The “outbound personal funds” referred to in this article refers to the behavior of Chinese citizens transferring funds overseas. According to existing regulations and practices, there are six legal paths for personal fund transfers, including individual foreign exchange purchases, external transfers of personal property, overseas cash withdrawal from domestic cards, return investments through special-purpose companies (SPV), QDII investments, and domestic insurance and external loans path. The following will introduce and give tips on the risks associated with the exit of personal funds.
1 Individual foreign exchange purchase
Personal foreign exchange purchase refers to the state’s annual total foreign exchange management of individual foreign exchange purchases within the country, allowing individuals to exchange 50,000 US dollars equivalent foreign exchange annually.
Under the current legal system, individual foreign exchange purchases are mainly used for current accounts and individual capital accounts.
Due to private travel, study abroad, business and business abroad, visiting relatives, medical treatment abroad, trade in goods, purchase of non-investment insurance and consulting services are regular items. Current items can purchase foreign exchange within the facilitation limit. If it exceeds the facilitation limit, provide real and valid vouchers to purchase foreign exchange directly at the bank. If you want to study abroad, you can purchase foreign exchange with the admission letter and tuition certificate of the overseas school.
Under the capital account, individuals’ external investment can only be through specific channels, such as QDII (see below for details). Do not use current accounts to engage in capital transactions, such as overseas house purchases and investments.
The advantages of using foreign exchange to purchase funds abroad are legal and safe, but the disadvantage is that the available amount is small and it is difficult to realize the demand for large amounts of foreign exchange. Since June 8, 2017, SAFE and banks have strengthened the management of individual foreign exchange purchase information reporting. Individuals must fill in the “Personal Foreign Exchange Purchase Application Form.” At the same time, banks have also strengthened the authenticity and cooperation of individual foreign exchange purchases. Regulatory review.
2 External transfer of personal property
External transfer of personal property includes transfer of resettlement property and transfer of inherited property.
Immigration property transfer refers to a natural person who emigrated from mainland China or settled in Hong Kong, Macao Special Administrative Region and Taiwan (hereinafter referred to as “immigrant”) to realize the legal property that he had in China before obtaining immigration status through a designated bank Foreign exchange purchases and remittances abroad.
The transfer of inherited property refers to the act of foreign citizens or residents of Hong Kong, Macao Special Administrative Region and Taiwan region realizing the inheritance inherited in China according to law, purchasing foreign exchange through designated banks and repatriating overseas.
The capital exit through the transfer of personal property to the outside world has the advantages of being legal and safe, and the procedures are gradually becoming simpler. For example, if the notarization requirement for property certification is canceled, it can be remitted in one pass after approval.
Disadvantages are the complicated procedures, the long preparation time for application materials, the involvement of many departments, and the timely exit of funds. In addition, if the subject of the application involves national public officials (including responsible persons of state-owned enterprises) and their close relatives, and the application amount exceeds the equivalent of RMB 1 million, the SAFE will consult the relevant departments such as the Ministry of Public Security and the Ministry of Foreign Affairs as needed certificate.
3 Domestic card overseas withdrawal
Withdrawal from domestic card means that within the withdrawal limit stipulated by China’s laws, cash can be withdrawn directly overseas to realize the exit of funds.
There is a limit on the amount of domestic cash withdrawal from overseas, including annual cash withdrawal and daily cash withdrawal.