Paying a supplier from a Chinese corporate account is the most cost-effective procurement method: domestic bank transfers are instant, documented, and reduce corporate income tax when combined with a fapiao.
Payment methods
| Method | Best for | Tax impact |
|---|---|---|
| Corporate account → supplier account | standard for bulk orders | deductible with fapiao |
| 1688 payment service | small orders and samples | request fapiao separately |
| Personal account/Alipay | samples, small initial buys | not tax-deductible |
| Cash | not recommended | source of funds is difficult to verify |
What a proper procurement process looks like
- agree on price and fapiao before payment, not after
- contract or order with details for both parties
- payment from a corporate account
- send fapiao photo to accountant, store original in archive
- ship goods to a fulfillment center with inspection upon arrival
If you don't have a corporate account yet
It is acceptable to pay from a personal account at the start for initial samples and test batches. However, moving procurement to the company is the first step after opening an account: from that moment, every payment with a fapiao saves 5% in taxes on the amount — how to open an account in 3 days.
Frequently asked questions
Is it normal for a supplier to ask for payment to a personal card?
This is common for small transactions in China, but it is disadvantageous for a buying company: expenses without documents do not reduce taxes and break the audit trail. The solution is either to pay via the 1688 payment service or to find a larger supplier.
What if the supplier only provides a fapiao for an extra fee?
Calculate the costs: the markup for a fapiao is usually 3–7%, while the corporate income tax deduction is 5% of the purchase amount, plus the benefit of clean accounting. If the markup is up to ~5%, the document almost always pays for itself: detailed calculation.
Can I pay a supplier from a personal Alipay and then reimburse myself from the company?
Do not do this: reimbursement without primary company documents does not qualify as an expense, and regular transfers from company to personal accounts attract scrutiny. There is only one correct route: the company pays directly.
Why should I use a corporate account instead of a personal one for supplier payments?
Using a corporate account allows you to document expenses with a fapiao, which reduces your corporate income tax. Payments from personal accounts cannot be verified as business expenses, which breaks the audit trail and leads to higher taxes.
Is it okay to pay for samples using my personal Alipay account?
It is acceptable to use a personal account for initial samples and test batches when you are just starting out. However, you should move all procurement to your company account as soon as possible to begin saving 5% in taxes on your purchases.
Should I pay extra for a fapiao if the supplier asks for a fee?
Since a fapiao provides a 5% corporate income tax deduction, paying a markup of up to approximately 5% is usually worth it. The document pays for itself while also ensuring your accounting remains clean and compliant.
What documents do I need to ensure my procurement process is correct?
You must have a contract or order detailing both parties, a payment order from your corporate account, and a fapiao issued with your company's details. You should send a photo of the fapiao to your accountant and store the original in your archive.