Frequently Asked Questions
1. Following the latest announcement on the regulatory requirements for Renminbi Business, what are the developments for RMB Commercial Banking Services that can be offered by the banks in Hong Kong?
|Services||After 8 June 2011|
- Inward and outward RMB remittance services which do not involve foreign exchange (including remittances between Hong Kong and mainland China, as well as between Hong Kong and overseas) can be conducted in accordance with the usual banking practices in Hong Kong.
Note: In order to avoid delayed payments, customers are advised to check the eligibility of their payees on the Mainland for receiving RMB funds before making outward remittance application in Hong Kong
- Two-way exchanges between the HKD (or other foreign currencies) and the RMB can be conducted in accordance with the usual banking practices in Hong Kong
1. When customers purchase RMB for cross-border mercantile trade settlement purpose with the Mainland counterparts, it is necessary to submit relevant cross-border trade documents of merchandise goods when conducting RMB exchange for cross-border trade settlements with the Mainland enterprises. The exchange amount must not be larger than the amount shown on the trade documents of merchandise goods
|Trade Services||- Apart from mercantile trade, service trade can also be settled in RMB, but the exchange rate for cross-border mercantile trade settlement purpose cannot be applied to such RMB exchange|
|Lending||- Provision of any type of business loan to any commercial customers (but not personal and Designated Business Customer "DBC" Accounts) in accordance with the usual banking practices in Hong Kong
- RMB funds in an "RMB Account" can be placed under pledge for a loan denominated in the RMB or any other currency
|RMB Bonds & Other Wealth Management Products||- Apart from providing RMB bonds subscription services, banks in Hong Kong can provide RMB financing to commercial customers for their bond investments
- Apart from RMB bond investments, banks in Hong Kong can also develop other RMB-related wealth management products to cope with market needs
2. How many Mainland locations are included in the "Pilot Program of RMB Settlement of Cross-border Trade Transactions"?
Currently, the Pilot Program of RMB Settlement of Cross-border Trade Transactions covers 20 provinces and cities, including Beijing, Tianjin, Inner Mongolia, Liaoning, Shanghai, Jiangsu, Zhejiang, Fujian, Shandong, Hubei, Guangdong, Guangxi, Hainan, Chongqing, Sichuan, Yunnan, Jilin, Heilongjiang, Xizang and Xinjiang.
3. Is the Mainland Designated Enterprises ("MDEs") qualification still valid? Can I conduct RMB trade settlements with non-MDEs?
The MDE qualification remains valid. All enterprises (including MDEs & non-MDEs) in the 20 provinces and cities covered by the Pilot Program of RMB Settlement of Cross-border Trade Transactions are allowed to settle in RMB two-way service trade and imports of goods into the Mainland. Exports of goods from the Mainland have to be conducted in accordance with the procedures applicable to the MDEs if they are to be settled in the RMB under the cross-border RMB trade settlement pilot scheme.
4. Are all commercial customers eligible to open RMB Savings Accounts and/or RMB Current Accounts ("RMB Accounts"), with Hang Seng Bank?
Yes. Commercial customers are eligible to open "RMB Accounts" with Hang Seng Bank in accordance with the normal account opening procedures and requirements of the Bank.
5. Can a Designated Business Customers ("DBCs") Account holder open an "RMB Account", for general purposes, with Hang Seng Bank at the same time?
Yes. DBCs can also open an "RMB Account" for general purpose. However due to the different regulatory requirements between DBC Accounts and "RMB Accounts", transfers of RMB funds from "RMB Accounts" to DBC Accounts are not allowed.
Yes. There is no particular restriction on RMB cash deposits and withdrawals for "RMB accounts" of commercial customers. However, it should be satisfied that such cash deposits or withdrawals are reasonable in the context of the customer’s ordinary course of business in Hong Kong.
7. Is there any restriction for commercial customers to purchase RMB for cross-border mercantile trade settlement? Is it necessary to submit any supporting documents in this regard?
Yes. When customers purchase RMB for the cross-border mercantile trade settlement with the Mainland counterparts, commercial customers are required to submit RMB Exchange Instruction & Declaration Form and relevant trade documents of merchandise goods in relation to their cross-border trade transactions. Relevant trade documents of merchandise goods include sales invoice, transport documents issued by a third party and any other trade related supporting documents as required by the Bank from time to time. The RMB exchange amount must not be larger than the amount shown on the cross-border trade documents of merchandise goods.
