China has very strict rules related to taking money in and out of the country. These rules regulate the actions of individuals who are attempting to move money in and out of China.
There are different rules for local residents and foreigners.
It is vital to stay compliant with these rules to avoid sanctions or other adverse legal consequences.
Use of Cash in China
Many vendors in China readily accept other forms of payment, such as cards or mobile payment.
Increasingly across the world, cash is used less and less. It is seen as being riskier, subject to theft and destruction. The use of cash is particularly less used in urban areas in China.
However, there are times when technology fails or a small vendor may not be set up to accept other forms of payment when cash must be used.
Move Money In and Out of China -Rules and Restrictions
There are a variety of restrictions regarding the amount of money you can bring into the country, as well as how much you can take out of it.
Generally, travelers can take the equivalent of $5,000 US of foreign currency out of the country. They can take local currency of 20,000 RMB in or out of China.
This limit is applicable to local residents and foreigners. This is the general allowed amount and does not require any additional action. This amount does not need to be declared with customs.
Travelers can sometimes take out more than this designated amount, but this will require additional steps.
For cash transactions up to the limit of $10,000 US, you will need a special permit that provides you with permission to bring in or take out the money from the country. A bank issues this permit.
If your transaction involves more than $10,000 US, you will need to obtain a special warrant from the State Administration of Foreign Exchange.
Customs will examine any declaration record of foreign currency when a person enters China before it authorizes admission to the country.
Because these regulations can be complicated, many people rely on service providers of strategic consulting services to help them remain compliant with these rules.
There are additional limits if people quickly exit China. Individuals who exit the country twice within fifteen days of each other are subject to a cap for foreign currency of $1,000 US. If the traveler leaves China twice in the same day, the cap drops to $500 US.
Limits that Apply to Cash Withdrawals from Bank Cards
Foreigners must also be aware of rules regarding the move of money in and out of China from their bank cards.
Foreign currency restrictions have become more heightened in recent years, including when a Chinese bank card is used.
The State Administration of Foreign Exchange limits the amount of overseas ATM withdrawals at 100,000 RMB per person per year. These restrictions were imposed to prevent the nefarious use of cash, including funding terrorist activity, money laundering and evading taxes.
If a person makes withdrawals that exceed this annual cap, his or her overseas withdrawals can be suspended. This change does not affect the daily limit of withdrawals.
Purchasing Currency in China
You may wish to buy currency while in China. However, it is important to know that there are different rules for foreigners and locals.
Rules for Non-Nationals with a Work Visa
Non-nationals who have a work visa are permitted to purchase a greater value of foreign currency than tourists. These individuals may purchase up to $500 US in foreign currency each day at the bank.
To complete the transaction, they must meet several conditions, including the following:
- The non-national has a visa that allows him or her to legally work in China.
- The non-national must provide documented proof of where their money came from, like working for a Chinese employer
The non-national will also need to bring relevant documents that show their identification and eligibility for the transaction, including the following:
- Valid identification card
- List of income issued by the company
- Tax bill
- Employment contract
Additionally, there may be further restrictions depending on which country the non-national is traveling to. The destination country may have regulations about how much cash can be brought into it that may be lower than the amount that China allows to leave the country.
Rules for Chinese Nationals
Chinese nationals are subject to a cap of purchasing up to $50,000 US in foreign currency at financial institutions each year.
As long as the amount of a daily withdrawal is less than $10,000 US, you can finalize this transaction at the local bank. However, if the amount exceeds this amount, the State Administration of Foreign Exchange finalizes the transaction.
Performing International Transfers in China
Some individuals may prefer to complete an international transfer in or out of China instead of using cash.
There are differences for the procedures and regulations regarding local residents and foreigners.
International Transfer Rules for Non-Nationals
The legal income that a worker has earned in China that is in their account can be transferred overseas without any imposing limitations.
However, the foreign national will have to provide proof that the source of the money is legal and legally obtained through income in China.
International Transfer Rules for Chinese Nationals
Chinese nationals can make an international transfer up to a daily limit of $50,000 US. This transaction can be finalized at the local bank.
However, if the transaction exceeds this amount, the Chinese national is required to present proof of current expenditures.
Seek Assistance for Help Understanding Move Money In and Out of China Rules
As you can see, the rules related to moving money in and out of China can be complicated and specific to your immigration status and other factors.
It is important to remain compliant with these rules to avoid unintended consequences.
When you trust your business to New Horizons Global Partners, we can help you with every aspect related to compliance and financial regulations.
Contact us today to learn more about how we can help your business.