Establishing a Foreign Owned Financial Institution in China

[ By Adam Pilger and Richard Hoffmann, Dezan Shira & Associates ]

Setting up a foreign-owned bank in China can be a daunting task, requiring strict adherence to the China Banking Regulatory Commission?s ?Measures for the Implementation of Administrative Licensing Items Concerning Foreign Funded Financial Institutions.? While the CBRC?s requirements for establishing foreign-funded financial institutions are lengthy, and oftentimes inexplicably repetitive, they can be distilled down to three manageable components: setting up the representative office, applying for a business license, and establishing a branch.

Setting up the representative office

Representative offices are necessary vehicles for setting up a foreign-funded bank in China (the RO must be held for a period of two years prior to implementation of licensing for a foreign-funded bank). An RO allows foreign staff to obtain required working visas and residence permits and allows the business to legally employ a local staff as well. It paves the way for more extended and substantial future investment, but also has significant limitations?the largest being that an RO cannot engage in direct business activities (for more on representative offices, please see China Briefing?s ?Setting Up Representative Offices in China” from the bookstore at

In order to set up an RO, the foreign-funded bank will need to meet the following six conditions:

(1) The foreign-funded bank is located in a country with a sound financial regulatory system
(2) The bank was established upon approval of the financial authority of the country or region where it is located, or it is a member of an association of the financial sector
(3) If a foreign-funded financial institution applies for establishing a general representative office within China, it shall have established five or more branch institutions (including representative offices) within China
(4) The bank demonstrates favorable business performance with no record of gross violations
(5) The bank has effective anti-money laundering measures
(6) Other requirements as prescribed by the CBRC

Next :
China?s Financial Centers

To know more, the whole issue is available (after a free subscription) on China Briefing website with others archives
For more information on China’s legal and tax issues or to ask for professional advices in related matters, please write to


Add your comment

Commenting is allowed only for registered users.

Other articlesgo to homepage

Trends in the Chinese Online Education Industry

Trends in the Chinese Online Education IndustryComments Off

The Increase of China on the net Training Market place Income of online training sector in China achieved 84 billion Yuan in 2013, with a 19.9%-growth from 2012, based on the 2013-2014 China On-line Education Report unveiled by iResearch. The huge Potential of China on the internet Education Market place The 3 key engines are

US$1.8 Trillion : the Chinese Consumption by 2021

US$1.8 Trillion : the Chinese Consumption by 2021Comments Off

Luxurious manufacturers in China have had to deal with down a slowing financial system for many time, but a brand new report by Boston Consulting Group (BCG) and Alibaba Group’s study section, AliResearch sheds a more constructive light-weight on China’s purchaser economic system. By 2021, Chinese people are envisioned to add US$1.8 trillion in new

China Structure – Joint Ventures

China Structure – Joint Ventures(0)

Forming a joint venture in China can be a successful endeavor as long as each side?s goals, contributions and responsibilities are mutual and understood.

China Structure – Foreign-Invested Commercial Enterprises

China Structure – Foreign-Invested Commercial Enterprises(0)

Foreign-invested commercial enterprises are capable of conducting the following activities: Import, export, distribution and retailing Retailing ? selling goods and related services to individual persons from a fixed location, as well as through TV, telephone, mail order, internet, and vending machines Wholesaling ? selling goods and related services to companies and customers from industry, trade

China Structure – Wholly Foreign-Owned Enterprises

China Structure – Wholly Foreign-Owned Enterprises(0)

The wholly foreign-owned enterprise has become the investment vehicle of choice for the international investor wanting to manufacture, service or trade in China.

read more

Contacts and information

Social networks

Most popular categories

Real Time Analytics