Offshore account in China

Even though the words “China” and “offshore” seldom pop up in the same sentence, offshore accounts in China exist, are available for use and are not too difficult to open. In this article, I offer the explanation of the entire procedure for opening an offshore account in the PRC.

Let’s first of all get to grips with the terms. Offshore is not quite an official concept, it is rather jargon. But if we set aside the issues of taxation and reporting for received/sent funds, then an offshore account is an NRA account, or a Non-resident account. A bank account opened for a company or individual who is not a resident of this jurisdiction.

What is it for?

It is difficult to give an unequivocal answer to this question. But we can use an old rule that came from Unix – if you do not know what it is and what it is for, you do not need it.

Let’s say that you know why you need it and are ready to proceed with the application. There are no special requirements for the company intending to open this account:

1. it must be a company legally registered in any jurisdiction
2. the company must conduct (or intend to conduct) business in the PRC and be able to confirm this
3. the company must have a workplace in the PRC for doing business (or be able to confirm its intentions to acquire one)

There are no more requirements. The details will be considered later in the article. But first of all, you need to choose a bank. All banks open such accounts, but I do not recommend contacting the “Big Four” banks (ICBC, CCB, ABC, and BOC) for the sake of maintaining self-esteem. When we contacted ICBC and indicated the approximate monthly turnover in the questionnaire, what we were told was “sorry, but we do not work with micro-enterprises”. Well, at the end of the day, we saw that coming – when we had tried to issue to our employees the bank’s 公务卡, for example, we had been told pretty much the same thing, that time according to the criterion of the number of employees.

So choose a bank that is not so much upmarket. We chose China Citic Bank, which is also a fairly reputable bank, but without exaggerated requirements and quite favourable.

And immediately the first piece of advice – do not go to the bank from the street. In most cases, there will be ordinary clerks who have not even heard of such accounts and would prefer to say the favourite Chinese 办不了 (No way). I advise you to straightaway seek something like “the international department of a particular bank” and communicate with the manager directly.

After you have contacted the manager and explained the basic situation to them, a normal dialogue will begin. At this stage, the main thing is to provide convincing evidence that you need an NRA account. Everything is too individual here and depends on your circumstances. But in general, no one is going to pick holes.

The next stage is preliminary submission of documents. You should be sent a large list of documents that you need to fill out and send to the bank without signing or stamping – at this stage it is not necessary. In addition to basic documents – information about a company, a document on company registration, articles of association, etc. (of course, all these documents must be translated into Chinese), you will be asked to provide:

1. contracts with Chinese partners (or written intentions to conclude such contracts)
2. contracts with foreign partners (or written intentions to conclude such contracts)
3. a document confirming the existence of an office address in China. It doesn’t have to be a registration address, it doesn’t need to be registered with government agencies, it’s just evidence that the company is not going to do business on a park bench. In our case, a simple 转租 (sublease of a part of an office) contract was enough for them
4. a questionnaire in which you will be asked to indicate the planned turnover, information about the background of the company (if any), the planned methods of activity and a lot of other information
5. well, everything else according to the requirements of the bank

The next stage is a check by the bank’s security service. Those companies whom you indicated as partners will be called and visited, and the place you indicated as 办公地点 will be called and visited too. Accordingly, it’s best to warn everyone in advance. It is also highly desirable to be able to clearly show what you are doing – photos of containers at shipment, photos of factories and assembly shops, video of goods acceptance, video of finished products and installed equipment – all this will play out in your favour and convince the bank that you actually are what you claim to be.

The next stage is that the foreign company must obtain its number in the foreign exchange control. It’s something like a business license (营业执照) number, but for foreign companies.

When all these stages are passed and the bank does not have any suspicions or additional questions, you will be invited to actually submit documents to the bank branch. In fact, you will need to come to them and put stamps/signatures on all those documents that you sent them earlier.

Naturally, the case will not do without cute Chinese jokes that will baffle the entire security service of the bank.

But eventually, everything will be settled and in the end you will be given a token for Internet banking and account details with the letters NRA in the account number.

After about 1-2 weeks, you will receive a开户许可证 in classical format – a permission to open a basic account and then you may consider opening other accounts in other banks.

That’s all. Surely, you can haggle yourself hoarse about whether an NRA account is completely offshore, discuss the differences between offshore yuan and onshore yuan, about the requirements for transactions and reporting. But again, I will repeat what I said at the very beginning – if you do not know this, then you do not need it.