Banks see a growing interest in offshore accounts as Hong Kong residents seek to move their assets overseas amid fear of political persecution.

While offshore accounts are mostly popular among top clients such as family trusts and billionaires, the act of diversification has become a trending norm among professionals and the middle class in Hong Kong since Beijing imposed a national security law on the city, giving police sweeping powers to freeze assets without a court warrant.

The law enforcement has recently frozen the bank accounts of Ted Hui, former lawmaker who announced his exile, and a church that provided humanitarian aid to pro-democracy protesters over allegations of money laundering. The compliance of global banks including HSBC triggered further concerns about asset security among the public.

According to sources, Citibank saw an increase in the number of new clients as well as applications to open offshore accounts, among which include capital flowing from HSBC. The U.S.-based bank refused to comment, while a HSBC spokesperson said the interest in international banking services remains the same.

Speaking anonymously, a bank manager said the asset is safe as long as the bank account is located in a place outside of Hong Kong’s jurisdiction. That said, many citizens do feel that American banks are more independent and secure, he added.

Despite worries about the extraterritorial reach of the national security law, Counsel Albert Luk said it is difficult to execute in practice, meaning offshore assets are largely beyond the reach of local authorities.

Denise Cheung, a consultant at TongHai Financial, said an offshore bank account acts as a backup solution, giving clients an extra option and is consistent with the risk management strategy of diversification. However, she reminded people not to blindly follow the trend, as it is important to evaluate the amount of capital they own and be well aware of the operation costs, including local tax and insurance, before making a move.

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