DBS in the China (Shanghai) Free Trade Zone

Introduction

    DBS Bank (China) is the only foreign bank that is among the first batch of financial institutions to obtain approval to set up an outlet in the FTZ on 29 September 2013, to receive operational approval on 31 December 2013, and to commence business on 7 January 2014 and to pass PBOC inspection and obtain FTU license on 21 May 2015.

     

    In addition, DBS Bank (China) Ltd. Shanghai Pilot Free Trade Zone ("FTZ") Sub-Branch has also successfully pioneered the following transactions in the FTZ:

    29 April 2014: First FTZ RMB cross border borrowing transaction of RMB18m

    31 March 2014: First USD import reimbursement financing deal

    27 January 2014: First trade financing deal

    14 April 2014: First FTZ cross border cash pool

    30 June 2015: First Cross border borrowing under FTE account

     

    To date, DBS Bank (China) Ltd. Shanghai Pilot FTZ Sub-Branch has provided the following products and services to our clients:

    - Account opening (includes all kinds of free trade accounts FTA)

    - Provide LC financing business

    - Handle interbank reimbursement financing

    - Assist with RMB cross border borrowing transactions

    - Assist with RMB cross border lending transactions

     

    As a leading bank in Asia, DBS is committed to leverage our vast Asian network and experiences in Singapore, Hong Kong and across the region to help customers understand and seize growth opportunities from the development of the FTZ, RMB globalisation and interest rate liberalisation.

    Established in Shanghai on 29 September 2013, the China (Shanghai) Pilot Free Trade Zone is China's first Free Trade Zone. The establishment of the FTZ is a major milestone in China's economic reform and development. The new initiatives taken in the FTZ are aimed to inject energy to the long-term development of the economy and it is seen as an important step to develop Shanghai into a global financial center.

     

    After the financial crisis, China has entered into a new phase of economic growth. During this period, some byproducts of high GDP growth began to emerge, causing many problems that have forced China to carry out structural reforms to achieve long-term development goals. The FTZ therefore serves as a testing ground for the country's economic reform, where economic policies are tested before they are rolled out on a national level. In the long run, China hopes to achieve economic revival and sustainable development through the FTZ.

     

    The FTZ occupies 28.78 square-kilometers, which is about the size of Macau. To integrate sea, air and over land logistic, it comprises four bonded zones, including Shanghai Waigaoqiao Bonded Zone, Waigaoqiao Bonded Logistics Zone, Yangshan Bonded Port and Shanghai Pudong Airport FTZ.

Services

    Through our dedicated management and service teams, we provide a wide range of commercial and corporate banking services for you. To us, cash management service is not just about collecting and making payments, but comprises a full range of tailor-made solutions that help you better plan and manage your cash flow and savings. Through ensuring liquidity, we are committed to help you maximize your returns.

     

    Our cash management solutions include account service, collection and payment service, liquidity management, short-term investment management, and financial risk management. This range of products and services are specially designed to help you achieve and maintain optimal cash flow.

     

     
    Description
    Benefit for Clients
    Account Services

    Residents in FTZ could apply for FCY free trade accounts through DBS to manage separate accounts.

    Funds in residential free trade account (FTA) could be freely transferred between overseas account, on-shore NRA beyond FTZ, non-residential free trade account (FTN) and other FTA.

    Liquidity Management

    DBS Bank (China) Ltd. Shanghai FTZ Sub-Branch provides the following liquidity management products and services for residents:

    1. Entrusted Loans
    2. Time Deposit, Term Deposit, Contract Deposit
    3. Cash Pooling

    Compared with time deposit, term and contract deposits are more flexible in term arrangement, thereby providing more funding arrangement solutions.

    Conglomerates are able to perform cross-border RMB cash pooling by connecting their on-shore, offshore, FTA and FTN accounts through their FTZ entities. This greatly saves financing costs for businesses, allowing more efficient use of capital.

    Electronic Banking Services

    DBS Online Banking IDEAL™ provides for clients:

    1. One-stop online banking solution
    2. Highest security standards to ensure the confidentiality of financial and transaction information
    3. Customized online banking solution

    DBS Online Banking IDEAL™:

    Enables businesses to initiate transactions online and offers real-time transaction status tracking

    Allows 24-hour access to transaction details and statistical reports

    Provides high quality PDF reports for businesses

     

    In addition to cash management, we have also been creating other cutting-edge financial products and services in the FTZ, including those pertaining to trade in goods and services, as well as cross-border investment and financing. We leverage DBS Group’s strong presence and connectivity in Asia to provide for you total trade financing solutions that better meet your capital requirements and other special needs.

