As the name suggests, a corporate bank account is a bank settlement account, refers to an account opened in the name of the company with the bank.
The paperwork to open a corporate account is mostly the same when it comes to the mandatory documentation:
1. Business license
2. Identity documents of Legal Representative
3. Identity documents of two e-banking administrators (one of whom can be the Legal Representative)
4. A full set of company seals
5. Copy of articles of association
6. Copy of the shareholders’ identity documents
1. The Legal Representative will be present when filing the application in person. This step cannot be replaced by video call, nor can it be done with a Power of Attorney. The banker must meet in person with the individual at the location of the bank for the initial account opening. 2. The actual operation address is required. Bankers will visit the office to verify.
*The identity documents mentioned above are the ID Cards for Chinese residents and passports for non-Chinese residents.
The timing and actual process of paperwork varies with each bank, and the ability to open corporate bank account also relies on due diligence process by the banks, which also makes the entire process differ from bank to bank. We advise you to work with a service provider that maintains long term business relationship with the banks to ensure the process can be as smooth as possible.
Basic deposit account
The basic deposit account is the main account of a corporate. The main function can be to receive and process payments of the daily operation of the enterprise as well as running payrolls, with daily cash withdrawal to be handled through this account. Each enterprise may only open one Basic Deposit Account, and any additional accounts, including foreign currency accounts must be opened by having first successfully opened this Basic Deposit Account. The bank shall make corresponding registration on the certificate of opening registration.
General deposit account
This account typically has the functions of borrowing / corporate loans and other commercial accesses that the Basic Deposit RMB Account does not offer. Often, as a Wholly Foreign Owned Entity (“WFOE”), the businesses will require to open this account in foreign currencies in which the business often conduct transactions with, such as in Euros, U.S. Dollars, Sterling Ponds, etc. The general deposit account is a bank settlement account opened by the depositor at a bank business institution other than the bank where the basic deposit account is opened due to borrowing or other settlement needs. General deposit accounts can be cash deposited, but not cash withdrawals.
Special Deposit Account
The special deposit account is a bank account opened by corporate in accordance with laws, administrative regulations and rules for the special management and use of their specific purpose funds. Funds for specific purposes mainly include capital construction funds, renovation funds, securities trading settlement funds, futures trading margins, trust funds, inter-bank funds deposited by financial institutions and other funds that need to be managed by special accounts.
Temporary Deposit Account
A temporary deposit account is a bank account opened by an corporate for temporary needs and use within a specified period of time. When necessary for temporary business operations in other places, an application may be made for opening a temporary deposit account in other places for the receipt and payment of funds.
Principles of Use
1. A corporate can only open one Basic Deposit Account
An corporate can only open one basic deposit account in the bank, and cannot open a basic deposit account repeatedly. Account holders who have opened a basic deposit account and open, change or cancel the other three types of accounts must go through the relevant procedures with the basic deposit account opening registration certificate and register accordingly on the basic deposit account opening registration certificate.
2.The enterprise can choose any bank to open an account
The corporate may choose any bank to open a bank account based on its geographical location, business needs, and service quality of the bank.
However, an enterprise shall not arbitrarily transfer its bank account on the grounds that the bank where the account is opened strictly implements its rules and regulations, nor shall it forge or alter certification documents to deceive the bank into opening a bank account.
The main banks in China that have established history of working with foreign communities are:
3. To open and use bank accounts in accordance with the relevant provisions of laws and administrative regulations. For example, only basic deposit accounts can withdraw cash; transfer of funds from corporate bank account to personal bank account must comply with relevant regulations; only personal lawful income can be transferred to personal bank account; do not use bank settlement accounts for tax evasion, debt evasion, cash evasion and other illegal and criminal activities.
4. According to the Administrative Rules on RMB Settlement Accounts regulation, only legitimate income can be transferred into personal bank account, For the amount transferred to individuals, the corporate must provide the bank with the legal basis for payment (receipt). If the amount is taxable, the tax withholding entity shall provide the bank with the tax payment certificate when making the payment.