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Getting a corporate bank account for your China business
When setting up a business in China, it can feel like your to-do list is never-ending.
There are so many tasks to complete – some complex, some more straightforward. Deep in that to-do list comes the task of setting up your corporate bank account. Unfortunately, this falls in the ‘more complex’ category. There are numerous reputable financial institutions operating in China, from local banks such as Bank of China, Industrial and Commercial Bank of China and Merchant’s Bank – to international names like Standard Chartered, HSBC and Hang Seng Bank.
All offer the full range of services you would expect from an international financial institution, except there are certain governmental limitations on the International Banks. Even though setting up a corporate bank account in China is no more arduous than anywhere else in the world, it still requires the same careful consideration you would apply to any other business decision. And there are several boxes to tick to ensure you have everything in place before approaching your bank of choice. With that in mind, let’s look at everything you need to know to get your account up and running – from the documents required to the account opening process itself.
Setting up a corporate bank account in China
To ensure the account opening process is as painless as possible, it’s vital that you have all the required documents in place before you start the process itself. The steps below are relatively simple but failing to do them in the correct order is likely to cause delays in opening your account.
1. Get your business license: This step is crucial. Without your business license, the bank will not recognize you as a business and you won’t be able to open your corporate bank account. The license application process consists of four simple steps:
- Choose your business activity – decide on the business activity and type of business you wish to set up.
- Finalize your company name – ensure your name aligns with China’s naming conventions and is available to register.
- Finalize all incorporation paperwork – complete your business license application.
- Receive your license notification – once your business license is granted you can press ahead with opening your corporate bank account.
One of the best ways to get your business license up and running is to work with a local company formation specialist, who can help you manage every stage of the application process.
2. Pull together your legal documents: Once your business license is arranged, it’s time to ensure the rest of your legal and corporate documents are in line. The exact documents required will differ slightly from bank to bank. As a rule, however, most financial institutions require the following:
- A corporate account opening form.
- A board of directors’ resolution sanctioning the opening of the account, and the signatories to the account.
- A copy of your company’s certiﬁcate of incorporation (i.e. the Business License).
- A copy of your trade license (if applicable) – the trade license is specific to the goods being traded within China.
- A copy of the company’s memorandum and articles of association.
- Copies of passports for all individuals involved in the corporate structure of the company.
- Original passport of the appointed Legal Representative
Some banks may also require additional supporting documents; like contracts or invoices, reference letters from business partners, company business plans, and information on the type of the activities on the account. Nowadays all banks must prove to their regulators that they know their customers well (know-your-client procedures – KYC processes), including the nature of their business and source of funds, so you can expect them to ask you about these things as part of the account setup process. If your company is owned by another company, you may be required to provide the same documents for both. For example: If Company X is a shareholder in Company Y, then you may need to provide documents for both Company X and Company Y to open an account. Your local company formation specialist can give you detailed advice on these requirements
3. Check visa-related requirements: The next step towards opening your corporate bank account is to establish whether individuals in the corporate structure are required to have residency visas. Some banks require proof of this from at least one director, while others do not ask for it at all. The issue of whether your chosen directors have residency visas in place may have a bearing on which banks you consider applying to. It’s best to find out early which banks have these requirements, so it doesn’t cause any delays to your application further down the line. In addition it is important to check whether a residency visa specific to the Legal Representative is required together with a local mobile number. Often happens know for the KYC process that the bank will call the appointed Legal Representative to verify information.
4. Choosing your bank: Once your documents are in place, you can now approach one of China’s many banks. There are several things to consider at this stage. Eligibility factors like the one mentioned above should certainly be considered. And some banks may be better suited to you and your business than others. You may wish to bank with a Chinese institution like Bank of China, for example, rather than a Western bank, if you are solely trading locally within China. Or if you’re conducting investment or overseas trade transactions, you might consider applying to Western banks such as HSBC, which are more suited to those types of business. The choice depends on you and the type of business you will be doing. Your business cash flow could also be a factor as most banks in China require a continuous minimum balance. Once again, a company formation specialist can assist with this selection process, both in helping you decide which bank is right for you and putting you in contact with the relevant institutions.
5. Bank account opening process: Once you have the required paperwork in place, you can begin the formal account opening process. It is usually advisable to visit a branch and speak face-to-face with an advisor who can answer any questions you might have. You can either book this appointment yourself or ask your company formation specialist to do it for you, as they will already have close relationships with the banks. At your appointment, which should take no more than 60 to 90 minutes, you’ll be required to present the documents listed above for checking. If all is in order, the bank representative will let you know that they can move forward with the application process. In most cases, your account will be open in around five to 10 working days (although with the international banks it can be between 20-30 days).
Make it easy with a business setup partner
And there it is – the complete China business bank account set up process. While it only consists of a few steps, ensuring you complete each one accurately will go a long way to getting your bank account open as quickly as possible – particularly when it comes to preparing the necessary documents. Working with an incorporation agent specialist is the best way to ensure this process runs smoothly. You have already got plenty of things to worry about when establishing a new business: make sure that setting up your corporate bank account isn’t one of them.
DISCLAIMER: All information in this article is verified to the best of our ability and is assumed to be correct at time of release; however, Woodburn Accountants & Advisors does not accept responsibility for any losses arising from reliance on the information provided within. The information provided is for general guidance and does not replace specialized advice.