     

    Traditional Documentation

    DBS enjoys high credit rating around the world. We can support you in your bidding projects in various different markets and help you expand your business:

    • Bank Acceptance Draft
    • Banker's Guarantee
    • Letter of Credit
    • Collection

     

    Credit Trade Financing

    We provide working capital financing, extend days payable outstanding, shorten account receivable period, and minimize credit risk:

    • Accounts Receivable Financing
    • Accounts Payable Financing
    • Factoring
    • Supply Chain Financing

     

    Structured Trade Financing

    We assist businesses in the import purchasing and domestic procurement of raw materials at competitive prices, and provide RMB and other foreign currency financing:

    • Inventory Financing                  
    • Back-to-Back Letter of Credit

     

    As the FTZ continues to open up with more innovative financial products to be released in the future, fluctuations in exchange and interest rates will give rise to more risks for businesses. We can help your company hedge risks and strengthen risk management through our cutting-edge products and services.

     
    Description
    Benefit for Clients
    Total Solutions for Regional Headquarter / Treasury Center

    Companies can consolidate account management by opening both normal and FTZ-related accounts with DBS Bank (China) Ltd. Shanghai FTZ Sub-Branch.

    In the FTZ, companies can go through just one bank to complete all relevant procedures that required several banks to administer in the past. This will encourage businesses to consider developing "headquarters economy" in the FTZ and implementing the "capital management centre" model.

    Based on different market needs, companies can select the most cost-efficient market to obtain capital at the lowest cost.

    In the FTZ, companies can go through just one bank for account management, thereby simplifying the controlling procedure, achieving cost saving on financial management and shortening turn-around time.

    Commodity Trading / Hedging

    The FTZ will attract foreign investors to participate in onshore futures trading. At the same time, Shanghai International Energy Trading Center will be setting up a branch in the FTZ to engage in energy derivatives trading, settlement and clearing.

    DBS China can provide tailor-made solutions in commodity financing and hedging for clients.

    Total Solutions for Onshore and Offshore Interest and Exchange Rate Risks

    RMB convertibility and interest rate liberalisation will be tested out in the FTZ. Based on changes in the FTZ policies, we will be launching a wider range of interest and exchange rates related solutions for clients.

    Through our wide range of solutions, we can help clients manage the increasing risks that result from interest and exchange rates fluctuations.

     

    In the recent years, the local government has been encouraging domestic enterprises to expand abroad, bringing about many opportunities for DBS to capitalise on our competitive advantage as the leading Asian bank. As a bank born and bred in Asia, DBS understands the intricacies of doing business in the region’s most dynamic markets, and through our extensive network in Asia, DBS is able to provide a variety of cross-border services for state-owned enterprises, large private enterprises and small-to-medium enterprises that are looking to expand overseas. In addition, DBS also provides one-stop products and services, including cash management, trade financing, cross-border and online banking services, debt issuance, as well as IPO services.

     

    Business areas pertaining to the internationalisation of RMB are where our strength lies. With our strong RMB capabilities and presence in markets such as Singapore, Hong Kong and Taiwan, we can support you in your offshore RMB products and services seamlessly.

     

    Extensive and in-depth industry knowledge

    Commodities

    Energy, Chemical, Infrastructure

    Property

    Sea, Air and Land Transport

    Media, Communication, Technology

    Financial Institutions

     

    Tailor-Made Financial Solutions
    Global Transaction Services
    Treasury & Markets
    Financing
    Advisory
    • Cash Management
    • Trade Services
    • Foreign Exchange
    • Interest Rates
    • Commodities
    • Derivative Products
    • Trade Financing
    • Asset Financing
    • Project Financing
    • Loan Syndications
    • Debt Capital Markets
    • Equity Capital Markets
    • Mergers & Acquisitions

     

    We strive to become your best partner in cross-border wealth management, providing you with tailor-made onshore and offshore products and services, and helping you seize the opportunities brought about by the FTZ.