8. Can commercial customers conduct RMB exchange for cross-border mercantile trade settlement when their trade counterparts are not in the mainland China?
No. RMB exchange for cross-border mercantile trade settlement purpose is only applicable for direct trade payment to / collection from the Mainland counterparts for merchandise goods.
9. As a remitter, do I need to submit any supporting documents when conducting RMB outward remittance to the Mainland?
If the outward remittance does not involve RMB exchange for cross-border mercantile trade settlement purpose, commercial customers are not required to submit the related trade supporting documents to the Bank.
However, if the outward remittance involves RMB exchange for cross-border mercantile trade settlement with the Mainland counterparts, commercial customers are required to submit RMB Exchange Instruction & Declaration form and the following trade supporting documents: Sales invoices and transport documents issued by a third party in relation to the underlying cross-border mercantile trade settlements and any other trade related supporting documents as required by the Bank from time to time.
In any case, the outward remittance amount of RMB for the RMB cross-border trade settlement must not be larger than the amount of the underlying cross-border trade transaction. Furthermore, to avoid delayed payments, commercial customers are advised to check the eligibility of their payees in the Mainland before making outward remittance applications. Otherwise, such remittance transaction may be rejected by the Mainland authorities or the Mainland banks if the remittance transaction does not fully comply with the relevant rules and requirements in the Mainland.
10. How can I make sure that the RMB inward remittances received are initiated by MDEs? As a recipient, do I have to submit any proof in this regard?
The Mainland authorities and banks will verify the identity of the remitter and the underlying trade transactions before the outward remittance can be effected. Therefore, participating banks and recipients in Hong Kong are not required to undertake further identity verification with regards to RMB inward remittances.
11. Can RMB inward remittances received from the Mainland be credited into commercial customers' non-RMB account(s) such as HKD or foreign currency account(s)?
No. RMB inward remittances received from the Mainland can only be credited to commercial customers' "RMB Accounts". Payments will be rejected if the commercial customers do not have any "RMB Accounts". To avoid rejection of payments, commercial customers are advised to open "RMB Accounts" and ensure a correct "RMB Account number" is given to the Mainland counterparts.
Where commercial customers have RMB proceeds received under cross-border mercantile trade with the Mainland counterparts in the past 3 months, the exchange rate for cross-border mercantile trade settlement purpose should be applied to any RMB sold by the customers up to the amount of such trade proceeds.
Where commercial customers sold RMB to an amount more than its aggregate trade proceeds in the past 3 months, the exchange rate for general purpose should be applied to the excess portion.
For the purpose of calculating the amount of RMB trade proceeds from cross-border mercantile trade in the past 3 months, any RMB trade proceeds from cross-border mercantile trade transferred out of the commercial customer’s “RMB Account” or any non-trade in-flow and out-flow of RMB funds should not be deducted from the customers’ total trade proceeds.
Yes, deposits denominated in either the RMB or any other foreign currency can be pledged for loan financing. Currently, it is not allowed to extend RMB loans to Personal Customers or credit the RMB loan proceeds to the DBC Accounts.
There are no restrictions on the types of borrowers and types of loans. However, RMB loan proceeds cannot be credited to the DBC Accounts.
15. I was told that commercial customers outside China are allowed to open an offshore RMB Account in the Mainland. What is the purpose of the account? What documents are required for opening such an offshore account?
Companies outside mainland China can open a RMB Non Resident Account ("NRA") with the Mainland banks for the purpose of cross-border settlement. Yet, cash withdrawal is not allowed.
Documents required for opening a NRA with the Mainland banks include but are not limited to, Certificate of Incorporation, Identification document(s) of directors & signatories, Memorandum and Articles of Association, etc. Other documents may be required by the respective PBoC local office and the Mainland bank. All documents submitted to PBoC should be in Chinese or translated into Chinese.
Since the account operation is subject to the administration of the relevant local PBoC branch, account opening bank is required to obtain respective PBoC branch's prior approval before account opening.
The above information is for reference only. Customers who are interested in opening an offshore account may contact Hang Seng Bank (China) Limited for updated application details.
Our Macau Branch also offers RMB trade settlement services. Furthermore, Hang Seng Bank (China) Limited is one of our correspondent banks in the Mainland and is a Mainland settlement bank offering RMB trade settlement services to commercial banks outside the Mainland, as well as MDEs in the Mainland.