More on the the costs of setting up a Rep Office in China – Banking in China.
Like most other aspects of setting up a business in China, banking can be troublesome to say the least. All the hidden costs combine to make a powerful barrier to entry for new businesses.
Rep Offices (and SMEs in general) are being hit with increased bank account setup & maintenance fees, when compared to larger corporate clients. Â In order to open an RMB account, companies are required to pay
- set up charges (US$200)
- online banking fees – varies
- monthly maintenance fees – varies
- account permits (about US$30)
- electronic payment security (about US$80)
Setup fees vary between different banks. Â ODM shopped around for a full day choosing a bank with low set up fees – we could have paid over US$300 whereas we finally found a bank charging just US$ 50 to set up. Â Â Online banking fees are even higher so we do not really use our Chinese bank accounts.
In addition, banks have tightened the documentation requirements of a newly opened RMB account. Many now require the submission of the legal representative’s original passport, as well as a physical examination of the office location. These policies changes can hinder a foreign invested SME’s market entry if the newly established company’s legal representative is not based in China. Â If the Chief Rep is in China they will have a very high tax bill, taxed on their Global Salary for each day they spend in China.
Our Solution – all banking transfers & payments are done from Hong Kong (ODM Group Headquarters)Â where setting up and maintaining a business is relatively easy and straightforward. Â Hong Kong has lower taxes, is transparent with low set up costs. Â To keep our costs in China lower we share costs with partners..
Your Solution – Form a Partnership with a Buying Office or Buying Agent like ODM.  Share the costs and gain economies to scale for the office/staff  – not to mention strength in Procurement as a group..  ODM offer solutions with Dedicated Staff working for you exclusively.  Then you do not need to go through the headache, costs and time consuming process of setting up a stand alone entity.
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