The documents required to open a bank account in China and the account opening process are slightly different from other countries. However, additional procedures are necessary for bank accounts for businesses established by foreign investors. Opening a bank account is a prerequisite for business activities. There are three options available to foreigners to enter the Chinese market.

WFOE (Wholly-Foreign Owned Enterprise) is the most common, "representative offices" and "joint ventures" are other options. When anyone starts establishing a WFOE, they need to obtain a business license in China.

After obtaining the business license, a commercial bank account is essential for the company to continue its activities. In recent years, the number of English-speaking customer representatives in the departments of Chinese banks that handle foreign corporate accounts has been increasing rapidly. This makes it easier for foreign investors who want to start a business in China but have a language disadvantage.

The Process of Opening a Bank Account in China

A foreign entrepreneur or company wishing to set up a company in China needs an RMB account to continue their business and a second capital account (usually in USD & EUR) that will enable them to conduct foreign exchange transactions, including overseas trade, if necessary.

In China, it is possible to apply remotely to open a bank account. However, a company official is requested to visit the bank to sign the documents and check the identity. Due to the measures taken by the State Foreign Exchange Administration and the People's Bank of China, it has historically been that the company's legal representative be at the bank with his passport, photo, and identity checks. But due to travel bans during the pandemic process, it is accepted by video conference.

Documents required to open a bank account in China

When you want to open a company bank account in a Chinese bank, the names and contents of the documents may vary depending on the bank to which you apply. However, the primary documents are:

• Copies of passports

• Business registration certificate

• Company business license

• Articles of Association (should contain owners & the board of directors fo company)

• Detailed information for the legal representative in China.

• Proof of company addresses

Account Type and Currency to Open a Company Account

The Chinese RMB is not fully convertible. In addition, foreign exchange movements within the country are subject to the approval of the State Administration of Foreign Exchange. This can create bureaucratic obstacles for foreign investors who want to do business in China. For these reasons, opening a corporate bank account as RMB is a legal obligation and essential for the smooth operation of your company.

How Many Days Does It Take to Open a Commercial Bank Account in China?

It would be more accurate to answer this question in 3 stages: How many days will it take to open the main capital account, open foreign currency accounts and perform e-banking transactions? The approval authority for your RMB account is the bank you are applying for and the People's Bank of China. In the other two stages, your application bank is authorized.

1. RMB basic bank account opening permit: Approx 5 business days

2. Activation of e-banking transactions: Approx 10 business days

3. Foreign exchange registration certificate and capital account: Approx 10 business days.

Why Have Chinese Banks Tightened Controls and Terms?

In recent years, and especially at the beginning of the pandemic, many front companies have been established in China using other people's identity. Similarly, there has been an increase in the number of foreigners establishing companies for the sole purpose of obtaining a work permit and residence permit in China. As a result, control over commercial laws, company formations, and banking activities in China has increased.

Banks are no longer content with just receiving the documents listed above. Instead, they apply a series of procedures to verify companies' physical existence and real business applying for bank account opening.

Accordingly, banks assign a bank officer to visit the addresses of companies applying to open commercial accounts, which are included in the application documents. The bank official goes to the company address, verifying the address and checking whether the job specified in the application is carried out at the specified address. In addition, the foreigner named in the application documents as a company official must be present at the company during this visit. Bank officials are required to take a photo of the visit and attach it to the company file.

Due to travel bans, these procedures were partially relaxed, and it was decided to hold a "video conference confirmation check" with company officials who could not come to China. Although controls are tightening, China is open to foreign investment and trying to make things workable for foreign investors.

Opening a commercial bank account in China may take time due to standard procedures and current banking policies in China. In addition, there may be interruptions in the application process due to a lack of paperwork or inappropriate paperwork.  But in the end, the process can generally be completed without too much burden.

Expand into China without setting up a company, by employing or relocating key staff to take a first step in exploring the market. A professional employer organization (PEO) service can act as the official employer of record (EOR) for your staff in China while you expand your business. With the support of our trusted partner network, we can facilitate local hiring and employment without the time and cost of setting up a legal entity in country.

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