I have helped several individuals get money out of China, and several other countries, quickly and hassle free. This is especially the case if they have a Visa or MasterCard, but I have also managed to do it for people in other situations.
This article also discusses potential tax problems if you send too much money to your country of origin as an expat.
I partially wrote this article after reading a lot of misleading and outdated things on online Q/A websites such as Reddit and Quora.
One of these misconceptions is that it is easy (and cheap) to go to a local bank, provide a few pieces of documentation, and they are good at knowing the various procedures for getting money out of China.
This article is long and extensive. So for the time-poor who are looking for superior ways to get money out of China, please contact me here at advice@adamfayed.com, or if you have any questions about this article or financial planning questions in general.
I will continually update this article as the years go by, and some of the information might therefore be outdated.
The most recent update was made on Nov. 7, 2022. Previously, it wasn’t possible to move money out of China via investments if you used a UnionPay card.
I now have a solution for this issue.
The Whys and Outlook of Getting Money Out of China
Firstly, why do Expats and locals want to get money out of China?
One of the biggest issues expats in China faced in 2021 is getting money out of Mainland China. Many expats come to China for relatively short term assignments, and few plan to stay for more than 10 years. Even if they do, the majority do not want to contribute to a Chinese pension plan.
This is becoming a bigger issue, as the days of the “career expat” are largely gone.
In other words, people being sent to one location for a decade or more, is becoming rarer.
So with the exception of expats running their own businesses, more foreign workers are being moved every 2, 3 or 4 years.
It isn’t just expats though. Many Chinese returnees and other locals also face the same issues and have been investing in international real estate and stock markets for years.
The situation has accelerated though, with the trade war and a depreciating RMB. As a result of this, many local Chinese are also looking at ways to get RMB outside of China and into USD.
Indeed Bloomberg has reported on why so many people want to get money out of China, and the situation has become more and more apparent as 2021 commences
It is true that for relatively small amounts of money (less than 20,000RMB) it is possible to take it home with you without declaring it to customs on your next flight home. Taking so much cash with you isn’t particularly safe though, and isn’t an option at all for larger amounts.
There are numerous ways you can send money out of China. This article will review some of the best options in the market and answer some frequently asked questions.
How to Receive money from China
There have been new developments in March-April 2020 for moving money out of China.
AIUM announced in April 2020 that it would be joining the market in China.
They have partnered with Geoswift, to enable overseas customers to remit money to China.
This is more of a solution for remitting money to China though, as opposed to moving money outside the country.
The partnership should eliminate some hassles though, by ensuring the banks are sidelined.
What’s the situation like in June-July 2021?
It is getting more difficult to get money out of China in 2021. The regulators are cracking down on using Bitcoin and other means to get money out of the country.
It is also getting trickier for Chinese firms to do IPOs on the US stock exchange, which might be a sign of a wider trend.
How has the situation progressed in 2022?
The wealthy in China are transferring their money to Singapore. Wealthy Chinese are becoming more and more concerned about keeping their money on the mainland, and some view Singapore as a safe haven.
Rich Chinese have looked for other locations to hide their cash since protests rocked Hong Kong’s economy in 2019. Singapore’s sizeable Mandarin Chinese-speaking population plus the absence of a wealth tax, in contrast to many other nations, made it attractive.
It has become a trend in the last year following Beijing’s abrupt squeeze on the education sector and emphasis on “common prosperity”— moderate wealth for all, as opposed to just a select few. This surfaced in the conversations CNBC had with companies in Singapore that assist affluent Chinese people in transferring their assets to the city-state through the family office structure.
A family office is an independently owned business that manages investments and wealth for a wealthy family. A family office in Singapore normally needs at least $5 million in assets to establish itself.
Family offices have been utilized by many billionaires to manage their money across the globe. Singapore’s appeal also stems from its position, which puts potential investors close to other Asian investment prospects.
According to the Economic Development Board of Singapore, there were roughly 400 family offices in the country in 2020. Since the end of 2021, the authority has not updated the number.
