China WFOE Registration Guide (13) – Banker’s Reference Letter of the Shareholder

1. Definition of Bank Reference Letter

A Bank Reference Letter provides important information regarding a company’s relationship with primary lending and depository institutions. It is used generally to verify the existence of a bank account with the bank and that the account has no bad record.

2. Content of the Banker’s Reference Letter

A Bank Reference Letter usually contains these details

 The bank header
 The letter is addressed to the specified agency
 A short paragraph on the record of the company by the bank and verified on a particular date
 The date that company set up the bank account with the bank
 The signature of the authorized personal of the bank together with the stamp of the bank.

The banker’s reference letter will also contain the name of the addressee.

3. Purpose of the Bank Reference Letter

The bank reference letter is needed to verify the financial circumstances of the foreign investor before allowing the investor to set up the company in China.

Normally, two original copies of the bank reference letter are needed. One for the Municipal Foreign Economic Relation & Trade Commission and the other for the Administration Bureau for Industry and Commerce.

The reference letter will be submitted together with other application and therefore it is important that the investor applies for the reference letter before the commencement of the application process.

4. Responsibility

The bank reference letter is requested by the foreign investor from the Bank. The investor can request this information from the Bank by a written application in a designated application form.

In the bank reference letter, the declaration usually does not involve any responsibility on the bank’s part and that the bank is normally not held liable or responsible for or by reason of the contents of the letter.