# China: Company, Banks, Payments, and Residency

> China for business: WFOE and regions, a bank map for foreign trade, CIPS payments and SAFE currency control, work-based residency, taxes, and the sanctions layer.

Author: Dana Berzeg — Attorney-at-law, Family Office (https://wiki.private.law/en/authors/berzegova)
Last modified: 2026-09-05T18:58:00.000Z
Canonical: https://wiki.private.law/en/china-hub
Topics: structures, banking, migration
Jurisdictions: china
Functional tags: chinese-banking, corporate-banking
Product tags: company, banking, tax-regime, relocation, compliance
Semantic tags: chinese-banking, corporate-banking, company, banking, tax-regime, relocation, compliance
Article type: hub

---

**Canonical article:** [Company in China: WFOE, SAFE, fapiao and a bank account →](https://wiki.private.law/en/company-china)

## Concept

Mainland China is the world's second-largest economy: in 2025 its GDP topped ¥140 trillion for the first time (¥140.19 trillion, +5%, about US$20 trillion). Yet the system here is self-contained at every level: the yuan and CIPS instead of dollar correspondents, Golden Tax and fapiao instead of conventional accounting, SAFE currency control instead of free capital movement. Foreign business enters under a "national treatment up to admission + negative list" model: the 2024 Negative List keeps 29 restricted positions, and the manufacturing sector is fully open.

Foreign direct investment inflows have declined for a third year running (MOFCOM tallied 2025 in January 2026), but the structure says more than the headline: high-tech industries hold about a third of the funds raised, and the number of new foreign-invested companies is growing — investors are coming in smaller amounts and selectively, while Beijing responds with targeted incentives, such as a tax credit for reinvesting dividends (2025–2028).

Our view: China is an operational jurisdiction, not a structuring one. People come here for the market, manufacturing, and supply chains; the holding company, capital, and personal status more often stay in Hong Kong or Singapore. [Hong Kong](https://wiki.private.law/en/hong-kong-hub) remains the default gateway: CNH liquidity, Stock Connect, and banking access without entering mainland compliance.

> 🍓 Three filters decide everything: admission under the Negative List, SAFE currency control, and the bank's internal compliance. A structure that clears all three on paper before filing saves months; a structure built "on luck" leaves a trail of rejections.

Section map: where to start and where the answer is.

| Reader's question | Page |
| --- | --- |
| How to register a company and what the first year costs | [Company in China: WFOE, SAFE, fapiao](https://wiki.private.law/en/company-china) |
| Which bank will open an account for my profile | [China banks for foreign trade](https://wiki.private.law/en/chinese-banks) |
| How to move a payment to China and back | [Payments to China](https://wiki.private.law/en/china-payments) |
| Why a bank turns back a payment or the goods | [Chinese bank restrictions](https://wiki.private.law/en/china-bank-restrictions) |
| How to get a work permit and residency | [Residency in China](https://wiki.private.law/en/china-residency) |
| Whether you can enter without a visa | [Visa-free entry and transit](https://wiki.private.law/en/china-visa-free-transit) |
| Where the holding above a Chinese business sits | [Hong Kong: companies, banks, status](https://wiki.private.law/en/hong-kong-hub) |
| Who inherits Chinese assets | [Intestate succession in China](https://wiki.private.law/en/china-intestate-succession) |

## The Russia angle: figures and limits

The Russia–China goods flow in 2025 — four reference figures.

| Flow | 2025 |
| --- | --- |
| Russia–China trade turnover | US$228.1 billion (−7% from the 2024 record) |
| China's imports from Russia | US$124.8 billion |
| Of which energy | US$78.7 billion (−17%) |
| China's exports to Russia | US$103.3 billion |

About 90% of settlements run in rubles and yuan, so all the practical mechanics come down to yuan routes and a given bank's willingness to process them.

The boundary is set by secondary sanctions: EO 14114 (December 2023) threatens any bank with being cut off from dollar correspondents for serving the Russian defense-industrial complex, and in July 2025 the EU listed two Chinese regional banks for the first time (Heihe and Suifenhe Rural Commercial). The planning takeaway: the Big Four are all but closed to the RU profile, the flow lives in regional banks and shifts quarterly — the route map and the sending-bank-to-Chinese-correspondent pairings are in the [payments hub](https://wiki.private.law/en/china-payments).

