A growing number of mid-market firms are restructuring their treasury operations to maintain separate cash pools in Dubai, Hong Kong and London without incurring the full cost of a multi-jurisdictional legal entity in each location. This approach, sometimes called a multi-hub treasury, allows companies to hold and move cash in three of the world's most active financial corridors while keeping overheads closer to those of a single-entity operation.
The shift is driven by practical commercial pressures: supply chain diversification, client payment preferences and the need to hedge against currency or regulatory risk in any one jurisdiction. For finance leaders at firms with revenues between £50m and £500m, the question is no longer whether to operate across multiple hubs, but how to do so efficiently.
What Changed
Historically, mid-market firms that wanted to hold cash in multiple financial centres had two options. The first was to incorporate a subsidiary in each jurisdiction, which brought with it local board requirements, separate tax filings, transfer pricing obligations and often a physical office. The second was to rely on a single international bank that offered multi-currency accounts, but this often meant that cash was technically held in one jurisdiction, exposing the firm to that country's regulatory and political risk.
Over the past three to four years, a third option has matured. A combination of regulatory developments, banking technology upgrades and the rise of non-bank financial infrastructure providers has made it possible for mid-market firms to open and operate cash accounts in multiple jurisdictions without establishing a local legal entity in each one. Key enablers include:
- Regulatory sandboxes and licensing reforms in the Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) that allow non-resident companies to hold operational accounts more easily.
- Hong Kong's enhanced virtual banking framework, which has lowered the barrier to entry for foreign-incorporated firms to open accounts remotely.
- London's continued openness to non-domiciled treasury operations, particularly through the City's specialist challenger banks and fintech platforms that offer multi-currency, multi-jurisdiction account structures without requiring a UK trading entity.
- The rise of treasury management platforms such as Trovata, Kyriba and Cashforce, which aggregate balances across banks and jurisdictions into a single dashboard, reducing the operational burden of monitoring multiple accounts.
Why It Matters
For mid-market firms, the ability to centralise cash management across Dubai, Hong Kong and London without multi-jurisdictional overhead directly affects working capital efficiency, currency risk exposure and the cost of capital.
A firm that can hold cash in Dubai can settle with suppliers in the Middle East and Africa without routing payments through a London account and incurring FX spreads and delays. A firm with a Hong Kong cash pool can pay Asian contractors in their local currency and receive client payments from mainland China more quickly. A London hub allows for efficient access to sterling and euro markets and provides a familiar regulatory environment for European investors.
The commercial benefit is not just about speed. It is about reducing the number of currency conversions, lowering the cost of cross-border payments and improving the firm's ability to negotiate better terms with suppliers who prefer to be paid in their own currency.
How the Structure Works
The typical multi-hub treasury for a mid-market firm involves three separate bank accounts, each held in a different jurisdiction, but all linked to a single parent company. The parent company does not need to incorporate a subsidiary in each location. Instead, it relies on the bank's ability to open accounts for non-resident entities under local regulatory frameworks that permit this.
In practice, the structure looks like this:
- Dubai hub: A current account with a bank licensed in the DIFC or ADGM, often with multi-currency capability. The account is held by the parent company, which may be incorporated in the UK, Singapore or another jurisdiction. The bank performs the necessary know-your-customer (KYC) and anti-money laundering (AML) checks on the parent entity and its beneficial owners.
- Hong Kong hub: A similar account with a licensed bank in Hong Kong, often a virtual bank or a traditional bank with a dedicated non-resident corporate banking unit. The account is again held by the parent company, not a local subsidiary.
- London hub: A UK-based account, typically with a challenger bank or a fintech platform that offers multi-currency IBANs and integration with treasury management software.
Cash is moved between these hubs using the parent company's internal treasury policy, which sets limits on balances, currency exposure and counterparty risk. The treasury management platform provides real-time visibility of all balances and automates reporting.
