NRA Accounts (境外机构境内外汇账户)
The second type of account available to non-resident companies is the NRA (Non-Resident Account). In 2009, the SAFE unveiled the Notice Regarding the Administration for Forex Accounts Held by Foreign Institutions with Domestic Banks (Huifa , No 29), allowing all banks in China to open foreign exchange accounts for overseas businesses. NRA accounts can also be set up for Chinese companies’ overseas subsidiaries.
Funds in an NRA account can be used for goods and services trade settlements as well as capital investment (approved by Chinese authorities on a case by case basis). Transfers to/from NRA accounts are managed by banks and authorities as cross-border transactions. As a result, NRA account holders should provide the bank with supporting documents every time they conduct a transaction with a domestic entity.
Main features of NRA Accounts
While at first glance NRA accounts seem very similar to OSA accounts, they have their own unique features as highlighted below:
- Non-resident accounts are available in both RMB and foreign currencies. This allows limiting foreign exchange risk exposure;
- Non-resident accounts are only available to overseas corporations, not individuals;
- Foreign currency in NRA accounts is not fully convertible into RMB; and
- NRA accounts are subject to tighter legal oversight as banks face total foreign-exchange quotas on the business.
Generally speaking, the administrative burden is high for NRA. For example, e-banking is not available, which can make account management difficult without having dedicated staff on the ground.
How to open an NRA Account
You will need to submit the following documents to open an NRA account:
- Original and photocopy of business registration documents translated and notarized in Chinese
- Copy of the legal representative’s ID card or passport
- Copy of the ID card or passport of the agent opening the account (if applicable)
- The original agreement between the overseas entity and domestic-related parties to justify the opening of the account (could be a trade contract, service agreement, etc.)
- Chinese and English versions of the company’s articles of association
- Legal representative appointment letter
- Board resolution on opening an offshore bank account