Opening a corporate bank account in China is not as simple as walking into a bank with a business license. The process has become stricter in recent years as part of China’s anti-money laundering and financial regulatory reforms, and a WFOE that’s not prepared for the bank’s due diligence requirements can spend weeks going back and forth with the bank while the company can’t receive payments or pay suppliers.
Here’s what the process looks like, what the bank requires, and how to get the account open faster.
The Post-Registration Sequence
A WFOE that has just received its business license cannot open a bank account immediately. The sequence is: business license, then company chops — the official company seal, the financial seal, and the legal representative’s seal — then tax registration, and then the bank account. The bank requires the chops to authenticate the account opening documents, and the tax registration certificate is required to open the account for tax purposes.
The chops are engraved by a government-authorized chop engraver, and the engraving takes two to three working days. The company must present the business license to the engraver, and the engraver must verify the license with the public security bureau before engraving the chops. The company chops are registered with the public security bureau, and the registration record is evidence of the chops’ authenticity.
The tax registration is done at the tax bureau, and the tax registration certificate — or the electronic tax registration — is issued by the tax bureau. The tax registration is required for the bank to open the account as a tax-registered account. A bank that opens an account for a company that’s not tax-registered may be questioned by the tax authorities.
Choosing the Bank
A WFOE can choose any commercial bank in China — the Bank of China, the Industrial and Commercial Bank of China, the China Construction Bank, the Agricultural Bank of China, or a joint-stock bank such as China Merchants Bank, CITIC Bank, or Ping An Bank. Each bank has its own account opening requirements, its own fee structure, and its own service quality, and the differences matter.
The state-owned banks — the Bank of China, ICBC, CCB, ABC — have the largest branch networks and the most experience with foreign-invested enterprises. But they’re bureaucratic, the account opening process can be slow, and the English-language service may be limited. A WFOE whose management doesn’t speak Chinese may struggle with a state-owned bank.
The joint-stock banks — China Merchants Bank, CITIC Bank, Ping An Bank — tend to be more customer-oriented, with better online banking platforms and more responsive service. The trade-off is that the branch network is smaller, and the fees may be higher.
The foreign banks — HSBC, Citibank, Standard Chartered, DBS — are the most familiar to a foreign company. They have English-language service, they understand the needs of a foreign-invested enterprise, and they can coordinate with the parent company’s bank in the home country. But the foreign bank’s China operations are limited — the branch network is smaller, the services are fewer, and the fees are higher. A foreign bank may also require a higher minimum deposit and a higher average balance than a Chinese bank.
The most practical approach for a new WFOE is to open an account with a Chinese joint-stock bank — China Merchants Bank or CITIC Bank are the most common — for the day-to-day RMB operations and, if the WFOE needs foreign currency accounts, to open a foreign currency account with the same bank or with a foreign bank.
The Account Types
A corporate bank account in China consists of a basic account and, if needed, additional accounts. The basic account is the primary RMB account — the account through which the company receives payments, pays suppliers, pays salaries, and pays tax. The basic account is the only account from which the company can withdraw cash — other accounts are deposit and transfer accounts only.
The basic account is opened with a single bank — the company can have only one basic account — and the bank reports the basic account to the People’s Bank of China, the central bank. A company that opens a basic account with one bank and then opens another basic account with another bank is violating the single-basic-account rule, and the second account will be closed.
The general account is an additional RMB account for deposits and transfers. The general account can’t be used for cash withdrawals or for salary payments. A company that needs separate accounts for different business lines — or that wants to bank with multiple banks for relationship purposes — opens general accounts at the additional banks.
The foreign currency account is for holding and transacting in foreign currencies — USD, EUR, JPY, and other currencies approved by the foreign exchange authority. The foreign currency account is subject to foreign exchange controls — the company can receive foreign currency from export sales, from capital contributions, and from foreign loans, and can pay foreign currency for imports, for royalty payments, for dividend repatriation, and for other approved foreign currency expenditures. The foreign currency account is opened with the same bank as the basic account or with a different bank, and the bank reports the foreign currency transactions to the foreign exchange authority.
