Opening a Corporate Bank Account in China

Unlike in Hong Kong, the process of opening a bank account in the Chinese Mainland has always been relatively straightforward because of a lack of KYC and due diligence procedures. The big Chinese banks such as the Bank of China and the ICBC have welcomed foreign-invested companies to open their bank accounts at their branches, with very limited KYC procedures in place to review the actual business of these companies. The whole account opening process for a new foreign-invested enterprise (WFOE) usually takes three to four weeks.

This contrasts with opening a bank account at foreign-invested banks such as HSBC and Standard Chartered, which offer a full range of banking services but adhere to international standards when it comes to the intake of business. The Chinese branches of foreign banks have more elaborate compliance systems and relatively high KYC requirements and as a result, the process can take longer.

Therefore, the main challenge, especially in the case of Chinese banks, is procedural; and unfortunately the process is becoming even more difficult. Banks have always preferred the company’s legal representative to come to the bank in person to sign documents, but considering the hassle and potential delay when involving a non-Chinese legal representative residing abroad, most banks have traditionally been more flexible: the legal representative’s original passport or a notarised / legalised copy has always been sufficient to convince a local branch to accept an application to open a new bank account.

In recent months, however, we have seen a change in this attitude. There are still bank branches that take a more flexible approach – accepting the original passport or, in some cases, confirming the legal representative’s approval through a WeChat call or recording. These exceptions are often made based on the good relationship between a specific bank branch’s officers and the corporate service provider in charge of the bank opening process.

Under the guidance of internal policies from China’s central bank, however, the number of branches that dare to remain flexible is diminishing. In most cases, the legal representative is now required to come to visit the local branch in person.