Goods are screened separately from money: banks check HS codes against the [EU sanctioned-goods list](https://wiki.private.law/en/goods-under-eu-sanctions) and their own stop-lists ([how this works](https://wiki.private.law/en/china-bank-restrictions)). Backup circuits outside China are kept configured in advance: [Collect & Pay in the AIFC](https://wiki.private.law/en/collect-pay-kazakhstan-route) as a Kazakhstan RUB/CNH route and [Freedom Bank](https://wiki.private.law/en/freedom-finance) for the personal circuit; the overall framework is in [Relocation from Russia](https://wiki.private.law/en/relocation-from-russia).

> ⚠️ There is no "permanent" route: corridors last months, and banks close intake without warning. For every material flow, keep at least two independent routes and a predictable documentary history.

## Company and presence

Forms of presence, in ascending order of obligations: **representative office** (no commercial activity: procurement, QC, market research — the route and pricing are in the [residency article](https://wiki.private.law/en/china-residency)), **WFOE** (100% foreign ownership, full access: fapiao, hiring, export VAT refunds), **joint venture** (when a Negative List industry requires a Chinese partner, or the partner brings licenses and distribution channels).

Key rules from the canonical [company-china](https://wiki.private.law/en/company-china):

- registered capital must be paid up within 5 years (Company Law 2024) — a "pretty" figure in the charter turns into a real obligation
- registration takes 15–20 business days, a working company with an account 45–60 business days, first-year budget €10,700–20,700
- an annual audit by a Chinese CPA firm is mandatory: the annual reconciliation 汇算清缴 by May 31, the SAMR report by June 30; Golden Tax IV reconciles fapiao, bank, and returns automatically, and a nationwide e-fapiao has been in force since December 2024
Choosing a region means choosing a bank, incentives, and the speed of government agencies:

| **Region** | **CIT** | **Profile** |
| --- | --- | --- |
| Shanghai | 25% (HNTE 15%) | trade, finance, consulting; the easiest banking for foreigners |
| Shenzhen | 25% (Qianhai/HNTE 15%) | electronics, hardware, a link to Hong Kong (40 minutes) |
| Hainan (FTP) | **15%** for encouraged industries | since 18.12.2025 — island-wide customs, 74% of tariff lines zeroed; substance is checked strictly |
| Hangzhou | 25% (HNTE 15%) | e-commerce (Alibaba ecosystem), customs models 9610/1210 |
| Chengdu | 25% (WDS **15%** until 2030) | manufacturing, back-office; rent and salaries −40–50% vs Shanghai; rail to Europe |
| Harbin | 25% (HNTE 15%) | trade with Russia and the CIS, a Russian-speaking environment, banks for RMB/RUB |

## Taxes: summary

| **Tax** | **Rate** | **Comment** |
| --- | --- | --- |
| CIT | 25% | on the worldwide income of a Chinese resident |
| CIT preferential | 15% | HNTE, Hainan FTP, Western Development, Qianhai (encouraged industries + substance) |
| CIT for small companies | ~5% effective | first ¥3M of profit, extended to 2027 |
| VAT | 13% / 9% / 6% | goods / transport / services; input credit only against correct fapiao |
| WHT on dividends | 10% (5% under a tax treaty) | RU–China: 5% for qualifying participation; a credit of up to 10% for reinvestment (2025–2028) |
| IIT | 3–45% | residency from 183 days; the six-year rule for worldwide income — in the [residency article](https://wiki.private.law/en/china-residency) |

Export VAT is refunded when the chain is clean: declaration, payment, contract, purchase fapiao, the correct goods code — this is one of the main economic arguments for a WFOE over procurement without your own legal entity in China.

