If your company has foreign shareholders, the Capital Account is the only way to receive cross-border investment.
Many companies face rejected funds or delayed entry due to small but critical mistakes.
Here are 5 practical tips, written for foreign investors and finance teams.
1. Separate Purpose, Separate Bank Account
Investment funds must go into the Capital Account – not the basic operating account or other accounts.
Even if your company has other transactions with the foreign shareholder, the investment round must use the Capital Account.
Action point: Clearly remind your shareholder to use the Capital Account details, not the regular account used for daily payments.
2. Where to Open the Bank Account?
You are not required to open the Capital Account at the same bank as your basic operating account.
Recommended: Use the same bank as your basic account.
1)Faster fund transfer after conversion (Capital Account → basic account)
2)Lower fees, better service, easier compliance
3. Timing – Don’t Open Too Early
An unused Capital Account may become “dormant” (inactive), leading to frozen functions or required reactivation.
Best practice: Open the account about 2 weeks before the actual remittance.
If the shareholder is not ready to send funds soon, wait to open the account.
4. English Name Must Match Exactly
For cross-border wires, the company’s English name on the remittance must be identical to the name registered with the bank.
Even a small difference (e.g., “Ltd.” vs “Limited”) may cause rejection or delays.
Action point: Provide the shareholder with the exact English name as recorded by your bank.
5. Remittance Remark – Use the Right Keywords
The shareholder must include in the remittance remarks (reference/description) words like:
Why it matters:
Banks rely on this remark to classify the funds. If it says “goods,” “service fee,” or is left blank, the bank will not treat it as capital contribution, and the funds may be rejected.
Final Reminder
Local foreign exchange policies and bank procedures may vary by city or change over time.
Always double-check with your specific bank before opening the account or initiating the wire.
Clear process = smooth funding. One small mistake can cost weeks of delay.
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Focus on Tax& Accoounting
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