Business Banking in China for Foreign Companies
Business Banking in China for Foreign Companies
In China, registering the company is the easy part. The bank account is where foreign owners get stuck – sometimes for months, sometimes for good.
I have spent years running companies connected to China, and I am from a high-barrier country myself, so I have watched this from both sides of the table. Years ago, opening a business account here was routine. Our own China company opened accounts at the big state banks without trouble. That has changed. Banks that used to onboard almost anyone now look hard at foreign-owned companies, and harder still at owners whose passport puts them in a higher-risk box.
So the single most useful thing I can tell you about banking in China is this: find out whether you can get an account before you register the company. The rest of this guide is what that check involves – the accounts you open, what the bank wants from you, how money moves in and out under China’s currency controls, and when you are better off not opening a Chinese account at all.
The accounts a Chinese company holds
A Chinese company does not run on one bank account. It holds a small set, each with a defined job, and you open them in a fixed order.
- The basic account (基本户) is the main operating account. Salaries, tax payments, supplier payments, cash withdrawals – it all runs through here. A company can hold only one, the central bank sets that rule, and it is the first account you open. Everything else references it.
- The general account (一般户) is a second operating account in yuan. It cannot pay out cash, but you can open several at different banks. That is useful for separating business lines, or for keeping a backup if one bank tightens up on you.
- The capital account (资本金账户) receives foreign investment. When a shareholder abroad puts registered capital into the company, it lands here in foreign currency and converts to yuan as the company needs it, with the bank checking the purpose of each conversion.
- The foreign currency account (外币账户) is for trade – receiving payment from foreign customers and paying foreign suppliers in foreign currency such as dollars or euros. It sits separate from the capital account, and the foreign-exchange authority watches both.
Most trading companies end up with a basic account and a foreign currency account, plus a general account or two if they want to keep flows apart. The capital account matters when you bring investment in, which I come back to lower down.
What it takes to open one
Opening starts with the documents: business license, company seals, the legal representative’s passport and China visa, articles of association, and a lease for your registered address. A capital account needs the foreign-exchange registration certificate on top.
Before any of it, the bank screens the company, and this is the step entrepreneurs underestimate. A Chinese bank can refuse a foreign-owned company outright, and which way it goes often comes down to how the case is presented. We pre-screen a profile with two or three banks before anyone files a formal application, because a rejection on file is much harder to recover from than a quiet “not yet”.
Since 2023 the legal representative has to appear at the branch in person, with a face scan linked to the passport. There is no proxy and no remote opening. If your legal rep is a foreigner, they have to fly to China for this, usually to the city where the company is registered, so plan for that before you promise anyone a date. The bank also sends someone to your registered address to confirm the company exists and matches the license. With a virtual office, the provider has to be there to show the arrangement is real.
Then comes the review itself: your business scope, how much money you expect to move and where it comes from and goes, who the shareholders are, and what the company will be doing day to day. For a foreign-owned company this digs deeper than it would for a local one. Count on roughly ten to twenty business days from filing to a working set of accounts, with the capital account coming online last, after the basic one.
One detail that catches people out later: when a foreign company opens its first account, the bank registers a Special Institution Code (特殊机构代码) for it, and that document only arrives a couple of months afterwards. You need it to open any further accounts, so keep it somewhere safe.
Why banking, not registration, is the bottleneck
Chinese banks sort countries by risk internally, the way banks do everywhere. If your passport sits in a higher-risk category – and a lot of the entrepreneurs I work with carry exactly that kind of passport, across the Gulf, Central Asia, Africa and the CIS – you meet several obstacles at once:
- Extended KYC – more documents, longer review, more questions about the people behind the company.
- Higher rejection rates – some branches simply will not open an account for certain nationalities, whatever the business looks like.
- Name-match risk – banks screen shareholders against sanctions lists, and a common Arabic or Persian name, or one that resembles a listed entity, can trigger a manual review even when the person is clean.