## Banks

A corporate account at a Chinese bank runs on one fuel — the real Chinese economy: suppliers and buyers in China, settlements in yuan, trade finance. For a pure holding or transit with no China footprint it is weaker than a Hong Kong or Singapore account, and the bank sees this immediately. A guide by segment:

| **Segment** | **Banks** | **RU-UBO regime** | **Timeline / support budget** |
| --- | --- | --- | --- |
| Big Four | [BoC, ICBC, CCB, ABC](https://wiki.private.law/en/bank-of-china) | a working channel only at Bank of China, with residency | see profile / €7,000 (BoC) |
| Joint-stock | Everbright, Ping An, Huaxia | by arrangement, with residency | 15–35 business days / €2,500–8,000 |
| Regional | [Harbin](https://wiki.private.law/en/harbin-bank), [CZCB](https://wiki.private.law/en/czcb-zhejiang-chouzhou-commercial-bank), Dalian, [Langfang](https://wiki.private.law/en/langfang-bank) | from an active channel to refusal — depends on the bank | 15–40 business days / €1,250–8,000 |
| Hong Kong circuit | [BOCHK](https://wiki.private.law/en/bank-of-china-hong-kong), HSBC HK, digital banks | case-by-case review | the map is in the [Hong Kong hub](https://wiki.private.law/en/hong-kong-hub) |

The full map with niches, stop-criteria, and service codes — [China banks for foreign trade](https://wiki.private.law/en/chinese-banks). Working CZCB guides: [online banking login](https://wiki.private.law/en/czcb-online-banking-login), [payments](https://wiki.private.law/en/czcb-payments), statements, [currency exchange](https://wiki.private.law/en/czcb-currency-exchange).

The Hong Kong layer is covered bank by bank: [HSBC Hong Kong](https://wiki.private.law/en/hsbc-hong-kong), [Hang Seng Bank](https://wiki.private.law/en/hang-seng-bank), and [Bank of China (Hong Kong)](https://wiki.private.law/en/bank-of-china-hong-kong) — plus digital banks with a mainland link: [livi bank](https://wiki.private.law/en/livi-bank-hk) (transfers to mainland China), [Ant Bank HK](https://wiki.private.law/en/ant-bank-hk) (the Alipay ecosystem), [Fusion Bank](https://wiki.private.law/en/fusion-bank-hk) (WeChat Pay). When a bank is overkill, neobanks step in: [Airwallex](https://wiki.private.law/en/airwallex), [Wise Business](https://wiki.private.law/en/neobanks), [Statrys](https://wiki.private.law/en/statrys-hong-kong-payment-account), [Currenxie](https://wiki.private.law/en/currenxie-hong-kong-payment-account), [Payoneer](https://wiki.private.law/en/payoneer-marketplace-payment-account) — the class overview is in [Neobanks](https://wiki.private.law/en/neobanks).

### Personal banking and everyday payments

A personal account at a mainland bank is opened with a long-term visa or a residence permit — tourist status won't do; you need an in-person visit, a local number, and an address, and 1–2 weeks to full functionality. For short trips Alipay or WeChat Pay with a linked foreign card is enough: after passport verification the limits are US$5,000 per transaction and US$50,000 per year, payments up to ¥200 with no fee, above that about 3%. Without a [Chinese phone number](https://wiki.private.law/en/chinese-phone-number) no onboarding works at all.

## Payments and currency control

The yuan's infrastructure grows faster than individual banks close.

| Circuit | Metric |
| --- | --- |
| CIPS, participants | 194 direct and 1,597 indirect (end of Q1 2026) |
| CIPS, turnover | a record ¥920 billion per day in March 2026 (+20% year on year); ¥1.22 trillion in a day in April |
| Yuan in SWIFT | about 3% of global payments, sixth place |
| e-CNY | over ¥16 trillion accumulated |
| mBridge | about US$55 billion (China, Hong Kong, Thailand, the UAE, Saudi Arabia) |

A notable share of yuan settlements goes through CIPS and never reaches the SWIFT statistics.

### The stack: CNAPS, CIPS, SWIFT, and UnionPay

China's payment infrastructure has several layers, and they are confused most often. **CNAPS** (China National Advanced Payment System) is the People's Bank's domestic circuit: HVPS clears large amounts in real time, BEPS handles retail netting; any yuan inside the mainland is finalized here. **CIPS** is the cross-border overlay for settlements with non-residents: messages in ISO 20022, finality via participants' accounts in CNAPS. **SWIFT** remains the messaging layer for most indirect participants — which is why a "payment via CIPS" is often visible in SWIFT tracking too. The card layer is UnionPay, the digital one is e-CNY.

