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Friday, September 21, 2018

Counselling Aimed at Opening Bank Current Accounts

In China, more than elsewhere, the relationship between businesses and banks has always been very complex because of many contradictions of this Country: bureaucracy, complexity in the interpretation of laws and regulations, the vastness of the territory, cultural barriers. The growth of the Country in the last two decades has been impressive and steady as well as its amazing ability and speed of adjustment of the economy to the changing market conditions and to the domestic and international developments. All sectors have continuously recorded sudden changes and among all, the banking system has grown and improved greatly in recent years: from the absolute domination of the Central Bank of China - until the 1980s to a reorganized banking system including nowadays besides the big four state-owned banks, medium-sized commercial ones and foreign banks (branches and representatives). If Chinese banks are efficient, the foreign ones are now better positioned in the Chinese market with the ability to provide many services not only in foreign currency but also in the national one.

From the outset it is important to note that in China is not permitted by Law the opening of current accounts to those who are not resident in the country. It is a different case in the case when a Chinese company is established.

Bright Business Consulting LLP with appropriate “Warranty & Assistance” provides information, directions to the physical and legal entities interested in opening a "bank account" in China, it is for business purposes and for private purposes.

The prerequisites as well as the conditions for the opening of a bank account in China are very specific. The same opening is subject to a complex technical/bureaucratic procedure when it becomes necessary presenting several application modules, together with your domicile and in some cases, also the amount of your income is required. To this purpose, it is expressly suggested to make use of professionals who can support the procedures and specific requirements for "Warranty & Assistance"  during the process of accompaniment.

Bright Business Consulting LLP after analysing the case can realize which different types of accounts available in the system of banking services in China are the most appropriate solutions for the specific needs.

There are "Bank Accounts" that can be used for daily transfers, which give the right to apply for a credit card. It is important to point out that credit cards are having a good diffusion. A significant part of the domestic payments is via bank transfer or cash. In China there are only traditional payment instruments; those electronic instruments popular in European Countries (such as Ri.Ba., MAV, IEF, LCR, etc.) are not available.

The local currency (RMB) is not convertible and as a result almost all international payments to and from the “Country” are settled in “foreign” currency (the U.S. dollar is still more widely used than the euro). It is important to note that from the beginning of 2010 there was an "experimental" opening to the use of RMB in international payments: given certain conditions it is possible for some Chinese importers and exporters settle/receive payments in RMB with foreign companies, when commercial transactions occur.

It is confirmed that only companies with licensed import/export can make/receive international payments upon presentation of appropriate documentation and maintain, within certain limits, foreign currency accounts fuelled by export earnings. The companies based on foreign capital operating in the Country instead may obtain more easily hard currency.

For these specific requirements, but not less for the other ones, the process of “Due Diligence” to be carried out is to be considered a professional activity that must be carried out carefully in order to warrant and assist the individual or entity during the necessary procedure for accompaniment to achieve the operation of the account.

As the rules regarding currency change frequently, Bright Business Consulting LLP is the appropriate partner to determine through a careful analysis which mode to implement and what type of "Bank Account" you can apply. In conclusion, remains crucial to point put that the choice of the bank is crucial, given that not all banks offer the same products.

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