Why Open a Bank Account in China?

For British citizens relocating to China or engaging in business there, a local bank account is essential for seamless financial management. China’s cashless economy, dominated by mobile payment platforms like WeChat Pay and Alipay, relies heavily on local bank accounts for transactions, from paying bills to online shopping on platforms like Taobao. In 2025, China’s e-commerce market is valued at US$2.1 trillion, with 70% of retail sales occurring online, making a bank account critical for daily life. A local account also simplifies receiving salaries, paying rent, and managing cross-border payments in Renminbi (RMB). As Kristina Koehler-Coluccia, Head of Business Advisory at Woodburn Accountants & Advisors, notes, “A local bank account greatly simplifies life in China, offering access to services that foreign cards often can’t provide”.

Step-by-Step Guide to Opening a Bank Account

Opening a bank account in China as a foreigner involves specific requirements and procedures. Below is a clear, step-by-step guide tailored for British citizens, based on the latest 2025 regulations and practices.

Step 1: Confirm Eligibility

Foreigners, including British citizens, can open bank accounts in China, but eligibility depends on visa status. You must hold a valid visa with at least six months’ validity, such as a Z work visa, X student visa, or L long-term private affairs visa. Tourist visas (L visas for short stays) are typically not accepted. You must also be physically present in Mainland China, as remote account opening is rare, except through international banks like HSBC in specific cases.

Step 2: Choose a Bank

China’s banking sector includes major state-owned banks, commercial banks, and international institutions. For British citizens, the “Big Five” banks, Bank of China (BOC), Industrial and Commercial Bank of China (ICBC), China Construction Bank (CCB), Agricultural Bank of China (ABC), and Bank of Communications (BOCOM), are popular due to their extensive branch networks and English-language services in major cities like Beijing and Shanghai. International banks like HSBC, Citibank, and Standard Chartered offer familiarity and multi-currency accounts but may have stricter requirements, such as a minimum balance of £15,000 for HSBC Advance accounts.

Consider factors like branch accessibility, digital banking capabilities, and fees. For example, ICBC’s WeChat Banking service allows account management via WeChat, while BOC offers a Current All-In-One Account for multi-currency transactions.

Step 3: Gather Required Documents

Chinese banks enforce strict “Know Your Customer” regulations, requiring a comprehensive set of documents. Prepare the following, ensuring originals and photocopies are available:

• Valid Passport: Your primary identification document, with the name matching exactly across all documents to avoid delays.
• Chinese Visa or Residence Permit: A valid visa or temporary/permanent residence permit, with at least six months’ validity.
• Proof of Address: A rental agreement, utility bill, or Temporary Accommodation Registration Form from the local Public Security Bureau.
• Chinese Mobile Phone Number: A local number registered in your name for verification and communication.
• Proof of Employment or Study (if applicable): An employment contract, letter from your employer, or admission letter from a university for students.
• Police Clearance Form (sometimes required): A registration form from the local police station, particularly for new arrivals.

Some banks may request additional documents, such as a Taxpayer Identification Number (e.g., National Insurance Number for UK citizens) for cross-border transactions.

Step 4: Visit a Bank Branch

In-person visits are mandatory for most Chinese banks, as online account opening is limited. Choose a branch in a major city, where staff are more likely to speak English and be experienced with foreign clients. Schedule an appointment if possible, and bring a Chinese-speaking friend or interpreter if you’re not fluent, as application forms may be in Chinese.

At the branch, approach the information desk and tell them you would like to open a bank account. Staff will provide an application form and guide you through the process. Expect identity verification and document checks, which may take over an hour.

Step 5: Select an Account Type

Choose between a savings account (for daily expenses and electronic payments) or a multi-currency account (for international transactions). Debit cards are standard, linked to mobile payment platforms, while credit cards are less common for foreigners. Most savings accounts charge an annual fee of around 10 RMB (approximately £1.10), automatically deducted from the account.

For business owners, corporate accounts require additional documentation, such as a Business Licence and proof of state approval for foreign-invested enterprises. These accounts face stricter compliance checks and may take weeks to process.

Step 6: Make an Initial Deposit and Pay Fees

Most banks require an initial deposit, typically 40–50 RMB (£4–£5), though some, like CCB, may require higher balances (and up to 50,000 RMB for certain accounts). A registration fee of 40–50 RMB is also standard. Carry extra cash (around 100 RMB) to cover unexpected costs.

Step 7: Receive Your Bank Card and Set Up Mobile Payments

Once approved, you’ll receive a debit card and account details, typically within one to two weeks, though some banks issue cards on the spot. Link your account to WeChat Pay or Alipay for seamless transactions, as cash is rarely used in urban China. Activate online banking or mobile apps for account management. Be cautious with security, using two-factor authentication to protect against fraud.

Practical Tips for Success

• Visit Major Cities: Branches in Beijing, Shanghai, or Guangzhou are more accustomed to foreign clients and often have English-speaking staff.
• Check Visa Validity: Ensure your visa has at least six months’ validity to avoid rejection.
• Be Patient: Some branches may lack experience with foreigners, requiring multiple visits or additional documents.
• Explore Alternatives: If opening a local account is challenging, consider a Wise or Revolut account for low-fee, multi-currency transactions, manageable from the UK before your move.
• Understand Restrictions: Some banks limit international transfers or currency conversions, especially during government restrictions on foreign currency reserves.

