Should Sole Proprietorships Open a Business Bank Account? A Guide to Opening Accounts for Individual Businesses

Many clients ask me: "I run a small shop. Do I really need to open a corporate bank account?" There's no one-size-fits-all answer—it depends on your business needs.

Bottom line: Issue an invoice if you need one for tax purposes, to join an e-commerce platform, or if your partner requires a corporate transfer. If none of these apply, you can skip it for now.

When is a corporate bank account mandatory? First, if clients require invoices. While sole proprietorships can issue ordinary invoices, many corporate clients only accept payments via corporate accounts; without one, you cannot fulfill such orders. Second, for joining e-commerce platforms. Platforms like Taobao, JD.com, and Pinduoduo require binding a corporate account. Third, due to partner requirements. Many B2B clients prefer conducting business exclusively through corporate accounts as it appears more professional.

Which bank offers the best value? We recommend choosing one with extensive branch coverage and low annual fees. The four major state-owned banks (ICBC, ABC, BOC, CCB) have many branches but higher annual fees, typically 500-1000 yuan/year. Joint-stock banks (CMB, SPDB, CMBC) offer lower annual fees, ranging from 200-500 yuan/year. If your transactions are simple, opt for the lowest annual fee option.

What documents are required to open an account? Typically, you need the original business license, original ID of the legal representative, official seal, financial seal, and personal seal of the legal representative. Some banks also require proof of business premises, such as a lease agreement or property deed.

Annual fees: 200–1000 per year, plus potential account maintenance and online banking service fees. Ask about all charges before opening an account to choose the lowest total cost option.

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