How to open a business bank account in China

With a population just shy of 1.4 billion, China is an enticing market for many entrepreneurs and established businesses looking to grow. Despite limited market freedom, foreign investment is making its way into the country, growing year on year 6.4%, to USD 135.6 million in 2015. The vast majority of this investment goes to manufacturing and real estate development, with business services and retail also well represented.

If you’re thinking of venturing into the Chinese market, you'll have a lot to consider. The economic conditions are unique, and can feel complex to the uninitiated. One thing you'll have to do quite quickly is set up a local company bank account. Here is our guide, to help you set up your business bank account in China.

What types of corporate entities are there in China?

Starting a business in China can be more complex than elsewhere in the world, with rules that may be unfamiliar. If you’re in any doubt about the best form of entity for your company, then find a reputable local agency who can advise you.

As a foreigner opening a business in China you have three main options:

• Whole Foreign Owned Enterprise (WFOE)
• Joint Venture
• Representative Office

Other company structures, like sole proprietorship, are only available to Chinese nationals.

It’s not uncommon for foreigners to open their business in Hong Kong (where the company formation legislation is more similar to that in Europe and America), before trading in China. If this is a route you're interested in taking, then you should take advice locally to ensure you’re operating legally.

Can I open a business bank account in China with a foreign corporate entity?

Businesses that aren't registered in China can open foreign currency accounts, but there are more regulations which apply when opening Renminbi (RMB) accounts. This is because RMB isn’t a fully convertible currency, and any accounts opened by foreign entities would need to be approved by the State Administration of Foreign Exchange. The types of accounts available to foreign registered companies are set out in detail on the local HSBC website.

What’s the process for opening a business bank account in China?

The documents you need to open a business bank account in China will vary from bank to bank and according to the company structure. You can expect to be asked for the following:

• Proof your business is properly registered, such as a valid Business Licence, Enterprise Code Certificate, Tax Registration Certificates or Articles of Association
• List of directors’ names, along with a company chop (stamp)
• Proof of identification for legal representatives of the company, including responsible officers, directors and principal shareholders
• Details of the company structure and ownership

Depending on the type of account required, you might need to provide evidence of the account purpose or further documentation. If you’re opening an account for a foreign registered company or joint venture, then you may have to provide proof of state approval of your business venture.

Because the process varies according to the specific circumstances, it's worth calling ahead to confirm the documents you'll need and make an appointment. Visiting a bank in a financial or commercial hub of a major city, where staff have more experience in opening accounts for foreigners, can also make the process run smoother.

Can I open a business bank account as a non-resident?

It's possible to open a business bank account in China without being a resident. The types of accounts available to you will depend on the structure of your company, and whether or not it's registered in China.

Can I open a business bank account from abroad?

It's theoretically possible to open a bank account from abroad, as some banks will accept certified copies of all required documentation, which can be presented by an intermediary.

Some local agencies, such as Healy Consultants, will work with fee paying clients to open a business bank account. In this case, the business owner isn’t required to be at the bank in person, meaning the process can be fully completed from overseas.

A good alternative is to choose a global banking corporation such as HSBC and open an account locally in your home country, which can then be transferred to a Chinese branch later.

Can I open a business bank account online?

It's very difficult to open a business account entirely online because you are usually required to attend a bank branch in person to present your documents. If you want to work online only, you could consider using a reputable local agency to help you.

Which bank should I choose?

There are a huge number of local and international banks operating in China. In some cases it's easier to do business with Chinese suppliers if you have a bank account with one of the local banks such as ICBC. However, most large banks will offer all the services you need for your business. Choosing a bank with a helpful local branch might make life easier in the long run.

To start you off, here are some large local and international banks offering business banking services:

• Hang Seng Bank
• ICBC
• Citibank China
• Standard Chartered

Hang Seng Bank

Mainland China’s arm of the Hong Kong based Hang Seng Bank offers a range of business banking services. Choose from one of four different types of RMB accounts, or a foreign currency account. RMB accounts are interest bearing. The documents needed to open an account under different circumstances are set out clearly on the bank’s account opening procedures guide.

ICBC

ICBC is one of China’s largest banks. Customers can access a large network of branches and ATMs. Products on offer include bank accounts, payment cards, loans and other financial products designed for businesses.

Citibank China

Citibank China is part of the American Citigroup, and was the first foreign bank to incorporate in China. They offer a range of business banking products, and have strong coverage across the country’s main industrial and economic hubs. If you already bank with Citigroup locally then this might be a good option for you, as it could be easier for you to have your account transferred to Citi’s Chinese operating company, than it’d be to open a new account from scratch.

Standard Chartered

Standard Chartered offers a good range of business banking products, including a bundle account which allows you to manage all transactions including employee and tax payments, online banking, cash flow management and investment. To be eligible for this ‘Smart Business’ account you must maintain a minimum monthly balance which is set according to the other services you wish to access.

Once you've chosen a bank you want to work with, call them and make an appointment. You should be able to check the documentation you need and take it with you, so you can open your account in one visit.

Banking fees and charges

Before you open your business bank account in China, it's important to read the terms and conditions carefully - especially the section on banking fees and charges.

The banking fees and account structure might be quite different to that which you’re familiar with. For example, it’s common to find monthly account handling charges and fixed fees for some banking transactions. Even when these fees look small, they can build up over time.

From time to time, most businesses need to make international money transfers - for example, to pay suppliers based overseas. The problem is that many banks don't offer a good deal to their customers when making international money transfers like this. If your bank’s exchange rate is lower than the real mid-market rate, then you’re paying more in fees than what’s necessary.

Use an online currency converter to check the actual value of your money before you transfer internationally. To save on your transfers, consider using an alternative service like Wise. Not only does Wise already offer the true exchange rate you can find on Google, but since your international transfer is made with two local transfers in each respective country, large SWIFT transfer fees are also cut out, leaving you with more money in the end.