According to CNBC, local firms helping with family office installations in Singapore estimate there may be hundreds more right now.
Do you think getting money out of China will become harder in the future?
Many people tell me that they want to get money out of China in 2-3 years, because they want to buy a property or do something else with the cash, but are worried about whether sending money outside will get harder in the meantime.
The truth is nobody knows the future for sure, but the Chinese Government does seem to be getting more authoritarian on these matters.
As the RMB is weakening, moreover, it seems that more local Chinese are trying to send money out of China.
It wouldn’t be surprising if sending money outside the country became harder, so delaying doesn’t seem sensible.
With the current political climate, the RMB could fall much further. Certainly most economist expect it to weaken further. Besides, the banks in China give low interest rates like the rest of the world. Leaving money in RMB in the bank is money to inflation and probably currency depreciation.
In 2018, several currencies have depreciated much more rapidly against the USD than the RMB, including in Turkey and various South American countries.
Nobody can know for sure what will happen in 2021 and the longer-term future, but a steep depreciation by the end of next year is a distinct possibility.
Already on October 31, the Chinese RMB to USD exchange rate was trading at 6.97, which is the weakest level since 2008. If the Chinese Central Bank allows the RMB to depreciate past 7:1, a sharper depreciation may happen.
Nobody knows the future. However, this uncertainty is probably one of the biggest reasons why the USD is strengthening in turbulent times.
Could the RMB recover in 2022-2023?
Of course the RMB could recover. It could even strengthen, as it has in 2020 to a certain extent, but given the current situation, the overall trend seems downwards.
At least that is a huge risk.
The RMB is also projected to remain weak for the rest of 2022 before a potential recovery in 2023. That’s the likely scenario if China stays on course for an economic rebound.
What are the rules and restrictions for getting money out of China?
Both the quantity of money you can bring into the nation and the amount you can take out are subject to a number of restrictions.
In general, visitors are permitted to carry out of the country up to $5,000 in foreign money. They are allowed to bring or take out of China local cash worth 20,000 RMB. Foreigners and native residents are both subject to this cap. There is nothing more that can be done because this is the maximum permitted quantity. No customs declaration is required for this sum.
The amount that travelers are allowed to withdraw may occasionally be exceeded, but doing so will involve extra measures.
You will require a special permit given by a bank that gives you authorization to bring in or withdraw money from the nation for cash transactions up to the maximum of $10,000. A special warrant must be obtained from the State Administration of Foreign Exchange if your transaction is worth more than $10,000.
When someone enters China, Customs will check any records of foreign currency declarations before granting entry.
Due to the complexity of these requirements, a lot of individuals rely on service providers of strategic consulting services to assist them in adhering to the laws.
Those who leave China swiftly face increased restrictions. The amount of foreign cash that can be taken out of the nation on a second departure within 15 days is limited to $1000. The cap is $500 when leaving the country a second time on the same day.
How to Get Money Out of China for Individuals
Via Hong Kong
Some expats try to get RMB out of China through Hong Kong. However, some of the methods used to do so aren’t cost effective. Time is also money, so taking a flight to Hong Kong from Shanghai, Shenyang or Beijing to get money out of China, doesn’t make any sense.
Even if you live in Shenzhen, going to HK will take a day. Moreover, unless you have HKID, it isn’t always easy to open up a bank account. In which case you need to use a money changer, which doesn’t make any sense.
This is because you will be left with cash in your hand, and then you will still need to transfer the cash, and it isn’t easy or safe to change considerable amounts of money. Assuming you are preaching the 20,000 RMB allowance, you could also be stopped at customs using this method.
With the current troubles in Hong Kong, this option seems even more difficult than 6 months ago.
Transferring Money out of China: International Transfers
Some people might favor making an international transfer into or out of China over paying with cash.
There are distinctions between locals and visitors in terms of the processes and laws.