- Branch-level discretion – policy varies not just between banks but between branches of the same bank. A branch that turned away one company will open for a similar one across town, and the reverse happens just as often.
This is why the order matters so much. Most people register the company first and treat the account as a formality at the end. With a difficult passport it works the other way round. Registering the company is routine. The account is where it gets hard, so find out whether a bank will have you before you spend money on an entity that may not be able to bank.
Most of our China work is exactly this. We read a profile the way a bank’s compliance desk will read it. Then we take it to the two or three banks most likely to accept that profile, and prepare the legal rep for the branch interview, so the questions on the day are not a surprise.
Big banks or small banks
The big state banks – Bank of China, ICBC, China Construction Bank, China Merchants Bank – are slower to open an account, and their online systems feel dated. But their compliance teams know what they are doing, and once you are in, the relationship tends to be stable.
Smaller and regional banks are often easier to get into, and then they change policy without much warning. An account that worked for two months can quietly stop accepting a certain kind of payment, with no formal notice. So if you can open with a major bank, take it, even if it takes longer. Where you can, keep more than one account active and spread your transactions, so a single bank’s policy change does not freeze your operations. Should one freeze anyway, a blocked account is its own problem to work through.
You may also hear, in some founder communities, about small sanctioned banks in China that will open for almost anyone. Skip them. They cut you off from dollars and euros and from the wider banking system, the money tends to get stuck, and they cannot support a business that wants to grow internationally.
How money moves: China’s currency controls
Once the accounts are open, the next thing to understand is that money does not cross China’s border freely. The foreign-exchange authority, SAFE, sits behind every cross-border payment, and the bank will not send or convert money until the paperwork is complete.
Every cross-border payment has to be explained with documents – the contract, invoice, customs declaration, and a tax clearance where it applies. Trade payments on the current account are the routine case and clear with the right file behind them. Moving capital is a different matter – an investment coming in, or profit heading back out, needs SAFE approval and a good deal more paperwork.
Two things tend to surprise people. Outgoing transfers are harder than incoming ones, and paying a foreign provider for services is the hardest of all – small companies are often refused outright. And you cannot freely convert a large amount of yuan into foreign currency; each conversion needs a stated purpose, and SAFE watches the pattern. Once a year it reviews the company’s foreign-exchange activity, and a company it downgrades loses much of its room to move money at all.
This is why so many companies that trade with China keep a Hong Kong company alongside the Chinese one, and use it to pay overseas suppliers and contractors when the same payment from inside China would stall. A business whose model depends on paying abroad should plan for Hong Kong from the start. If the problem is that money is already stuck on the way out, that is more urgent, and moving profit out of China specifically is its own subject, which I cover in how to transfer profits from China legally.
Getting money in: registered capital and FDI
Bringing money into China has a designated channel, and it is worth understanding, because founders often reach for a messier one first.
Registered capital is the amount the shareholders commit to invest in the company over time. There is no legal minimum any more, but banks and partners read the number as a signal of how serious you are, and the figure varies by what the company does:
- A consulting or service company: usually 100,000 to 300,000 RMB.
- A trading company: usually 300,000 to 1,000,000 RMB.
- Manufacturing: 1,000,000 RMB and up, with some regulated industries setting higher floors of their own.
You do not pay it all on day one. You commit to contributing it within five years, and that deadline is now enforced. Miss it and the company can land on the abnormal-operations list, which freezes its dealings with banks and the government. So set the figure to what you can genuinely fund in that window. A number chosen only to look impressive becomes a liability when the clock runs out.
When you do bring capital in, it goes through FDI – foreign direct investment – registered with SAFE, into the capital account. The injection itself is not taxed, because it is treated as investment rather than revenue. For owners from higher-scrutiny countries, FDI approval can take longer, so most companies hold off on the formal injection until they are ready to scale.
