Written through Viktor Rojkov and Betty Zhang
Once you have received an advertising license in China, this means that the all-foreign company or WFOE has been legally established, however, another vital attention is the company’s bank account, without which the entity will not be able to bring out its day-to-day life. Daily transactions The entity will have to decide on an express bank to open the bank account of the newly created company; this will probably be the first thing you do after you get the advertising license.
Once you have to open your WFOE’s bank account, you may be asked as follows before starting the processing job:
You may feel that it will not be an undeniable procedure for the bank’s new consumers when those questions are asked.
In fact, Chinese banks are under the scrutiny of the People’s Bank of China (PBOC), which now leads to a focus on KYC (Meet Your Customer) policy. Under PBOC’s leadership, Chinese banks have also been stricter at opening bank accounts ever since. April 2020, that is, for start-ups, either a domestic or foreign-owned company.
We’ll see why banks are cautious when opening new accounts and discuss the detailed banking needs in China’s position in this article.
As a result of the COVID-19 pandemic, there has been an uptick in activity that has led Chinese banks to prioritize domestic compliance control, during the epidemic some organizations and Americans took advantage of the crisis environment to bring out illicit activities. it included collecting non-public data from Americans less aware of legality (students, seniors) and opening up a large number of corporate accounts to their names, which has led to a scenario in which banks have faced the consequences of illegal transactions and loss of cash.
Faced with increased pressure from local and national authorities, banks have been forced to update their procedure for opening corporate and bank accounts in China.
In practice, foreign corporations want two accounts to be fully operational in order to open a business in China. The first is a fundamental account in RMB and the moment is a capital account (which is an investment vehicle in China in foreign currency, for example in US dollars or euros).
However, given the ban due to COVID-19, many foreign and U. S. corporations had to be provided at the bank to open any type of bank account required to manage their businesses.
As a result, Chinese banks have proposed an option, i. e. a videoconference confirmation check, to update the face-to-face scale at the bank. In addition, some banks have implemented the concept of a virtual interview, provided that the Applicant Documentation is legalized at the Chinese embassy or consulate of the country in which you reside. There were internal procedures and documents to follow and provide with real-time authentication of the user’s videoconference.
The scenario was drastically replaced in an era of 3 to 4 weeks, with banking policies facing restrictions and new regulations on domestic and regulatory compliance.
Based on the new requirements, banks in China insist that the legal representative give the user their original passport for account opening.
To validate the applicant’s “real business”, banks have established an on-site procedure.
In this process a bank agent visits the physical location (office) of the applicants to verify that they have a physical and personal location. A photo of the location will be taken with the company ID card and an advertising license for the bank’s internal compliance purposes.
Based on this situation, the bank will require that the user who presented his/her passport as a verification document on behalf of the company (the legal representative) be provided at the time of account opening.
Foreign investment is welcome and compulsory in China and, as a result, some banks are advancing and improving their compliance and policies while meeting official government requirements.
Some bank branches will allow the express data to be provided in the scripted video made through the affected user through the ban and cannot physically to China to open their bank account in the user, then this video is validated through the banking supervision service The video is accepted through the compliance team , the scale is made in the “physical office”.
The user to open the bank account will go to the bank with the required document package and then the authentication call will be made in real time to the individual to verify the opening of the bank account.
As confusing as it may seem, banks are as lenient as permission to help their new customers.
A large number of corporations in China are in the process of being created and face such difficulties. If your business plans have been disrupted by those existing banking policies, please contact us to see if there is a way to facilitate smoother onboarding. For any business questions in China, you can contact us at china@dezshira. com.
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