Doing Business in China For Dummies®

Opening All the Necessary Accounts

After choosing a bank, you’re ready to set up your accounts. Most foreign-invested enterprises (FIEs) open from three to five accounts — one RMB account and two to four for dealing with transactions that involve exchanging foreign currency. Read on.

Working with the people’s currency: Your RMB account

The RMB account is for paying RMB-denominated expenses. These expenses usually include your PRC employees’ salaries, overhead, and payments to domestic suppliers. You also deposit your RMB revenue into this account. Most smaller businesses don’t need more than one RMB account.

Switching things up: Accounts for foreign exchange

In addition to an RMB account for RMB transactions, you need to open several accounts in order to navigate the RMB exchange controls (which we discuss in the earlier section “Introducing China’s Currency: The Tricky RMB”). You need separate foreign exchange (forex) accounts for all remittances, or foreign currency payments sending money into or out of China.

The body that enforces China’s forex laws and regulations is the State Administration of Foreign Exchange (SAFE). Regulating these types of forex accounts and remittances is one of its primary jobs. You first need SAFE approval to open each forex account — your bank should be able to walk you through the SAFE approval process.

When SAFE approves opening a forex account, it specifies the scope of the account (the types of transactions that the account may be used for). ...