In the meantime, the usual bridge for working capital is a director’s loan: the legal rep or a shareholder lends money to the company from a personal account, recorded as a loan and repaid once revenue comes in. It is an ordinary, accepted entry in China, and it keeps the company running before the capital injection is done.
Online banking is its own learning curve
Chinese corporate online banking works, but it is not what you are used to. Each authorised person gets a physical USB token – a U-Key – and larger transfers need two of them: one person to create the payment, another to approve it. Most banks still run their corporate portals on Windows, and the Chinese-language interface is more capable than the English one. The mobile apps only let you check balances; the payments happen on the desktop portal.
None of this is a dealbreaker, but it means someone on your side has to read Chinese and be comfortable with the software. Budget for that person the way you budget for an accountant. And if you sell to customers inside China, most of them will pay you through the country’s mobile-payment apps by QR code, which you switch on once the bank account is live.
When you do not need a Chinese account at all
Here is the part most guides leave out, because it argues against opening anything. A lot of companies that buy from China do not need a Chinese bank account, or a Chinese company, at all.
For most international trade involving China, a Hong Kong company does the job. It buys from Chinese suppliers as a foreign customer and banks internationally without the currency controls, at a low tax rate. A Chinese company starts to earn its place at scale – roughly two million dollars a month in trade turnover is the line where the cost of real Chinese substance (an office, local staff, the VAT cycle) begins to pay for itself. Below that, the overhead usually outweighs the benefit.
China wins when you genuinely operate inside it – when you have to issue fapiao and run the VAT cycle, when you employ people locally under Chinese contracts, when your Chinese counterparties will not pay an offshore account, or when your volume is simply large enough to carry the overhead. Where that is your business, the banking in this guide is part of the cost of doing it properly. Otherwise, the leaner path is a Hong Kong company. The Hong Kong vs China guide walks through that choice, and the banking side sits in banking in Hong Kong and Hong Kong banking compliance.
Common questions
The basic account comes first – it runs in yuan, handles day-to-day operations like salaries and tax, and a company can hold only one. A foreign currency account is added for trade, to receive and pay in dollars or euros. A general account is an optional second yuan account for keeping flows apart. A capital account is opened separately when you bring foreign investment into the company.
Chinese banks sort countries by risk, and a higher-risk passport meets extended KYC, higher rejection rates, sanctions-list name-matching, and policy that changes from one branch to the next. A bank can refuse a foreign-owned company outright, which makes the account the real gate. It is worth finding out whether a bank will have you before you register anything.
Yes. Since 2023 the legal representative has to appear at the branch in person, with a face scan linked to the passport. There is no proxy and no remote opening. If your legal rep is a foreigner, they have to travel to China, usually to the city where the company is registered, so build that trip into your timeline before you commit to a date.
Roughly ten to twenty business days from filing to a working set of accounts, with the capital account coming online last. That clock only starts once the bank has accepted the case, so the pre-screening before it – presenting the profile to the right banks – is what really decides how smooth the process is.
No. China runs strict foreign-exchange controls through SAFE, and every cross-border payment has to be backed by paperwork such as the contract and the customs declaration behind the goods. Outgoing transfers are harder than incoming ones, paying a foreign provider for services is the hardest of all, and you cannot freely convert large amounts of yuan without a stated purpose. This is why many China traders keep a Hong Kong company to handle overseas payments.
Often not. Most international trade with China can run through a Hong Kong company that buys as a foreign customer and banks without the currency controls. A Chinese account earns its place when you operate inside China – issuing fapiao, running the VAT cycle, employing local staff, or dealing with counterparties who will not pay offshore – or once your volume is large enough to carry the overhead, around two million dollars a month in turnover.
Need help with this?
If you are setting up in China and the banking is the part that worries you, that is the right instinct – it is the part that stops most people. We handle the China setup for entrepreneurs expanding into China, from the company itself through to a working bank account. Tell me about your company and where its owners are from. We will work out whether a Chinese account is realistic for your profile and which banks to approach, or whether you are better off banking the business from Hong Kong instead.