Rules on International Transfers for Foreigners
There are no restrictions on the transfer of the legal income that a worker has earned in China and has in their account to another country.
However, the foreign person will need to show documentation that the money’s source is legitimate and that it was received through legitimate means of earning in China.
Rules on International Transfers for Locals
Chinese nationals have a daily transfer cap of $50,000 US that they can use for international transfers. You can complete this transaction via a local bank.
The Chinese national must provide evidence of recent expenses, nevertheless, if the transaction exceeds the given cap.
Sending Money out of China Via Western Union
You could also send money out of China by Western Union. One can see why this is an attractive option, because Western Union have branches even in small Chinese cities.
However, the fees and currency rates are terrible, meaning that you are often paying 7%-10% to send your money if you include the direct and indirect cost.
Western Union only charge $15-$30 for the transfer typically, but added to a bad currency rate, this is an expensive option. Companies similar to Western Union might say they are commission free, but the conversion rates are a killer.
In addition to that, it isn’t always very practical to send money via Western Union.
I met countless expats in China, whose family literally had to collect the money at the other side!
Sending Money out of China Via Chinese Bank
Another way is via a bank account. Banks in China typically have better currency rates than Western Union and their competitors in the West. However, as a foreign-national, you often have a $500 per time limit. This low limit, like Western Union, means it is also expensive, as even a $25 fee is 5% of the transfer, and then you have other small fees, such as the 1%-2% indirect currency charge.
If you have a close Chinese friend, they can send up to $50,000 a year to you. By putting the money in their bank account, they can send money to you. The ability to spend more money at once means the fees are lower. As an example, if you send $10,000 per time, you may have a $30 one off bank fee. Added to the 1%-2% exchange rate fee, indirectly it is costing you 1.3%-2.3%. If you only send $2,000-$5,000, the charges could top 3%.
Ultimately, sending money to your home country isn’t always the best option and 1%-3% every time adds up. Look at it this way. If you are sending money home to contribute to a pension, you are paying 1%-3% before you add the fees for the investment.
Or another way to look at it is instead of investing $100,000, you may only have $97,000 to invest. If your investments go up by 10%, that is the difference between $110,000 and $106,700! Every year for 10 years, that really adds up – could be $50,000+ compounded.
That isn’t to mention there are certain ramifications of sending too much money home. In the UK, as an example, you can only ` earn` 3,000 Sterling from gifts every year. If you are using a Chinese friend to send money on your behalf, this may be considered a gift. Even though they are essentially using your money, as you are just using them as a gateway to funnel your own money into the country, their name will appear as the sender.
Many banks automatically inform HMRC about any payments above 5,000 Sterling or any potential suspicious payments. Even if you haven’t done anything wrong, too many payments from overseas gets flagged. You may therefore need to prove you are really an expat, to avoid tax on the money. Australians, Canadians and other expats face similar issues.
Another issue with the banks is, they often refuse to send money outside of China, if you are paying for something which isn’t in your name.
In other words, if you want to pay for a deposit on a house, or anything else that isn’t a bank or investment account in your name, you might be refused.
Sending Money out of China Via Bitcoin
Bitcoin might not have the best reputation in the world, but it is possible to send money out of China using Bitcoin. Needless to say, however, the highly volatile nature of bitcoin, which can fluctuate by 25% in a day, means that it shouldn’t be used to transfer money overseas.
Interestingly, China owns $6 billion worth of crypto, after it seized 194,000 Bitcoin, 833,000 Ethereum, plus other cryptocurrencies from a blockchain project scam.
However, the Chinese Government is cracking down on Bitcoin payments. In 2017, they banned Bitcoin exchanges, meaning it is difficult to buy and sell Bitcoin in RMB.
After the ban, some people have stated some peer-to-peer exchanges to get around the ban. The process isn’t easy, however, and the coins are still too volatile to use to exchange money without significant losses being a possibility.