In practice, a payment to a mainland bank almost always needs, besides the SWIFT BIC, the 12-digit **CNAPS code** of the recipient's branch (the equivalent of a local routing number) — regional branches often have no BIC of their own, and without the CNAPS code the payment goes to manual handling; the recipient's and the bank's names are duplicated in Chinese. Routes and correspondents are in [payments to China](https://wiki.private.law/en/china-payments).

SAFE currency control is the frame around any flow, and it operates through the bank as the first line of checks:

- **capital comes in** to a dedicated capital account and is converted into yuan as permitted use arises
- **dividends go out** only after the annual audit, payment of CIT, a tax clearance, and the bank's review of the corporate resolution; 10% withholding (5% under some tax treaties)
- **service payments and royalties** abroad require a contract, an invoice, proof of the service, and withholding-tax documents — each route undergoes an economic-substance check
- **for individuals**, an annual quota of US$50,000 for buying foreign currency; transfers above it go through documented grounds
- the first payment on a new route always takes longer to clear; a predictable history under a single contract is the main asset
Focused breakdowns: [the three payment filters and the route map](https://wiki.private.law/en/china-payments), [HS codes and stop-lists](https://wiki.private.law/en/china-bank-restrictions), [trade finance and Sinosure](https://wiki.private.law/en/china-financing), and the [WorldFirst](https://wiki.private.law/en/china-supplier-payouts) and [PingPong](https://wiki.private.law/en/china-supplier-payouts) platforms for suppliers and marketplaces.

## Investment and market access

Direct entry of foreign private capital into the mainland market remains rationed, and almost all working channels run through Hong Kong: **Stock Connect** (Shanghai and Shenzhen shares via HKEX infrastructure without a China account), **Bond Connect** (the interdealer debt market), **QFII/RQFII** for institutional volumes. For a client with large capital this is legitimate China exposure without entering mainland compliance — the mechanics are in the [Hong Kong hub](https://wiki.private.law/en/hong-kong-hub).

Real estate is a restrictive regime: a foreigner may own one property for their own residence after a year of work or study in China; an investment purchase "off the street" does not work. Crypto operations have been banned since 2021 — the crypto circuit is built outside the mainland, usually via Hong Kong. China takes part in CRS: accounts with foreign controlling persons are reported to their country of tax residence ([how the exchange works](https://wiki.private.law/en/tax-transparency)).

## Residency and status

- [Residency in China: work permit, Z visa, and permanent residence](https://wiki.private.law/en/china-residency) — the A/B/C points system with a full table, routes via a WFOE and a representative office, the K visa for STEM (since October 2025), the five-star card, and the IIT scale
- [China: visa-free for Russians](https://wiki.private.law/en/china-visa-free-transit) — 30 days without a visa, the regime extended to December 31, 2027; 240-hour transit
- Documents: since November 7, 2023 China is in the Hague Convention — Russian documents are accepted with an apostille, without consular legalization
- Tax residency — 183 days, the six-year rule for worldwide income (2026 is the year to plan a "resetting" departure for those resident since 2019), fringe-benefit reliefs through the end of 2027
## Capital and inheritance

Inheritance is governed by the 2021 Civil Code: the orders of succession, shares, and planning are in [Intestate succession in China](https://wiki.private.law/en/china-intestate-succession). For family assets with a Chinese element the practical rule is the same as for business: ownership is structured outside the mainland (Hong Kong, Singapore), while operational assets with a clear succession path stay inside China.

