Open a Bank Account

Once a foreign company completes the registration process for setting up a subsidiary, and then obtains the required business license, it is then permitted to open a bank account at local banks in the Chinese mainland.

RMB Basic Deposit Account (Basic Account)

This account is designed for cash collection and payments, cash withdrawal, daily fund transfers, and salary distribution. It also can be used for tax payments. In accordance with the rules of the People’s Bank of China (PBOC), one company can establish only one basic account with a single bank. To open an RMB basic account, the following documents are required:

1. Business license

2. Original ID card/passport of legal representative

Banks need to verify the legal representative’s original ID card/passport. However, since many foreign companies’ legal representatives may be based overseas at their parent company, it can be difficult to fly to China and submit their passport just for account opening. Most banks will require the legal representative to appear at the bank counter with his/her ID card/ passport, verify his/her intention to open an account, and ask other KYC questions. The bank will use audio and video recording during this procedure. If the legal representative is located overseas, face-to-face verification is still required, and the bank will ask its overseas branch to perform the identity verification. However, few Chinese banks provide this service.

3. Third-party authorization

If a company outsources the account opening process to a third party (e.g. an accounting or law firm), it must issue an authorization letter to the third-party employee who handles the account opening. The employee must submit his/her ID card/passport and authorization letter (with the company’s official seal, and the legal representative’s signature and seal) to the bank. If the legal representative handles the opening by himself/herself, the authorization letter is not needed.

4. Original ID card/passport and contact information of the authorized representative in the company for verification of high-value payments

When a company conducts high-value payments at the bank counter, the bank processing the transaction must call the authorized contact for confirmation. The entity must have at least two authorized contacts who are based in China. The contact number must be a domestic phone number only; a China cellphone number is acceptable.

5. Official seal, financial seal and signature/seal of the authorized person

6. Approval certificate for a foreign-invested company

7. Approval certificate of import and export (for the company that has the license for import and export)

8. Other documents/procedures as required by the specific bank branch

Both original and copies (with company seal) of the documentation should be submitted.

RMB General Deposit Account (General Account)

A general deposit account is used for fund flows resulting from deposits, payments/receivables, borrowing proceeds, debt repayment and other settlements. While the account may be used to deposit cash, it is prohibited from being used to withdraw cash and distribute salary.

There is no restriction on the number of general accounts that can be opened. Therefore, a company can open multiple general accounts — whether at the same bank or several banks — for different purposes. However, the branch/sub-branch where the general accounts are opened must be different from where the company’s basic account is opened.

Application

To open an RMB general account, a company would submit the same materials as required for an RMB basic account.

RMB/USD Capital Account (Capital Account)

A capital account is used to receive capital injections from foreign investors (such as the China entity’s parent company), as well as payments under current items and capital items approved by the State Administration of Foreign Exchange (SAFE).

Application

To open a USD capital account, the company must obtain a Filing Receipt from SAFE in addition to the documents required to open an RMB basic account.

For an RMB capital account, the company should have a special seal with “XXX Co Ltd RMB Capital Account Special Seal”. Some banks may also check the intention of opening an RMB capital account with the legal representative, and may require the contact information of the authorized person for confirmation of high-value transactions.

If a company’s registered capital is in a foreign currency (such as USD), the company can convert the foreign exchange capital into RMB on the basis of the company’s actual business need. The proportion of the conversion is 100 percent, subject to adjustment by the banking regulator. The converted RMB will be credited to a corresponding account under capital account “RMB converted pending for payment”.

USD Account (Settlement Account)

A company can open a USD account at the same branch or sub-branch as its RMB basic account. Cash withdrawals can be made through this account; however, the usage of the withdrawal is limited (e.g. for overseas travel expenses). The company must submit relevant supporting documents.

Application

In addition to the items numbered 1, 2, 3, 4 and 7 in the RMB basic account application, the following items are required to open a USD settlement account:

1. A filing receipt issued by SAFE

2. Approval certificate of foreign exchange transaction when filing for a foreign trade company, freight company and/or shipping company

3. Other documents/procedures that may be required by the specific bank branch

All original and copies (with a company seal) of the documentations should be submitted.