I have been working for a client as regards setting up a branch in Shenzhen and successfully obtained the business license on a single day. If you have handled such matter in other city of China, you will know how amazing it is, for in other cities, the period is always weeks. I really appreciate “speed of Shenzhen” and no wonder it is so developed and attractive for investment.
However, this is not what this article really intends to indicate. Getting business license is only the first step of setting up a branch, then you still need to make chops, open a bank account, do social security registration and handle tax issues. Among all these matters, opening a bank a account is the most important and most time-consuming. And now, things become more complicated because the central bank made new rules to tighten management and control over company’s bank account.
According to my legal research and consultation with staff members of several banks, there are two main changes in the procedure of opening a bank account for a company or its branch.
1. After submitting an application for an account, the bank will designate a client manager to go to the registered address of the company to examine and verify whether the company is real and is in operation, and the client manager shall do conduct due diligence and issue a report on the situation of the company. Only if the company pass the examination, formal procedure for opening a bank account will start.
2. Legal representative of the company or person in charge of a branch must be present at the bank. This new rule will really give rise to inconvenience and difficulty for some companies, for their legal representative or person in charge are foreigners and always are abroad. There is only one way to avoid the execution of this rule. If the company already has a familiar client manager in the bank, and the client manager could guarantee the authenticity of the identity certificate of the legal representative, the legal representative won’t be required to be present.
It becomes increasingly easier to set up a company or a branch in China, however, in some special areas, things go to the contrary. We must keep an eye on relevant laws and policies and only by that can we provide top service for the client.