Ever thought what it would be like to set up a bank account in a foreign country? I know you probably haven’t but humor me because this is definitely a learning experience. 1st of all I’m not talking about a personal account, because that was simple; show your passport and make a deposit and you’re in. In fact, your account can handle both $’s and RMB (Chinese currency) funds. The only fault in a personal account is that you can’t have a joint account. Then again, maybe that’s the smart way to do things, no offense to all the lovely wives out there!
This post is not your typical blog post. It's about the bureaucracy of establishing a business account. Two weeks ago I started on a journey to create a business account and I finally succeeded yesterday and was able to actually transfer funds to pay some bills.
In the 1st week, I had to complete a mountain of paperwork with the help of one of my Chinese associates. Each document required my previously acquired business and personal “Chop” as authorization (reference previous post). Then there was a 3 day wait for the Bank of China (BOC) approval process. Once approved I returned to the BOC where I was immediately escorted to another branch of the BOC for account finalization. When I arrived at the branch I was taken to a smoke filled back room where I found several gentlemen dressed in shorts and t-shirts sitting around a table with a stack of forms requiring approval. As you can imagine this sight gave me a warm feeling of security for my funds. Two hours later the gentlemen finished with me and I was in business with a China bank account; so I thought. What I didn’t realize is that this process only opened my "$" account and that they now had to submit my application to the Peoples Bank of China for approval of an RMB account.
About three business days later I received notice that they had approved my application for a RMB account and I needed once again to return to the dark smoke filled room for finalization of my paperwork. This time I was there for less than 1 hour.
Throughout this ordeal I witnessed only one segment the Chinese banking system. All I can say is that it’s loaded with paperwork, stamps, authorizations, and a lot of waiting. However, I always thought despite the paperwork, somehow they knew exactly where all the money was at all times. Then again they probably know where I am all the time as well!
Once the accounts were set up I thought the next step, making a deposit, would be a snap. Ha, what I didn’t know is that you can’t transfer $’s from an individual's personal bank account into a business account. We would have to withdraw the dollars from the personal account and convert the funds in to RMB and deposit into the RMB business account. This presented a dilemma. You see, in China a person is limited to converting only $50K per year in to RMB and they track your exchange activity against your passport number. The dilemma is the individual's personal account my company wired the start up money to could not afford to have the large exchange amount against his passport because there was still 5 months left in the year. Fortunately, we had an employee who recently arrived in China with us and we used his passport to convert the funds for the deposit. By the way, an individual is limited to withdraw only $10K at one time.
With the deposit out of the way I was ready to make payments to some of the Chinese suppliers for furniture, computers, telephone system, etc,… Wrong again. When I went back to the bank later that afternoon and began the process of transferring funds to suppliers the bank teller stopped what she was doing and explained in Chinese that she had made a big mistake. This proclamation came after almost two hours of paperwork! She went on to explain that she didn’t notice that my account was just opened the day before. So what you say. Well in China once you are given the appropriate approvals, you have to wait 3 days before you can start using your business account. Silly me, why didn’t I know that! Remember, “This is China”. With that understood I returned the next morning to start all over with my 3 transfers. In order to transfer the funds I had to purchase one set of checks for transfers within Chengdu and another set of checks for transfers outside of the city. In addition, I have to purchase a password generator (560 RMB) that provides me with a password each time I issue a check. Things went well with the 1st two transfers but when it came to the 3rd, the teller notified me that I didn’t have enough funds to cover the check. Wonder how you say “bounced check” in Chinese? This now presented a new problem; how do I get another deposit in to my account quickly before my supplier repossesses my equipment?
Once again, an opportunity for a learning experience. Remember earlier I explained the limits in changing $’s into RMB. Well there’s an underground business that can help you with that. I haven’t figured out if it’s money laundering or just Capitalism? Anyhow, we went to the bank this morning to withdraw $’s form a personal account. But this time we immediately took the money to an individual that sits in the corner of the bank with a small suitcase full of RMB. The individual converted our $’s to RMB at a better rate than the bank. I was cautioned that you have to be very careful not to exchange your good ole U.S. $’s for worthless counterfeit RMB currency. So, what you do is find an individual that has a high standing in the bank so that the bank tellers actually place your bills into a machine that counts your bills to confirm the amount and scans for counterfeit paper. All of this is done inside the bank with the help of the tellers and the security guards. Wow, what a business.
One problem that surfaced when we made the conversion is transporting RMB currency. The largest bill is a 100 RMB note so, imagine the stack of bills you have after exchanging $10K; that amounts to 680 bills to make up 68,000 RMB! The bills barely fit into Kim’s purse, our only mode of concealed transport. In the future we will bring a backpack!
By the way, we have to do this again tomorrow morning until we have effectively transferred all of the start up money to the business account.
Despite all of the troubles, delays, inconveniences, and frustrations, the people of China were very helpful in my efforts to open a business account in China. They have to comply with the regulations here in this beautiful and intriguing country.