## Operational topics

- [Apostille and legalization](https://wiki.private.law/en/apostille) — since November 7, 2023 China is in the Hague Convention: Russian documents for the bank, the work permit, and deals go with an apostille instead of consular legalization
- [AML/KYC for the private client](https://wiki.private.law/en/aml-kyc-private-client) — the source-of-funds / source-of-wealth pack a Chinese bank will ask for at onboarding
- [Beneficial ownership and nominee](https://wiki.private.law/en/beneficial-ownership-nominee) — the UBO is disclosed to the bank and reported under CRS; nominee arrangements do not work in China
- [Economic substance](https://wiki.private.law/en/economic-substance) — an office, staff, and decisions on the ground: the condition for the Hainan/Qianhai preferential perimeters and for the resilience of a holding above the WFOE
- [Over-the-counter crypto settlement (OTC USDT)](https://wiki.private.law/en/otc) — crypto liquidity in the China deal circuit lives outside the mainland, usually via Hong Kong
- [Holding structures](https://wiki.private.law/en/holding-structures) — where the top tier above the WFOE sits: Hong Kong, Singapore, Luxembourg
## Typical scenarios

### Trade without a presence

An HK Ltd or another foreign company → an account for China trade per the [bank map](https://wiki.private.law/en/chinese-banks) or a neobank → settlements in yuan via CIPS. A WFOE is added when you need fapiao, local contracts, and export VAT refunds.

**Timeline:** the account 15–40 business days depending on the bank and profile.

### A WFOE for an operating business

Registration 15–20 business days → seals, tax setup, e-fapiao → a bank account 25–30 business days → SAFE capital registration → an audit and 汇算清缴 annually.

**Timeline:** a working company with an account — **45–60 business days**, first-year budget €10,700–20,700.

### Founder relocation

A WFOE or RO → apostilles (4–8 weeks) → a notification letter → a Z visa → a work permit + residence permit in 8–12 weeks → after 4 years of work (2 for certain hi-tech) — an application for permanent residence.

**Timeline:** the first status — about six months, counting the company and legalization.

### China exposure for private capital

When the goal is not operations but investment: a Hong Kong company and account (HSBC HK / BOCHK) → Stock Connect and Bond Connect for mainland securities → yuan liquidity in CNH without China's currency control. No mainland structure is created at all; all reporting and compliance stay in the Hong Kong circuit. Timeline: 6–10 weeks for the company and account.

## Where China works and where it doesn't

### Works

- Manufacturing, procurement, and supply chains — direct contracts with factories, fapiao, and export VAT refunds
- **Yuan settlements** — CIPS as a standalone clearing circuit without dollar correspondents
- Regional incentives — Hainan 15%, Western Development 15%, HNTE 15%, small companies ~5%
- Access to the domestic market — a WFOE with 100% foreign ownership in open industries, e-commerce through the Hangzhou zones
- A sanctions perimeter separate from the Western one — with clean goods and transparent documents; the bank filter is strict all the same
- Talent and infrastructure — the engineering market, logistics, rail routes to Europe
### Doesn't work

- Holding and structuring — CIT 25% on worldwide income, currency control, inflexible distributions: the holding stays in Hong Kong or Singapore
- Storing capital — deposit protection of ¥500K, withdrawal control, a bank review of every large flow
- A "backup airfield" with no function — residency is derived from work, and a dormant status is not renewed
- Confidentiality — Golden Tax IV reconciles fapiao, bank, and returns automatically; accounts are reported under CRS
- **Crypto-native operations** — banned since 2021; the crypto circuit is built via Hong Kong
- A quick exit from investments — repatriation goes through an audit, a tax clearance, and SAFE: weeks, not days
## China vs Hong Kong

| **Objective** | **Jurisdiction of choice** |
| --- | --- |
| Fapiao, hiring in China, export VAT refunds | Mainland China (WFOE) |
| A holding for Chinese assets | Hong Kong |
| Yuan liquidity without mainland compliance | Hong Kong — CNH, [BOCHK](https://wiki.private.law/en/bank-of-china-hong-kong) |
| Foreign-trade settlements with Russia | Mainland regional banks — Harbin, CZCB; routes in [payments to China](https://wiki.private.law/en/china-payments) |
| Investing in Chinese securities | Hong Kong — Stock Connect, Bond Connect |
| Personal residency | Hong Kong is easier (TTPS/QMAS); in China — only through work |
| Profit tax | Hong Kong: 8.25/16.5% territorial; China: 25% on worldwide income with 15/5% reliefs |
| Capital movement | Hong Kong — a free port with no currency control; China — SAFE and a capital account |
| Sanctions logic | Hong Kong — UN sanctions + banks' extraterritorial compliance; China — its own perimeter + fear of secondary sanctions |

> 🍓 The working combination for a business with a Chinese load is a Hong Kong company as the financial circuit + a WFOE as the operational presence: Hong Kong holds capital, contracts, and currency flexibility, the mainland holds fapiao, staff, and local contracts. WFOE → HK dividends carry 5% withholding under the tax treaty for qualifying participation.