     

    Cross-Border Personal Banking Products and Services in the FTZ
    Fixed Term Deposit Rates for Foreign Currencies in the FTZ

    DBS Bank (China) Ltd. Personal Banking offers attractive foreign currency time deposit rates based on a cohesive consideration of factors ranging from current market rates to FTZ policies. We offer the following competitive rates to our customers:

    • 2.5% p.a. for 6-month USD time deposit
    • 4.6% p.a. for 6 month AUD time deposit
    • 2.2% p.a. for 6-month HKD time deposit
    • 1.8% p.a. for 6 month SGD time deposit

    Suitable clients: Residents that have been in operation in FTZ for more than a year

    Note: DBS reserves the right to alter RMB and/or foreign currency deposit rate at any time it deems necessary, actual rates are subject to the latest applicable rates posted by DBS at the time of deposit.

    Currency Pair

    Enjoy RMB and foreign currency time deposit preferential interest rates at the same time.

    For more information, please visit http://www.dbs.com.cn/personal/deposits/currency-pair.page

    As new policies are rolled out, we will introduce new innovative solutions for our clients.

     

    DBS Treasures Cross-Border Wealth Management Services
    Cross-Border Wealth Management

    Through DBS Treasures, we provide you with easy access to the global market and diversified investment choices. Together with our team of experienced investment professionals, we can help you invest in various types of global markets, including equity, bonds, and money markets. With our flexible investment plans, you may choose to invest in lump sum or with a regular saving plan.

    Cross-Border Account Management

    Join us today as a DBS Treasures client (with an average daily total assets value of RMB 400,000 and above in DBS China) and enjoy priority service and exclusive privileges throughout Asia. When you sign up with us as a DBS Treasures client in DBS China, you’ll be entitled to upgrade to or open a DBS Treasures account in all our overseas branches (Hong Kong, Taiwan, Singapore, India, and Indonesia) to enjoy the privileges without local minimum assets requirement.

    Asian Service

    Enjoy a waiver of outward remittance handling fees from your DBS Treasures account to any DBS account in other Asian regions (Hong Kong, Taiwan, Singapore, India, Indonesia).

    Cross-Border Privileges

    With a China-issued DBS Treasures Debit card, there will be no service charges for cash withdrawals at ATMs around the world that accept Union Pay cards. Enjoy special discounts at selected merchants with your DBS Treasures Debit Card wherever you go*.

    * Debit card daily transaction limit will be set by People's Bank of China and China UnionPay, and will be enforced based on standards put in place by the issuing bank.

    * For more information, please contact any DBS branch or relationship manager in China.

     

FTZ FAQ

What are the major breakthroughs that the FTZ policies bring about?

Financial innovation and trade facilitation

What are some benefits to residents in the FTZ?

Residents in the FTZ are able to enjoy the following benefits: competitive regulatory and tax environment, offshore financial services, as well as simplified administrative and logistic processes.

Which businesses should consider setting up entities in the FTZ?

Benefitting businesses include:

  • Multinational companies
  • Domestic exporting companies
  • Companies intending to invest overseas
  • Logistics companies
  • Financial leasing companies
  • Commodity traders

What is the background of the FTZ?

In the recent years, the US, Europe and Japan have signed several agreements from the new round of multilateral trade negotiations. These agreements are poised to replace the current WTO rules to become the new set of rules for global trade. In light of this, China is also actively seeking to join these trade negotiations to open up its economy further. On top of this, China's economy has been impacted negatively by a dramatic drop in exports in the recent years, and has also been facing slow growth in domestic demand and excess capacity problems in the midst of economic restructuring. As such, China's economy urgently needs an "economic booster" to bring about China's economic recovery and greater economic performance, and this is how the FTZ came about.

What is different about the services offered in the FTZ in comparison to those offered outside of the FTZ?

Residents in the FTZ are able to enjoy a wide range of services in accordance with the FTZ policies. For instance, cross-border RMB loan, cross-border RMB two-way cash pooling, etc. As regulatory bodies continue to roll out new policies in the FTZ, more innovative financing products and services will be launched in the zone. This will attract more businesses to set up entities in the FTZ to enjoy the privileges offered in the zone.

All contents on this webpage are subject to the understanding of regulations and policies regarding the FTZ announced by the government and may be updated from time to time based on newly released regulations (if any). DBS Bank accepts no liability whatsoever with respect to the use of its contents.

Visit us

Visit us

No. 88 Ma Ji Road, Blk 3 Level 1, The Headquarters Peak Collection, China (Shanghai) Pilot Free Trade Zone, Postal Code:200131 Tel :86-21-3896 8001 Fax:86-21-5090 5298

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Awards

Best Foreign Cross-Border Cash Management Services

Best Foreign Cross-Border Cash Management Services as voted by Medium & Large Corporates in China 2015

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