The post How to Set Up a Bank Account in China: A Step-by-Step Guide for Foreign Citizens appeared first on Focus - China Britain Business Council.

Next year’s increased costs of employing foreign workers comes as a result of changes to the Individual Income Tax (IIT) system planned for 2022, in line with amendments to China’s tax code that were first proposed in 2018. These changes will see certain allowances – such as the cost of rent, school fees and language training expenses – suddenly become taxable for companies that employ foreign employees, significantly increasing the human resource costs for companies seeking to post expatriate staff to China.

The Chinese authorities are replacing the previous IIT policy with a new system of special tax deductions, available to both foreign and non-foreign employees alike, which will be applied on a more equal basis but at much lower levels.

The impact of the tax changes will be significant and could double the amount on which a company is taxed if it wants to post an expatriate worker to China (see illustration below).

China proposed reforms to its IIT system at the beginning of 2018 when the government announced draft amendments to China’s Tax Code. As one of these amendments, the IIT Law was passed by the Standing Committee of the People’s Congress in June 2018, before coming into force in January 2019. The IIT Law was introduced with a three-year transition period to help companies and taxpayers move from the old IIT system to the new, but that transition period comes to an end in 2022. The amendments also included new rules modifying how China determines who is a tax resident, income tax brackets, and the ways and means China can tax people on their global income.

The following example shows how these changes to the IIT system will increase the amount on which a company is taxed were it to employ a foreign expert with an accompanying partner and two children in the highest IIT tax category (45%):

As the chart demonstrates, the amount the company will be taxed significantly increases under the new system as the ‘allowances’ have become taxable, whereas under the previous system they could be removed from the company’s tax bill. An assessment by the German Chamber of Commerce in China has concluded that this change to the IIT policy will cause the average mid-sized German company operating in China to have to start paying 30% more in tax if it continues to compensate its employees for housing and education, as many are currently contractually obliged to.

On the reverse, if the additional costs were to start being borne by the employee, the total reduction of the monthly net salary would be around 11%, according to the German Chamber’s study. But depending on the personal situation of the employee, this could increase to as much as 50% if benefits constitute a larger part of their remuneration.

Comparing the old IIT system with the new

Salary Deductions: Workers in China are entitled to deduct a portion of their salary from the income on which they pay tax. Under the previous IIT system, resident individuals could deduct 3,400 RMB (£375) per month from their taxable salary, while non-resident individuals could deduct 4,800 RMB (£530). These have been brought in line so that all individuals will be entitled to deduct 5,000 RMB (£550) from their income before tax.

Six-year Rule: Foreigners will no longer have to leave the country every 5 years to avoid having to pay tax in China based on their global income. This has been increased to every 6 years. This policy should benefit consultants who base themselves equally between China and elsewhere and draw a salary in both.

Special Additional Deductions for Specific Expenditures: Certain ‘allowances’ that foreigners were able to claim before calculating how much tax they owed are being phased out:

Whereas under the Old IIT System, foreign employees who are China tax residents could claim a tax exemption; under the New IIT System they will only be able to claim itemised deductions, meaning that these costs will be reflected in their final tax bill. These deductions are worth far less than the previous exemption. For housing rent, for example, under the previous IIT system, expats could claim the value of up to one-third of their salary in ‘Housing Allowance.’ Under the incoming IIT system, this will be changed to a 1,500 RMB per month ‘Housing Rent’ deduction from their final tax bill.

Anticipated impact:

Over the last few years, the number of foreigners working for UK companies in China was already declining. Foreign businesses in China are now expressing concerns about the impact of the new IIT system.

A recent survey carried out by the European Chamber of Commerce China on the cancellation of the tax allowances found that the majority of respondents expect to cut their foreign employed staff by 25% or more. In the same survey, 42% of respondents said that they were considering shifting investment out of China as a result.

UK companies in the advanced manufacturing and hospitality sectors are generally more inclined than those in other sectors to have foreign employees on their books. Companies in these sectors also happen to be amongst the UK’s largest trading companies with China. As a result, some of the UK’s largest exporters to China are among those most likely to be affected by the looming tax system changes.

The upcoming changes to the IIT system will likely also disincentivise multinational companies from putting foreign workers in leadership positions, as it will become significantly cheaper for a company to appoint a Chinese national in their place: Chinese nationals tend not to need financial support towards accommodation and schooling for any children they might have.

Businesses are already reporting considering relocating their Asian regional headquarters to other markets, such as Singapore, which offers more preferential conditions to foreign investors and employers

The cancellation of non-taxable allowances for companies that employ foreign employees will significantly raise HR costs for companies, deter expatriate assignments, and negatively impact foreign investment in China from 2022 onwards. CBBC plans to make a representation to China’s Ministry of Commerce on the issue.

The post Why hiring a foreigner in China may soon be too expensive appeared first on Focus - China Britain Business Council.