## Common mistakes

### **A WFOE without bank pre-screening**

Registration goes through, the account does not: a virtual address, unexplained capital, and sensitive jurisdictions in payments read to the bank as a weak KYC pack. The second filing already carries a rejection history. The correct sequence: bank pre-screening → registration → filing.

### **A company for residency with no activity**

A work-permit renewal is checked against the IIT history: an empty shell is not renewed. If there is no operating business, a representative office is cheaper; a comparison of routes is in the [residency article](https://wiki.private.law/en/china-residency).

### **"Large capital" in the charter**

Under the Company Law, an LLC's registered capital is paid up within 5 years — a pretty figure turns into a real obligation, and the auditor and the bank check the actual contribution.

### **Expecting CIPS = a payment guarantee**

CIPS is infrastructure, while throughput is decided by a given bank's compliance: HS codes, counterparties, the origin of funds. The route is designed from the bank's risk policy, with a backup circuit.

### **Ignoring fapiao discipline**

Without incoming fapiao there is no VAT deduction and no recognition of expenses, and Golden Tax reconciles invoices, bank, and returns automatically. "Year-end from PDFs" accounting does not come together in China — the auditor first reconstructs the books, which is more expensive and slower.

### **Dividends without preparation**

A payout requires an audit, a tax clearance, and a bank review; 10% withholding (5% under some tax treaties). From 2025 to 2028 a tax credit of up to 10% applies for reinvesting dividends into encouraged industries — it is often simply not used.

### **Working on visa-free entry**

The 30-day visa-free entry covers negotiations and trade shows, but not paid functions. On-site office checks are common practice; a violation closes off future statuses.

## Q/A

### Do you need a Chinese company to buy from China?

Up to a certain volume — no: neobanks and a Hong Kong company with an account cover the need. A WFOE is justified when you need fapiao, local contracts, and export VAT refunds — that is already a presence with an audit and SAFE.

### Can a foreign company open an account at a Chinese bank?

Yes — this is the main scenario in the [bank map](https://wiki.private.law/en/chinese-banks): an HK Ltd and other foreign structures for China trade. Goods, counterparties, and the owner decide, not the bank's signboard; the RU profile narrows the choice to the regional segment.

### How do you get profit out of a WFOE?

Dividends after CIT, the audit, and a tax clearance; 10% withholding at source (5% under some tax treaties). Service payments and royalties are possible, but each undergoes a SAFE economic-substance check. There are no fast routes — repatriation is planned around the audit calendar.

### What happens with Russian payments?

The Big Four are all but closed, the flow lives in regional banks and shifts quarterly. The current map is in the [payments hub](https://wiki.private.law/en/china-payments).

### Can a foreigner buy real estate in China?

One property for their own residence — after a year of work or study in China. An investment purchase without status does not work, and the property itself grants neither a visa nor residency.

### Do Alipay and WeChat Pay work with a foreign card?

Yes: after passport verification — US$5,000 per transaction and US$50,000 per year, up to ¥200 with no fee, above that about 3%. For full-fledged living you need a local account, and that requires a long-term status.

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## Factual claims

- Canonical article: Company in China: WFOE, SAFE, fapiao and a bank account →
- Mainland China is the world's second-largest economy: in 2025 its GDP topped ¥140 trillion for the first time (¥140.19 trillion, +5%, about US$20 trillion).
- The Russia–China goods flow in 2025 — four reference figures.
- About 90% of settlements run in rubles and yuan, so all the practical mechanics come down to yuan routes and a given bank's willingness to process them.
- A personal account at a mainland bank is opened with a long-term visa or a residence permit — tourist status won't do; you need an in-person visit, a local number, and an address, and 1–2 weeks to full functionality.
- Inheritance is governed by the 2021 Civil Code: the orders of succession, shares, and planning are in Intestate succession in China.

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