurance or Wealth Management proposal. DO NOT GET ME WRONG! I suggest to have Insurance and Wealth Management in your life.

Use Reputable FinTech

You can run across a million different FinTech just browsing the web but the services can vary wildly. The crucial thing is finding a reputable FinTech that you can trust your money with and which you can depend on in a time of an emergency.

RBCS has worked with Airwallex and Neat which you can trust with.

Learn more at: https://www.rbcs.com.hk/e-account