The Remittance Conundrum



Almost all foreigners employed in China run into this problem sooner or later. They are getting paid in RMB and want to send some of their salary back home, either for bills and payments to be made abroad, or to transfer their savings out of China before moving back to their home country.

The hard part? China has limitations in place on how much RMB you can convert into and from foreign currencies, as well as how much money you can send abroad. The related regulations operate under the assumption that the only way a foreigner could have accumulated RMB is by either having previously exchanged foreign currency into RMB, or from legal sources of income in China.

Remitting salary



To remit RMB earned from employment in China, you will need to be able to show the bank that the amount of RMB in question was obtained legally and that all related taxes have been paid up, or was previously converted from a foreign currency into RMB.

You will also need to show the bank your labor contract, work permit, pay slips and a tax certificate saying that tax has been paid on the income – which can be obtained at your local tax bureau. As well, if you have sold real estate in China, you will need to show the contract of sales and again, a tax certificate.

Remitting forex transactions



To convert RMB derived from a foreign exchange transaction, you must provide the receipt issued by the bank when you changed the foreign currency into RMB. However, only a receipt from the past 24 months is considered valid. If the transaction amount on the day in question was less than the equivalent of US$500 in RMB, there is no need to show a previous receipt.

The problem arises when, for whatever reason, you are not able to provide the bank with the above documents. In that case, foreigners are limited to sending the equivalent of up to US$500 abroad per day. Apart from being a hassle, the transaction and exchange fees can add up to a significant amount, cutting into one’s savings in China.

Other options



When leaving China, an individual may bring up to RMB 20,000 in cash across the border, while for foreign currencies, the regulations are similar to those in any other country. Additionally, there is no limit on how much foreign currency one can remit abroad. You can open a foreign currency bank account with a local bank, into which the equivalent of US$5,000 can be deposited per day. If you are able to convert your RMB outside the bank, for example by changing money with a friend, this could be another way to move some of your money abroad.

Otherwise, some foreigners may find success in entrusting a Chinese friend to remit their RMB to a foreign account for them. Chinese citizens may remit up to the equivalent of US$50,000 every year. The Chinese friend may use some or all of this allowance to convert the currency, and send the money to your account abroad.

The Macau Route



In recent years, many Mainland Chinese (and some foreigners as well) have found an illegal loophole to take cash out of the country. As described by a Bloomberg exposé, they use their UnionPay bank cards to make fake purchases at pawn-shops and jewelry stores in Macau. The receipts will say that the customer has purchased an expensive item, whereas in reality the shop owner gives the customer the transaction amount in Hong Kong Dollars or Macau Pataca, the two freely convertible currencies used in Macau. Estimates as to the amount of money funnelled through this channel to date run in the billions of U.S. dollars.