The Account Opening Documents
The bank requires the following documents for a basic account: the business license — the original and a copy — the company chops — the official seal, the financial seal, and the legal representative’s seal — the legal representative’s identification — the passport or the Chinese ID card — the tax registration certificate, and the articles of association. Some banks also require the office lease contract — to verify the company’s address — and a site visit by the bank’s staff to the company’s office.
The bank’s site visit is a regulatory requirement — the bank must confirm that the company exists at the registered address, that the office is a genuine business premises, and that the company is conducting the business described in its business license. The bank’s staff visits the office, takes photographs of the office, the company sign, and the company’s nameplate, and prepares a site visit report. A company that’s registered at a virtual address — a serviced office or a co-working space with no dedicated workspace — may fail the site visit, and the bank may refuse to open the account.
The financial seal and the legal representative’s seal are used for payment authorization. The bank records the specimen of the chops — the impression of each chop on a specimen card — and compares the chops on the payment instructions with the specimen. A payment instruction that’s stamped with a chop that doesn’t match the specimen is rejected.
The legal representative must appear in person at the bank to open the account — or, if the legal representative is a foreign national who can’t visit the bank, the company must provide a power of attorney authorizing a representative to open the account, and the bank may require a video conference with the legal representative to verify their identity and their instruction. The in-person requirement is a regulatory requirement, and the bank enforces it strictly.
The Online Banking and Payment Systems
A corporate bank account in China comes with online banking — the ability to view account balances and transactions, to initiate payments, and to approve payments through the bank’s online portal or mobile app. The online banking is essential for a WFOE that needs to make payments regularly — the alternative is to visit the bank branch with paper payment instructions every time a payment is needed.
The online banking payment authorization is typically a two-person process — one person creates the payment instruction, and another person approves it. The bank provides the USB keys — the electronic authentication devices — for each authorized person, and the payment instruction is authenticated by inserting the USB key and entering the password. The two-person process is a security control — no single person can initiate and approve a payment.
The bank also provides the tax payment system — the connection between the bank account and the tax bureau’s electronic payment system, through which the company authorizes the bank to pay the tax directly to the tax bureau. The tax payment system is separate from the online banking system, and it requires a separate registration with the bank and the tax bureau.
The Timeline
The account opening process, from the date the company has all the required documents to the date the account is operational, takes one to two weeks. The bank reviews the documents, conducts the site visit, processes the internal approvals, and activates the account. The timeline depends on the bank’s efficiency, the completeness of the documents, and whether the site visit can be scheduled promptly.
A company that needs to receive payments or make payments before the bank account is open has a problem. The company can’t invoice customers until the tax registration is complete and the fapiao system is set up — and the fapiao system requires the bank account. The company can’t pay suppliers, can’t pay rent, and can’t pay employees until the bank account is open and funded.
The practical solution is to plan the account opening as part of the company setup timeline and to start the bank selection process before the business license is issued. The company identifies the bank, contacts the bank’s corporate account department, obtains the account opening checklist, and prepares the documents in advance. The earlier the bank is selected and the documents are prepared, the faster the account is opened after the license is issued.
The Ongoing Compliance
A corporate bank account in China is subject to ongoing compliance requirements. The bank periodically reviews the account — typically annually — and requires the company to update its information — the business license, the legal representative, the company address, the business scope. A company that doesn’t respond to the bank’s information update request may have the account frozen — the account continues to exist, but no transactions can be processed until the information is updated.
The bank also monitors the account for suspicious transactions — large cash deposits, large cash withdrawals, frequent transfers to personal accounts, transactions with designated high-risk countries — and may freeze the account or report the transactions to the anti-money laundering authority if the transactions are suspicious. A WFOE that conducts legitimate business transactions should keep records of the transactions — the contracts, the invoices, the delivery documents — to explain the transactions if the bank asks.
The foreign exchange authority also monitors the foreign currency account and the foreign currency transactions. A foreign currency transaction that exceeds the threshold — or that’s inconsistent with the company’s business scope — may be questioned by the bank or by the foreign exchange authority. The company should ensure that its foreign currency transactions are documented and that the documentation supports the business purpose of the transaction.