Sending Money out of China Via PayPal
PayPal is one of the oldest methods for sending money out of China. It is a viable option, but the fees are once again the big issue. There are also many processes involved here, like setting up a separate Chinese PayPal account.
This PayPal account should be linked to your Chinese bank account. You can then send money from your Chinese PayPal to your UK or US PayPal, although there are several steps you need to take to make this happen.
The total fees can be high because you are paying for the international transfer (typically 0.5%-2%) plus the currency conversion.
Sending Money out of China Via Investing
A better option is to invest overseas in USD, Euros or Pounds when you are living offshore. In the same way that ISAs were originally designed for UK nationals living in the UK to save and invest in a tax efficient way, the UK overseas territories like the Isle of Man were originally designed to allow expats to invest whilst they live overseas.
Expats living overseas have options available to them from locations such as Hong Kong and the Isle of Man, which are much cheaper than other options they have, and especially cheaper than incurring the costs of sending money home via one of the aforementioned vehicles.
This is particularly a great option for expats who have Visa and other international cards, because often the premiums can be taken out from RMB and converted to USD or GBP.
Another advantage of this option is speed. I have helped clients set up accounts in 48-72 hours, and all the documents can be done online.
Sending Money out of China Via Property
Many Chinese and expats living in Mainland China are interested in property overseas property in the US, UK and many other countries.
There are a few currency companies I am aware of that have excellent currency exchange rates, for people who are looking to send money out of China in a lump sum.
Given the fees involved, however, this option is only good for people who have 40,000GBP (about $55,000) or more to send as a lump sum. Using a currency company for monthly investments isn’t a viable option.
I have seen several people buy a property using this method to pay for a deposit on a house.
Via Gold, Silver, and Precious Metals
Gold and other precious metals might be used to transfer money into and out of China, albeit a bit inconvenient. Both locals and foreigners can frequently purchase actual gold in China in jewelry stores or banks.
Make sure to declare any amount of gold you bring into China or import at customs, and maintain a copy of the record or receipt. There are severe customs regulations regarding how much gold, silver, and other precious metals are allowed to be brought into China, but there are no restrictions on how much can be taken out. If you decide to leave, being able to get your money out will depend on having proof of how much you took with you.
Be mindful of customs regulations if you decide to take gold, silver, or other precious metals out of China with you. In general, you are not required to report precious metal goods that weigh less than 50g (2 ounces).
If you do choose to bring precious metals on your trip, make sure to save all of your receipts for the exit check.
Last but not least, please verify the most recent customs laws before leaving to guarantee a smooth journey.
Sending Money out of China Via Alipay
Speaking of Alipay, it’s clear from reports from numerous tourists and expats that this procedure isn’t perfect. It appears that not all accounts allow transfers via Alipay successfully, but there is no obvious reason why this happens to such accounts.
Only Chinese citizens are permitted to send money through the Alipay app. If you attempt to use your personal account, you will be prompted to register a Chinese ID. If you don’t possess one, you can ask a trusted Chinese acquaintance to assist you with the transfer.
30,000 RMB is the maximum sum that can be wired in a single transaction. Two foreign transfers with a combined maximum value of 60,000 RMB are permitted per day.
You will be charged 50 RMB by Alipay for each transfer, and the receiving bank will charge you an additional fee when it receives it.
Chinese nationals are only permitted to transmit $50,000 abroad each year. You may need to enlist the aid of multiple and trusted Chinese pals if you are fortunate enough to be wiring amounts this size back home.
The institution of the beneficiary bank will determine the turnaround time for an Alipay transfer. After sending the money via Alipay, confirm receipt with the recipient or get in touch with your home bank to find out how long it will take for the money to arrive.
If you’re wondering why your Alipay transfer got rejected, well several factors could lead to the rejection of a transfer. Alipay may assume that taxes have not been paid on this money as required by Chinese law, or there may be a mistake in the bank routing or account numbers, a restriction on the person initiating the transfer, or all of these.
