How to Open a Bank Account in China

Why have Chinese banks tightened accountability requirements?

Banks in China are subject to high scrutiny from the People’s Bank of China (PBOC), resulting in the emphasis now given to the KYC (know your client) policy. Under PBOC direction, Chinese banks have also become stricter about opening bank accounts since April 2020, especially for newly established companies – no matter whether it is a domestic company or a foreign-invested company.

Due to the COVID-19 pandemic, there has been a surge in activities that made banks in China prioritize further internal compliance control. During the outbreak, some organizations and individuals took advantage of the crisis environment to proceed with illegal activities. These activities included gathering personal information from less legally aware individuals (students, elderly people) and opening a large number of corporate accounts under their names. This led to a situation where banks faced the consequences of illegal transactions and money laundering.Facing increased pressure from the local and country-wide authorities, banks were forced to update their process of opening corporate and personal banking accounts across China.

What are the latest requirements for opening a bank account in China?

To validate the “real business” of the applicant, banks have now implemented an on-site visit procedure.
This procedure includes a bank officer visiting the physical location (the office) of the applicants to verify that they have a physical location and staff. The photo of the location with the company nameplate and a business license will be taken for the bank’s internal compliance purposes.
Based on this situation, the bank will require the individual who has submitted their passport as verification documentation on behalf of the company (the legal representative, that is) to be present at the time of the account opening.
Foreign investment is very welcome and needed in China, and thus some banks are advancing and improving their compliance and control policies while also complying with the official requirements established by the government.
Some of the bank branches will allow the specific information to be provided in the scripted video made by the individual who is affected by the travel ban and cannot physically come to China to do the in-person bank account opening. This video is then validated through the bank controlling department. After the video is accepted by the compliance team, the “physical office” location visit is performed.
The person responsible for the bank account opening will visit the bank with the package of the required documents. The real-time authentication call is then made to the individual to confirm the bank account opening.
As complicated as it sounds, banks are being as lenient as the regulations will allow – to help their new clients.