{"id":2504,"date":"2022-01-10T09:00:00","date_gmt":"2022-01-10T09:00:00","guid":{"rendered":"https:\/\/examinechina.com\/blog\/?p=2504"},"modified":"2023-02-05T10:06:13","modified_gmt":"2023-02-05T10:06:13","slug":"payment-to-an-account-in-hong-kong-or-singapore","status":"publish","type":"post","link":"https:\/\/www.examinechina.com\/payment-to-an-account-in-hong-kong-or-singapore\/","title":{"rendered":"Payment to an account in Hong Kong or Singapore when importing from China"},"content":{"rendered":"\n

When you have already chosen a product you want to import and found its manufacturer, you must pay for the order. Chinese suppliers often ask importers for payment of the amount due to the bank account not in Mainland China but, e.g., in Hong Kong, Singapore, or Vietnam. Such a situation should be a warning sign for you. Why not agree to this condition? What does it mean for an importer?<\/p>\n\n\n\n

What is the risk of paying to a bank account outside<\/strong> Mainland China?<\/h2>\n\n\n\n

If you have such a possibility, do not<\/strong> agree to transfer money to a bank account under a different jurisdiction. It can cause many unnecessary problems during the import process. First and foremost, it\u2019s essential to make payments to a Chinese bank account under the supplier\u2019s company name. Then, they will be obliged to include it as income in the financial records. However, if you transfer the amount due to an account, e.g., in Hong Kong, you will likely help such a company avoid paying taxes. <\/p>\n\n\n\n

Furthermore, you must remember that paying money to the account under the company\u2019s name is also proof of a transaction between our and a supplier\u2019s company. Thus, supposing you make a transfer to some other account, then in case of occurring any problems with the goods, the supplier may use an argument that you didn\u2019t pay their company. You are not paying the manufacturer directly but a different firm in such a case.<\/p>\n\n\n\n

What does it mean?<\/h3>\n\n\n\n

Let\u2019s assume that you had ordered goods from a manufacturer, but your package never reached a destination port. In this situation, if you had transferred a sum of money to an account in Hong Kong, Singapore, or another place outside of Mainland China, a supplier can assert that you hadn\u2019t paid their company for the products. The same thing may happen if you want to sue the manufacturer for shipping non-conforming goods. Fraudulent suppliers can easily use this method to avoid consequences or even demand another payment, but this time to a different Chinese bank account.<\/p>\n\n\n\n

What should I do if a Chinese supplier asks for a transfer to a Hong Kong or Singapore bank account?<\/h2>\n\n\n\n

As we have mentioned before, it\u2019s better not to agree to such a transfer if there is a possibility. It would be best to ask a Chinese supplier to provide you with their bank account number in Mainland China. However, it can happen that Chinese suppliers will insist on their conditions. What to do in this case? If such a situation occurs, you need to verify both companies<\/a>, not only the supplier\u2019s company. This way, you will be able to check if both businesses are related and to whom you\u2019re sending your money.<\/p>\n\n\n\n

One must remember that Hong Kong is a Special Administrative Region with a separate legal and company system from China. Starting a company in Hong Kong is very simple. Therefore, fraudsters can open businesses there effortlessly. If you make a payment to an account in Hong Kong without the prior verification of both companies, your money will reach an utterly distinct unit.<\/p>\n\n\n\n

Please note that, e.g., companies Ningbo Trading Co., Ltd. and Ningbo Trading (HK) Co., Ltd. are different units. For this reason, in case of a dispute, a manufacturer can claim that we didn\u2019t pay their company for the goods, and they\u2019ll be right. Remember that you cannot be sure to whom they will be sent when transferring money to Hong Kong or Singapore without prior verification. Hence, you also cannot be sure that you will receive your goods.<\/p>\n\n\n\n

How to check where a bank account is located?<\/h2>\n\n\n\n

To check whether a bank account provided by a Chinese supplier is under Chinese jurisdiction, it\u2019s worth using the SWIFT Code Checker<\/a>. SWIFT Code is an 8-11 digit number identifying the country, city, bank, and even its branch. Every bank account has its own SWIFT Code or, in other words, BIC (Business Identifier Code). It\u2019s handy when making international transfers.<\/p>\n\n\n\n

The SWIFT Code structure<\/h3>\n\n\n\n

The correct understanding of the SWIFT Code requires knowing its structure. The first four digits in the code are an institution\u2019s identifier. Thus, they point out a particular bank. The next two indicate a country where the bank Is located. The following two enable recognizing a bank, and the last three specify its branch. The graphic below shows the SWIFT Code\u2019s structure for two banks \u2013 one located in Mainland China and the other in Hong Kong.<\/p>\n\n\n

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