Remember, TIC!
This post is not your typical blog post. It's about the bureaucracy of establishing a business account. Two weeks ago I started on a journey to create a business account and I finally succeeded yesterday and was able to actually transfer funds to pay some bills.
In the 1st week, I had to complete a mountain of paperwork with the help of one of my Chinese associates. Each document required my previously acquired business and personal “Chop” as authorization (reference previous post). Then there was a 3 day wait for the Bank of China (BOC) approval process. Once approved I returned to the BOC where I was immediately escorted to another branch of the BOC for account finalization. When I arrived at the branch I was taken to a smoke filled back room where I found several gentlemen dressed in shorts and t-shirts sitting around a table with a stack of forms requiring approval. As you can imagine this sight gave me a warm feeling of security for my funds. Two hours later the gentlemen finished with me and I was in business with a China bank account; so I thought. What I didn’t realize is that this process only opened my "$" account and that they now had to submit my application to the Peoples Bank of China for approval of an RMB account.
About three business days later I received notice that they had approved my application for a RMB account and I needed once again to return to the dark smoke filled room for finalization of my paperwork. This time I was there for less than 1 hour.
Throughout this ordeal I witnessed only one segment the Chinese banking system. All I can say is that it’s loaded with paperwork, stamps, authorizations, and a lot of waiting. However, I always thought despite the paperwork, somehow they knew exactly where all the money was at all times. Then again they probably know where I am all the time as well!
Once the accounts were set up I thought the next step, making a deposit, would be a snap. Ha, what I didn’t know is that you can’t transfer $’s from an individual's personal bank account into a business account. We would have to withdraw the dollars from the personal account and convert the funds in to RMB and deposit into the RMB business account. This presented a dilemma. You see, in China a person is limited to converting only $50K per year in to RMB and they track your exchange activity against your passport number. The dilemma is the individual's personal account my company wired the start up money to could not afford to have the large exchange amount against his passport because there was still 5 months left in the year. Fortunately, we had an employee who recently arrived in China with us and we used his passport to convert the funds for the deposit. By the way, an individual is limited to withdraw only $10K at one time.
With the deposit out of the way I was ready to make payments to some of the Chinese suppliers for furniture, computers, telephone system, etc,… Wrong again. When I went back to the bank later that afternoon and began the process of transferring funds to suppliers the bank teller stopped what she was doing and explained in Chinese that she had made a big mistake. This proclamation came after almost two hours of paperwork! She went on to explain that she didn’t notice that my account was just opened the day before. So what you say. Well in China once you are given the appropriate approvals, you have to wait 3 days before you can start using your business account. Silly me, why didn’t I know that! Remember, “This is China”. With that understood I returned the next morning to start all over with my 3 transfers. In order to transfer the funds I had to purchase one set of checks for transfers within Chengdu and another set of checks for transfers outside of the city. In addition, I have to purchase a password generator (560 RMB) that provides me with a password each time I issue a check. Things went well with the 1st two transfers but when it came to the 3rd, the teller notified me that I didn’t have enough funds to cover the check. Wonder how you say “bounced check” in Chinese? This now presented a new problem; how do I get another deposit in to my account quickly before my supplier repossesses my equipment?
Once again, an opportunity for a learning experience. Remember earlier I explained the limits in changing $’s into RMB. Well there’s an underground business that can help you with that. I haven’t figured out if it’s money laundering or just Capitalism? Anyhow, we went to the bank this morning to withdraw $’s form a personal account. But this time we immediately took the money to an individual that sits in the corner of the bank with a small suitcase full of RMB. The individual converted our $’s to RMB at a better rate than the bank. I was cautioned that you have to be very careful not to exchange your good ole U.S. $’s for worthless counterfeit RMB currency. So, what you do is find an individual that has a high standing in the bank so that the bank tellers actually place your bills into a machine that counts your bills to confirm the amount and scans for counterfeit paper. All of this is done inside the bank with the help of the tellers and the security guards. Wow, what a business.
One problem that surfaced when we made the conversion is transporting RMB currency. The largest bill is a 100 RMB note so, imagine the stack of bills you have after exchanging $10K; that amounts to 680 bills to make up 68,000 RMB! The bills barely fit into Kim’s purse, our only mode of concealed transport. In the future we will bring a backpack!
By the way, we have to do this again tomorrow morning until we have effectively transferred all of the start up money to the business account.
Despite all of the troubles, delays, inconveniences, and frustrations, the people of China were very helpful in my efforts to open a business account in China. They have to comply with the regulations here in this beautiful and intriguing country.
Remember, TIC!
2 comments:
Lucky you are not in Mexico. You would actually have to walk outside of the bank to see the man on the corner willing to "exchange" your pesos.
I must admit... this blog was way over my head. I'm not sure I really understand everything you wrote. Sounds like a lot of running around and I know you'll be glad when that's all over.
Love ya!!
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