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.
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.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)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.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.The shareholder must include in the remittance remarks (reference/description) words like:
Capital or Investment
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.
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.
Set up in 2009
Focus on Tax& Accoounting
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