In any case, there is no known means to learn the reason a transfer was denied from Alipay, and Alipay itself doesn’t provide such data.
How about new means like Swapsy?
One of the newest options on the market, Swapsy offers low-cost transfers. It is a peer-to-peer platform, so verified users can exchange currencies on the platform, via WeChat, Alipay and other e-wallets.
So in practical terms if you are based in China and want to transfer money to a foreign currency, you don’t literally send money outside of China.
Instead, you send RMB to another user that has a Chinese bank and they send to your foreign bank account.
The currencies will be received within 24 hours. The transaction fees can be as low as 0.5%.
To use it, you merely have to see what exchange rates are available when you are logged in, send the money with the code which is given and verify the transaction.
I haven’t personally used this platform, but I do hear some positive reports from users about how easy it is to operate.
The only main negative about the app is that there needs to be a reasonable number of users on the platform, on all currencies, for the app to function properly.
Moreover, you can’t always exchange the exact amount of money you want. It all depends on what the other users want.
As it is a peer-to-peer platform, some trust is part of the system. Having said that though, each user needs to be verified, with proof of ID, address and so on.
So there is no incentive for somebody to break the law, when everybody is verified.
Finally, the limits aren’t always high. They might be higher than Chinese banks, but it isn’t practical to send $200,000 to buy a property or an investment product.
For such larger purchases, some currency companies can be more competitive.
There have been reports that Alipay no longer works and Swapsy is only a good solution for some nationalities like Americans.
Does Wise work in China for getting money out?
Technically speaking, Wise is legitimate in China. However, you are unable to send money from Chinese yuan (CNY) at this time using a bank transfer or credit/debit card.
You can only send money to private individuals from your CNY balance and transfers to businesses are currently not supported.
Specifically, for your personal account, you can only send CNY to private individuals that have any of the following:
- UnionPay bank card
- an Alipay ID
- Weixin ID
Since Wise cannot send CNY to accounts opened with a passport, driver’s license, or military ID, they must have opened their bank account using a Chinese national ID card. You also cannot use your personal account to send CNY to businesses.
You can send CNY to a business recipient in China who has a business account in CNY if you have a Wise business account.
- Wise does not yet support business transactions to Weixin and Alipay recipients.
- You can transfer money from a business account to a personal account in China using UnionPay.
You will require the recipient’s full name in PinYin (A-Z) and their 16–19 digit UnionPay card number for UnionPay recipients. Wise must know the address of your UnionPay receiver if you are sending money from USD to CNY.
You will require the recipient’s full name in PinYin (A-Z) only, together with their Alipay ID or Weixin ID, for both Weixin and Alipay transactions.
You will require the recipient’s full name (in Latin characters only), bank account number, BIC/ SWIFT code, and Chinese address for business receivers. Their bank account must be denominated in CNY and must be a business account based in China.
Getting money out of China for Chinese in 2024
For returnee Chinese with foreign passports, it is often easy to get money out of the country. Ultimately, China doesn’t allow joint passports. So returnee Chinese with foreign passports are legally expats, even though they were born in China.
For local Chinese, as mentioned previously, it is possible to send $50,000 worth out of China in a lump sum mechanism. All such accounts can be done online or via physical application forms, with some of the larger institutions that are available through brokers .
For Chinese people who want to invest more than $50,000, one of the most effective ways is to invest a further $500-$700 a month through a regular savings plan.
The reason why this is effective, is that the money is taken out of RMB and put into a USD account. Therefore, it seems more like a bill payment, rather than an investment. It is only when premiums become much higher, than the banks start asking questions and/or the credit or debit card limit has been reached.
With that being said, it is via easier to send money outside of China using Visa or MasterCard, than UnionPay.
The majority of Chinese sending money outside of China are middle-class consumers who have access to these international credit and debit cards.
Some Chinese people are worried about their information automatically being shared with the Chinese tax authorities, and then rules being applied retrospectively.