Commercial Impact
The commercial impact of adopting a multi-hub treasury structure can be significant for mid-market firms. Based on publicly available case studies and industry reports, firms that have implemented such structures report:
- Reduction in FX costs: By holding cash in the currency of the jurisdiction where it will be spent, firms avoid repeated conversions. Savings of 0.5% to 1.5% of transaction value are commonly cited, though exact figures depend on volume and currency pairs.
- Improved payment speed: Payments to suppliers in the Middle East and Asia can settle in hours rather than days, reducing the risk of late payment penalties and improving supplier relationships.
- Lower overhead: Avoiding the need to incorporate and maintain subsidiaries in each jurisdiction saves legal, accounting and compliance costs. Estimates from corporate service providers suggest annual savings of £30,000 to £80,000 per jurisdiction for a mid-market firm, depending on complexity.
- Better interest income: Some jurisdictions offer higher interest rates on corporate deposits. Firms can allocate cash to the hub offering the best return, subject to currency and regulatory constraints.
Risks and Unknowns
The multi-hub treasury model is not without risks. Finance leaders should consider the following:
- Regulatory change: The frameworks that allow non-resident account opening in Dubai and Hong Kong are relatively new and could be tightened. A change in local regulation could force firms to restructure or repatriate cash.
- Banking relationships: Not all banks are willing to open accounts for non-resident entities, and those that do may impose higher fees or more stringent compliance requirements. Firms may need to maintain relationships with multiple banks to ensure continuity.
- Currency and country risk: Holding cash in multiple jurisdictions exposes the firm to the economic and political risks of each location. The recent volatility in Hong Kong's political environment and the potential for further sanctions on certain jurisdictions are relevant considerations.
- Tax implications: While the structure avoids the need for a local subsidiary, it does not automatically eliminate tax exposure. Firms must ensure that their cash management activities do not create a permanent establishment in any jurisdiction. Professional tax advice is essential.
- Operational complexity: Managing three separate bank accounts, each with its own banking portal, compliance requirements and reporting standards, can strain a small finance team. Treasury management software mitigates this but adds its own cost and implementation complexity.
FY Outlook
The multi-hub treasury model is likely to become more common among mid-market firms over the next two to three years. Several trends support this view:
- Continued growth of non-bank financial infrastructure: Platforms such as Wise Business, Revolut Business and Airwallex are expanding their multi-currency, multi-jurisdiction offerings, making it easier for mid-market firms to open accounts in multiple locations without a traditional banking relationship.
- Regulatory convergence: The DIFC, Hong Kong Monetary Authority and UK Financial Conduct Authority are all moving towards more harmonised standards for corporate account opening, particularly for non-resident entities. This reduces friction over time.
- Supply chain diversification: As firms continue to shift supply chains away from single-country dependence, the need for cash in multiple jurisdictions will grow. Treasury structures will need to follow the flow of goods and payments.
- Pressure on margins: In a higher-interest-rate environment, the opportunity cost of holding cash in a low-yield jurisdiction is more visible. CFOs will be incentivised to optimise cash allocation across hubs.
However, the pace of adoption will be constrained by the availability of skilled treasury professionals who understand multi-jurisdictional operations, and by the willingness of banks to serve mid-market clients in this way. The model works best for firms with predictable cash flows and a clear understanding of their currency and jurisdictional needs.
Conclusion
The multi-hub treasury is a practical response to the reality that mid-market firms now operate across multiple financial corridors, whether by choice or by necessity. The ability to centralise cash management across Dubai, Hong Kong and London without the overhead of full legal entity setup in each location offers genuine commercial advantages: lower FX costs, faster payments and better working capital control.
But the model demands careful execution. Regulatory risk, banking relationship fragility and tax exposure are real. Firms that approach the multi-hub treasury with a clear policy, appropriate technology and professional advice will be best positioned to capture the benefits while managing the risks.
For CFOs and finance leaders, the question is not whether to explore this structure, but how quickly their organisation can build the capability to operate it safely.
