China has strict control on remittances abroad. To transfer money out of China, one needs to have proper legal reasons.

How to transfer money out of China?

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Understanding Money Transfer Regulations in China

When it comes to transferring money out of China, it’s essential to navigate through the stringent regulations imposed by the country. China maintains strict control over remittances abroad, necessitating valid and legal reasons for these transactions.

We will try to clarify some rules in this article to help you in this subject.

Channels for Money Transfer out of China

Image with Chinese Yuan coins stacked on the left, a 100 dollar bill on top of two 100 yuan bills in the center and top and a keychain showing the American continent on the right foot.

Goods Import

If a China company imports goods in an official way and declares them in the customs system, the money at goods value can be wired to the overseas supplier. This channel is widely used by businesses for their international procurement needs.

Services Import

For China companies that acquire services from overseas, they can pay the overseas service providers after withholding taxes of VAT and CIT on their behalf. Individuals can also pay overseas for personal reasons such as tuition or family support, but there is a limit of USD 50,000 which can be bought by RMB in a year. This method facilitates international service exchanges and personal foreign payments.

Capital Investment to Abroad

If a China company gets the official approval to invest in other countries or regions, it can wire the funds abroad within the quota fixed in the investment amount. This option is essential for Chinese companies expanding their footprint globally.

Dividends Distribution and Salary Remittance

The foreign investors can receive dividends paid to them from their China subsidiaries in profitable situations. Expatriates working in China can also wire their salary out of China with their tax proofs and valid work permits. This provides a legal pathway for profit repatriation and personal earnings transfer.

Navigating the complexities of money transfers out of China requires understanding the legal channels and compliance requirements. Whether for business or personal reasons, adhering to these regulations is crucial.

Stay informed with Cathytax for more insights on financial transactions and business practices in China.

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