In other words, the laws are changed relatively recently to only allow Chinese people to send $50,000 overseas, and the Chinese authorities apply a retrospective tax to people who used the previously $50,000 allowance. This is unlikely to be an issue, and some offshore US territories do not share tax information.
As a final comment, I would say that the situation is different for businesses. Companies that want to repatriate their capital outside of China can do it using various ways. It also isn’t simple, but more options exist compared to those options available to individuals.
How can a business move money out of China?
Sending business funds out of China is typically justified for one of three reasons. The first is in the form of shareholder dividends, the second is in the form of costs or royalties to the foreign parent business, and the third is in the form of an intra-company loan.
Since the third alternative is designed for capital borrowing rather than money repatriation, it is not practical. Law requires the borrowing corporation to reimburse the lender with interest.
Dividends to Shareholders
The Chinese company must pass a yearly external audit by an accounting firm in order to return profits from a Chinese bank as dividends to shareholders abroad. Such audit is performed every year, around the time of the Chinese New Year, generally in April.
As a result, there is just one window of opportunity each year, around Chinese New Year, for sending dividends out of China. All corporate income taxes must be paid in full, and operating losses from prior years must be accounted for, in order to pass the audit.
In addition, if the business hasn’t yet accumulated at least 50% of its registered capital, it must set aside at least 10% of its after-tax income in a reserve fund. The profits of the company may be transferred out of China and into foreign accounts once all these requirements have been satisfied by Chinese banks.
The business bank of your organization will require proof of:
- a copy of the company’s business license
- tax registration documentation for the business
- report on the company’s registered capital injection audit
- the external auditing firm’s annual report
- tax-paying receipts
- for the profit distribution, a resolution from the corporate board
Lastly, there’s the withholding tax. The withholding tax deducts 10% of the amount that is repatriated; however, depending on the nation where the receiving account is located, there may be exceptions due to international treaties. Nonetheless, this represents a 10% reduction in the amount that is repatriated in general.
Dividend payments could take one to two months.
Intra-company Payments: Royalties and Expenses
The use of the company’s trademark in China is also frequently paid for with royalties to the parent company abroad, which is perfectly legal and makes sense from a business perspective. As royalties are exempt from both the withholding tax and the value added tax, this strategy is one that many businesses find appealing.
In many instances, it is also desirable that royalties are often calculated as a percentage of revenue generated.
Another well-liked method for transferring cash from the Chinese organization to the foreign one is through intra-company expenses. This one, however, is subject to VAT, and Chinese authorities will carefully examine transaction records and invoices to ensure that the money is going where you say it is going.
This is the best choice if you are paying for goods or services with an outside company and then collecting payment from a Chinese company.
In China, royalties and other charges are closely scrutinized. Expect to present the bank with pre-drafted legal contracts between the overseas parent company and the company in China, a business license, a tax number certificate, as well as your invoices from China and your invoices from the overseas holding company in order to send out these payments internationally.
How about getting large amounts of money out of China?
Large amounts of money, such as millions of RMB or USD, can be tricky to get out of China, but it is possible with some of the techniques I have mentioned.
If you want to “kill two birds with one stone” investing via a debit or credit card, into USD, Euro or GBP investments is much cheaper than sending money home to invest.
Let’s face it, one of the motivations for expats is to send money home to save and invest. Making two transfers (first home and then to an investment account) isn’t as efficient as one.
In comparison, if you are sending money home just to pay bills, some of the new ways to transfer, such as investment apps and currency companies, offer excellent exchange rates.
They can be excellent alternatives to the banks, if your payments don’t exceed certain limits.
It is highly likely there will be changes in 2025, 2026 and beyond, as the Chinese Government brings out more rules.
In practical terms, that means that techniques that work now, might not always work in the future.
“Striking when the iron is hot” is very relevant here.
Pained by financial indecision? Want to invest with Adam?
Adam is an internationally recognised author on financial matters, with over 760.2 million answer views on Quora.com, a widely sold book on Amazon, and a contributor on Forbes.
