Business in China
How can we help you succeed?
China’s influence on international trade continues to grow and recent developments have accelerated the importance of the Chinese Renminbi (RMB). On-the-ground support and currency solutions can help you succeed in this rapidly changing environment.
On October 1, 2016, the renminbi became one of the world’s reserve currencies. Along with a series of liberalizing moves, this development has turned the renminbi into an “elite currency” according to the New York Times.
PNC can help you take advantage of the growing role of the renminbi in international trade with new hedging tools and payment options to help you manage risk, improve your competitive position and increase profitability.
PNC’s Shanghai Representative Office can provide support and insight to help U.S. companies navigate the day-to-day challenges of doing business in a changing China.
If you are new to doing business in China, you may find that opening a bank account is a little more complicated than you might expect. There are also a number of ways that banking practices differ from those in the United States and other countries. This article is designed to give you the basic information you need to move forward.
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Once your business is established in China and you are making a profit, you will probably want to repatriate the proceeds at some point. Tax implications and tax planning are important considerations for determining the optimal profit repatriation strategy.
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Once you have established your company in China as a Representative Of ce (RO), Wholly Foreign Owned Enterprise (WFOE) or a Joint Venture (JV), it is subject to taxes. The business sector, development zones and geographic regions will have an impact on the regulations that apply.
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Whether you are currently doing business with China or considering an expansion, human resources will be essential to your success. This article is intended to provide an overview of laws and regulations that differ in many important respects from those of the United States and other countries where you may be doing business.
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As you enter the Chinese market, the first step is to create and register your company as a legal entity. Structures, processes and regulations are quite different than those in in the United States and elsewhere in the world. Here’s what you need to know to get started.
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Over the past few years, China has taken steps to liberalize cross-border payments, making it easier for US companies to make payments in renminbi. The Chinese renminbi is now among the world’s elite currencies and global RMB payments totaled approximately US $1.6 trillion in 2014 making the Chinese currency a significant component of international trade.
Paying in local currency may potentially lower your costs and give you better payment terms.
Due to embedded premiums and transactional charges, the administrative cost of paying in US dollars can be 2% to 3% higher than dealing in local currency. In addition to reducing administrative costs, suppliers who invoice in renminbi no longer have to build in a buffer for potential exchange rate movements. At the same time, there is a highly liquid renminbi forward market that facilitates hedging your currency risk.
Renminbi can now be used for cross-border payments in and out of China. Foreign companies no longer need to have a legal entity established in China or Hong Kong in order to open a renminbi account with PNC.
PNC can help you:
Hedging tools and services are now available to help manage currency risk when transaction in renminbi, which helps you to take advantage of cost savings while managing the currency risk.
PNC offers a suite of international solutions to help our clients conduct business in China.
Streamline your Chinese cash flow by setting up a demand deposit account (DDA) that holds Chinese Renminbi instead of U.S dollars. PNC's team can help you set up a multicurrency account and you can easily view deposit and withdrawal details through PINACLE®, PNC's top-rated online corporate banking portal. PNC's multicurrency accounts offer a simple and integrated way to manage and move money denominated in different currencies without the need to open accounts with foreign banks.
PNC offers two service models to help you open and manage accounts in China and Hong Kong.
Most exports to China are financed with a Letter of Credit issued by a Chinese bank, but often Chinese banks discourage confirmation of the Letter of Credit. PNC's China Document Purchase Program can help you to mitigate this risk and improve your cash flow. Under the program, PNC assumes the credit risk of certain Chinese banks. Whether your payment terms of sale are designated 'at sight" or for longer payment terms, PNC will provide you with an exact date of payment once your documents are in compliance with the terms and conditions of the Letter of Credit. Benefits include:
PNC's Import and Export Services can support and simplify your international commercial goods purchases and sales. Our range of services can streamline document exchange, reduce payment or collection risks, and facilitate your financial transactions.
PNC’s Shanghai Representative Office can provide support and insight to help U.S. companies navigate the day-to-day challenges of doing business in mainland China. The office is staffed by individuals with deep local knowledge and fluency in both English and Mandarin.
Our office can:
PNC’s Foreign Exchange Sales and Trading desks are located in 10 major U.S. cities and PNC maintains a representative office in Shanghai.
Washington, D.C.: 1-877-856-6957
PNC’s Shanghai Representative Office
Grace Zhu, Chief Representative
Chris Chen, Representative
The New York Times, Nov. 30, 2015
The Wall Street Journal, Jan. 21, 2015
PNC Bank, NA’s (“PNC”) Shanghai Representative Office was approved by the China Banking Regulatory Commission on April 16, 2008. PNC’s Shanghai office is prohibited from engaging in any form of operational business activities in compliance with the People’s Republic of China on Administration of Foreign-funded Banks released by the State Council. Accordingly, PNC’s Shanghai Representative Office does not accept deposits, underwrite loans or issue credit of any kind, or sell wealth management products in China. Any activities of these types in China using the PNC name or trademarks are not authorized by PNC.
PNC Bank, National Association is a subsidiary of The PNC Financial Services Group, Inc. (NYSE: PNC). For further information, please refer only to www.pnc.com.
The information contained herein is intended for informational purposes only, and should not be construed as legal, accounting, tax, trading or other professional advice. You should consult with your own independent advisors before taking any action based on the Information. Under no circumstances should the information be considered trading advice or a recommendation or solicitation to buy or sell any products or services or a commitment to enter into any transaction. The information is gathered from sources PNC Bank believes to be reliable and accurate at the time of publication and are subject to change without notice. PNC Bank makes no representations or warranties regarding the information’s accuracy, timeliness, or completeness. All performance, returns, prices or rates are for illustrative purposes only. Markets do and will change. Actual results will vary, and may be adversely affected by exchange rates, interest rates, commodity prices or other factors.
Foreign exchange and derivative products are obligations of PNC Bank, Member FDIC and a wholly owned subsidiary of PNC. Foreign exchange and derivative products are not bank deposits and are not FDIC insured, nor are they insured or guaranteed by PNC Bank or any of its subsidiaries or affiliates.