Upon receipt of a business license and approval by the local AEC, the foreign-invested enterprises shall open a foreign exchange account and carry out other banking formalities with a bank entitled to foreign exchange operations against relevant documents.
1. Opening of Foreign Exchange Account and outward Remittance by a foreign -invested enterprise
I. A foreign exchange account shall be opened against the following documents: the approval documents and certificates for establishment of the foreign-invested enterprises; the Note of Opening Accounts and the Foreign Exchange Registration Certificate for foreign-invested enterprises issued by AEC; an application for opening such an account by the foreign-invested enterprises; business license, legal person ID code certificate, contract and articles of association.
II. Outward remittance of payments for imported goods, materials and equipment shall be made against the following documents: Import contract, import exchange payment writing-off certificate, invoice, and original customs declaration form and original bill of lading.
III. Outward a written verification remittance of non-trade payments shall made against the following documents: for outward remittance of salaries of expatriates, for outward remittance approved by AEC, and a tax payment certificate. (i.e., an income tax payment certificate); a written verification for outward remittance approved by AEC for outward remittance of repayment of foreign investment; and profit distribution resolution by the BOD, tax-paid certificate, and a capital verification report by an accounting firm for profit repatriation of the foreign investors.
2. International Settlement
A foreign-invested enterprise that engages in international settlement for the first time shall submit the approval document for its establishment and a copy of the business license to the bank.
I. Import settlement. To open an import letter of credit, an application form shall be filled out, the contract and the import exchange payment writing-off certificate shall be submitted, and a bond deposited, or the approval to use the bank’s authorized L/C amount should be presented. For import collection payment, import exchange payment writing-off certificate and contract shall be submitted, and a confirmation of payment shall be quoted on the settlement notification. If the imports belong to the restricted commodities, by the State, effective import approval issued by the State authorities is needed.
II. Export settlement. For remittance settlement, the payee shall notify the payer of the full name of the payee, the opening bank, account number and use of the payment with the number of the export exchange earnings writing-off certificate. For collection settlement, in the case of documented collection, an authorization form for documented export collection with the number of the export change earnings writing-off certificate and draft shall be made out; and the commercial invoice, bill of lading, insurance policy and other relevant documents shall be submitted to the bank; in the case of clean collection, a collection Application Form shall be made out with the number of the export exchange earnings writing-off certificate, and endorsed documents shall be submitted to the bank. For L/C settlement, the original letter of credit, the commercial invoice and other documents stipulated in the L/C should be presented, and a business contract form shall be made out for the bank.
3. Working Capital Loan in Foreign Exchange
When applying to the Bank of China for a foreign exchange loan as working capital, the borrower shall, besides a written application and a loan application form, present the following documents:
I. Photocopies of the business license and the approval document for establishment of the enterprise (for first-time borrowers only);
II. Photocopies of the approval document for import goods, and a duplicate of import of the import contract/agreement;
III. Duplicates of purchasing and sales contract and a buyback contract, if any;
IV. Relevant materials for confirmation of foreign exchange sources and timely payment of the principal and the interest on the loan;
V. Bank-acknowledged documents of credit guarantee or documents for property mortgage; and
VI. Other documents required by the bank.
4. Fixed-Assets Bank Loan
When applying to the Bank of China for a fixed-assets loan, the borrower shall, besides a written application and a loan application form, present the following documents:
I. Photocopies of the business license and the approval document for establishment of the enterprise (for first time borrower only);
II. Photocopies of the project approval, feasibility study, and the approval thereof;
III. Certification documents for sources of investment; (IV). Principal supply contracts or commitment documents for major raw materials, supplement materials, fuel, power, water, packing and other production conditions, and duplicates of the supply contract/agreement for domestic supporting facilities and approval document for land use;
IV. A sales forecast and forecast of economic returns of the project;
V. Materials that show the exchange balance;
VI. Approval document by finance and taxation authorities if the repayment is to be made through interest and tax accrued from the project;
VII. Documents of credit guarantee or property mortgage;
VIII. Financial statements of the borrower and the guarantor; and
IX. Other documents or materials required by the bank.
5. Foreign-Invested Enterprises Loan
When applying to the Bank of China for a foreign-invested enterprises loan (in foreign currency or RMB), the borrower shall, apart from a written application, for a fixed assets loan, working capital loan and a loan application form, present the following documents:
I. Photocopies of the business license and approval documents for establishment of the enterprise (for first-time borrower only);
II. Borrowing decision of the BOD, and a borrowing authorization or a document with equivalent force.
III. Duplicates of the joint venture contract, articles of association, and approval documents (for first time borrower only);
IV. Duplicates of project approval, feasibility study and the approval thereof;
V. Capital verification report and document that prove the means of investment;
VI. Duplicates of commitment document for major raw materials, supplement materials, fuel, power, water, domestic supporting facilities and land use (for fixed-assets loan only);
VII. A duplicate of relevant sales agreements;
VIII. The plan for use and repayment of the loan;
IX. Relevant materials that confirm the foreign exchange sources and timely repayment of the principal and the interest;
X. Bank-acknowledged of documents of credit guarantee and mortgage; and
XI. Other documents, materials, and financial statements required by the bank.
6. Award of Credits
Applicants of loans shall provide basic information on the applicant and the recognizer and relevant award of credits, including:
I. Application form of award of credits;
II. License of legal person, registration of taxation, articles of association, contracts and approval documents;
III. Report on appraisal of assets,
IV. Decision of approval of application of loans made by the board of directors;
V. Other necessary document requested by the bank.