Unicredit, first Italian banking group, recently announced the closure of its offices in the Pacific area and Far East, including China, where, according to what has been released to the press, only the branch of Honk Kong would remain operative with a purely representation function.
The re-organization of Unicredit presence in these areas will imply a change in the operating modes used by the Italian group to deliver banking services, which will be probably managed by the on-site corresponding banks in order to assist clients directly served by Unicredit until now.
In particular, relating to foreign companies operating in China, the termination of Unicredit activity will imply the necessary closure of the bank accounts currently active with the branch office of Shanghai.
The companies that are depositors of the so-called Basic Account with Unicredit, shall pay particular attention to this issue. Once a company is registered in China, the activation of a Basic Account, as well as the capital account, represents one of the primary requirements in order to guarantee company the full operation.
While the capital account is necessary for the payment of the share capital by the foreign investor, the Basic Account, instead, is to be intended as the “official” company account. It is, in fact, designed for the daily transactions, payments, withdraw, but more importantly, salaries payment, cash collection and taxes payment.
It should be noted that each company shall hold one and only Basic Account.
Therefore, besides the closure of the bank account, companies shall identify beforehand or activate ex novo a bank account with a different bank operating in China, qualifying it afterwards as the Basic Account of the company.
Once the Basic Account has been identified, the company can close the account opened with Unicredit.
Lastly, it is noted that the Basic Account cannot be opened with the same bank unit/sub-branch where other accounts, held by the company, are already active.
On a practical level, in case a company already holds a further account with a bank different from Unicredit, it can proceed by transferring funds from the Basic Account to this different account, then closing the Basic Account and, lastly, applying for the upgrade of this account to basic, taking into account that money transfers are not permitted during the first 7 days after this operation.
In case company does not hold any other accounts, it will be necessary to open a new dedicated bank account.
China Desk – Zunarelli Law Firm
