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A foreign-invested company at least opens a basic account and a capital account in China. There is no limitation to opening general accounts. The Basic Account is the first account in CNY to allow a company to open other accounts and can be used to receive income and pay for expenses, salary, and cost domestically and overseas. The Capital Account is the only one in which the investor can inject capital.
Sometimes a company will open a general account in foreign currency (USD, EUR, etc.) to receive overseas payments, then change it to CNY when required.
When a foreign-invested company wants to get a loan overseas, it will apply for approval from the foreign exchange bureau, then open a specific account for the loan. The account is only allowed to receive the loan and pay back the loan and interest overseas.
To make the mass overseas transactions with small amounts easier, there are some digital banks or financial companies to allow Chinese companies to open a account for receiving from and paying to other countries and regions.
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Fast and Convenient
- Opening a bank account will take a maximum of 5 working days.
- There is no requirement to travel to China for the account opening process
- The account can be opened without the need for a physical office
Required Documents
- Original business licenses
- Company seal, financial seal, and the personal seal of the Legal Representative
- Original passport or Chinese ID of the Legal Representative
- Signed application documents
Bank Accounts Openning Process
After obtaining the business license and company seals, the company is ready to open bank accounts. Here is the general process for a foreign-invested company to open its bank accounts in China. There could be additional steps required by the bank according to the bank selected by the company.
Step 1: Know Your Client (KYC) by the Bank
In order to qualify the company, the banker will conduct a Know Your Customer (KYC) process with the Legal Representative. This involves providing basic company information and personal details of shareholders and the management team. The KYC can be conducted through an online video interview. Additionally, an organizational structure that includes the final controller(s), who hold more than 50% of the shares, is also required.
Step 2: Office Inspection
To meet the qualification requirements, the bank will conduct an office inspection and take photos with either the Legal Representative or the Finance Manager present. However, if the company is listed on the Bank of China’s white list, such as Sinovest, qualified clients can bypass the office inspection process.
Step 3: Basic Account Opening
Opening a basic bank account in China is a straightforward process. Gather the required documents, visit a local branch of a major bank, fill out an application form, and provide the necessary documents. The bank will review your application, conduct verification checks, and once approved, you’ll receive your account details. The whole process will be done within a week.
Step 4: Record of Foreign Direct Investment
After opening a basic account, a foreign-invested company must record its information with the Foreign Exchange Bureau. This enables the company to open a capital account, facilitating the receipt and payment of funds from overseas.
Step 5: Capital Account Opening
Once a foreign-invested company has opened a basic account and completed the record of foreign direct investment, it will be granted permission to open a sole capital account.
Frequently Asked Questions
Opening a bank account for a company in China is generally not a difficult process. However, certain requirements need to be fulfilled. The bank will conduct an inspection and verify the original passport of the legal representative. Additionally, they will request personal information from shareholders and the management team. It is necessary to provide an organizational structure that includes the natural persons who hold the majority of the shares. By meeting these requirements, the process of opening a bank account can be successfully completed.
Typically, the bank requires the Legal Representative to personally visit the bank office and bring their passport for KYC verification and account opening. However, Sinovest collaborates with the Bank of China to provide qualified clients the convenience of skipping the in-person visit. Sinovest takes responsibility for bringing the original passport to the bank office for inspection on behalf of the client.
Under normal circumstances, the banker conducts an office inspection and meets the Legal Representative or the Finance Manager in person. However, Sinovest has partnered with the Bank of China to exempt qualified clients from this requirement.
China has foreign exchange controls in place. However, it is generally possible to make payments overseas for services and goods, as long as the transactions are legitimate and supported by necessary documentation such as contracts, invoices, and import records.
Once taxes have been paid, company dividends can be distributed to investors.