- January 29, 2018
- Posted by: CIP Journal
- Category: Immigration
On December 29, 2017, China’s foreign exchange regulator, the State Administration of Foreign Exchange (SAFE), issued a circular regulating overseas cash withdrawals using Chinese bank cards.
SAFE Circular on Regulating Large Overseas Cash Withdrawals on Bank Cards] (SAFE Circular) effective January 1, 2018, provides that an individual may withdraw no more than RMB 100,000 (approx US$15,530) annually from outside of mainland China.
Individuals exceeding the quota will be banned from withdrawing cash for the rest of the year as well as for the following year.
The Circular also imposes a cap on daily overseas withdrawals, which may not exceed RMB 10,000 (about US$1,555) on a single card, and prohibits evading the restrictions by using cards borrowed from others.
Individuals are prohibited from borrowing others’ bank cards or lending their bank cards to evade or help evade the management of overseas cash withdrawals.
According to SAFE, increasing the restrictions on annual overseas cash withdrawals is a move to prevent money laundering, terror financing, and tax evasion.
As at the end of December 2017, China’s foreign exchange reserves hit USD 3.1399 trillion, up by USD 20.7 billion or 0.66% month on month, marking the 11th month of consecutive growth.
Foreign exchange controls
Under the new rules, From July 1, 2017, banks and other financial institutions in China will have to report all domestic and overseas cash transactions of more than 50,000 yuan ($7888), compared with 200,000 yuan previously.
Banks will also need to report any overseas transfers by individuals of $10,000 or more. In addition, all banks must report to central government on every single foreign exchange transaction of at least $5 million.
How are chinese paying for $500,000 for EB-5 and other investment migration programs, despite a strict restriction of $15,000 yearly limit?
According to CNBC, In China, the currency exchange quota for individuals remains $50,000 per person per year, but most Chinese EB-5 visa applicants use two ways to avoid currency restrictions. The first is to transfer through underground banks, and the other is called “Ants Moving House,” which means to recruit friends or family members to exchange currency and transfer funds overseas.
According to China customs rules, passengers arriving in China must declare carrying foreign currencies in cash worth more than 5,000 U.S. dollars. The limit of RMB allowed to bring in or take out is 20,000 yuan. The exceeding part is prohibited.