UK businesses need to access China’s consumer market and China’s financial industry needs British wealth management expertise. Our new series examines mutual investments from both the British and Chinese perspectives, with Part Three concerned with bank accounts.
Despite the political rhetoric, British investment interest in China remains strong, with corporate needs to access a high growth consumer market of what is expected to be a 1 billion middle-class consumer base by 2030 – an overriding sentiment – as European economies look set for a possible recession. Likewise, the UK is an attractive market for Chinese businesses looking to partner with British financial services capabilities, with these both important as Beijing and Hong Kong look to develop their various cross-border wealth connect schemes, offering international wealth management access to the mainland’s estimated US$3 trillion in privately held assets.
This series concentrates on the UK-China business angle. Every week, we will add a new video that answers some of the most frequently asked questions about setting up a company in China and the UK. Each video answers the same issues from both the China and UK perspectives.
Key insights are provided by, Maria Kotova, Head of UK Business Development and China market entry director at Dezan Shira & Associates, and Lisa Gui, Assistant Manager at HW Fisher.
If you have any questions about doing business in China or the UK, reach us at UK.Ireland@dezshira.com
Episode 3: How to open a bank account for a new company in China and the UK?
The process of becoming a new client of a bank can give off the impression that it will not be simple for foreign investors. This is due to the People’s Bank of China’s (PBOC) intense scrutiny of Chinese banks, which has led to the focus placed on the KYC (know your client) policy.
Chinese banks have become stricter about opening bank accounts, especially for newly established companies. Upon obtaining a business license in China, the newly established foreign-invested enterprise (FIE) must choose a specific bank to open the bank account, without which the entity will not be able to carry out its daily operation.
In China, FIEs must open at least two bank accounts: an RMB basic account and a foreign currency capital contribution account. Because of an existing business relationship, foreign investors in China frequently prefer to open an account with an international bank. However, opening accounts with a Chinese bank has a number of advantages.
There is no legal requirement in the UK for foreign investors to have a business bank account. You do not have to live in the UK to open a business bank account, but it is difficult for non-UK residents to open a bank account in the UK due to strict anti-money laundering (AML) regulations that require those applying for bank accounts to verify their identities.
10 Things Businesses Need to Know When Setting Up a Company in China and the UK: Episode 2
10 Things Businesses Need to Know When Setting Up a Company in China and the UK: Episode 1
China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done so since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at firstname.lastname@example.org.
Dezan Shira & Associates has offices in Vietnam, Indonesia, Singapore, United States, Germany, Italy, India, and Russia, in addition to our trade research facilities along the Belt & Road Initiative. We also have partner firms assisting foreign investors in The Philippines, Malaysia, Thailand, Bangladesh.