Procedures to Exchange RMB to Foreign Currency
Procedures for Currency Exchange
(RMB to foreign currency)
Before we begin this topic, for this purpose "a day" is usually considered a 24-hour interval of time.
It is also important to remember that China tightly controls currency exchange.
The daily limit for exchanges out of RMB for foreign individuals without additional documents except for a passport is $500, up to an annual limit of $50,000 or equivalent amounts for other major currencies.
With the tightening of currency exchanges and lack of knowledge by many bank officers with relation to the exchange laws, some may claim that this $500 or equivalent is not allowed.
You may have to take further action with the teller to complete your transaction, such as asking to see the policy document, calling the bank's English hotline and hand over the phone to the agent to talk and explain, or simply talking with the branch manager.
Besides, the government imposes an annual limit of 100,000 RMB of funds that you can withdraw from a foreign ATM overseas with a UnionPay card. The money and fees are directly debited in RMB and vary by country and foreign bank where you are withdrawing the funds. This withdrawal can be divided between many cards or done with just one card.
In the past, you could have various accounts and be able to retreat 100,000 RMB from each card abroad.
However, these days the withdrawal is tied with one's passport or identification, so the total 100,000 RMB can be taken from one card or all the cards combined.
If you are caught having withdrawn more than the 100,000 RMB overseas, then you will have a withdrawal freeze for at least two years on all these accounts.
It is possible to exchange more than $500 per day if you are legally working in China (holding a work permit and residence permit) and the bank will generally require the following documents:
1. Passport
2. Residence Permit
3. Work Permit
4. Salary certificate stamped with company chop
5. Tax receipts of the last three months
We have heard that some banks require the transactions need to take place at the bank where your employer pays your salary. Some banks may also request further documents than mentioned.
If you are looking to exchange more than the annual $50,000 for amounts earned legally, there is a process through the State Administration of Foreign Exchange (SAFE).
There is no guarantee you will be approved. It is important to note that you would likely be asked to prove all related documents to those transactions.
For example, if you made a substantial investment that is beyond your salary into China. You would likely need to prove how you got the money in and approved legally, the contracts and other details for the investment, and so on. All of that would have to be in your name.
According to SAFE, the $50,000 or equivalent applies for both foreign exchange to and from RMB. With this said, transactions from foreign currency to RMB is much more convenient. Once the money arrives at your bank account, you need to go to the bank to exchange the funds. Depending on the type of visa that you hold you may be subject to further questioning and declined the release of funds or return of the to the sender with a deducted fee.
You can ask at any Chinese bank how much money you exchanged toward your annual $50,000 limit.
If you decide to go through a Chinese friend to do the exchange, this could raise questions depending on that person's taxable income or usual activity, etc.
Some people have indicated that they "know someone" who can help them obtain major foreign currencies.
The problem with this is how to prove the source of funds when you want to send the money overseas. If you show up with the foreign currency, there is a high probability you will be questioned to prove the exchange or source of funds. Even if you can obtain the proof, it is not linked to your name.
Transferring Funds
Western Union, AliPay, bank transfer, PayPal, carrying cash out of the country, and matching services, are common ways to get money out of China.
The disadvantages with Western Union are as follows:
• Can only be done in USD, but if the destination is not in the US the money usually has to be accepted in local currency (so this would mean a double exchange)
• Cannot be transferred to a bank account overseas (e.g. someone has to pick up the cash)
• Too many transactions or too much money involved could result in your activity being flagged and returned to you as a result of governments being concerned about money laundering
• Many Western Union locations overseas are supermarkets or other shops or small restaurants and may not have enough cash if you make a relatively large transfer payment
AliPay foreign transfers can only be done by Chinese nationals or foreigners who are Green Card holders. While many foreigners practice this option by asking help from a Chinese friend, you will face problems if your Chinese friend is questioned about why they are sending you the money, if it's counted against their salary (e.g. if they make a certain amount of taxed income and how they can transfer so much relative to their salary), and/or to prove where they got the money from.
The number of times the transactions are done, and the amounts could flag your operations, as well. We know from experience that opening a frozen bank account is difficult enough, but opening a frozen virtual wallet must be even worse! Also, it is not proven that Green Card holders are in practice allowed to do this. As we know from other benefits for Green Card holders that are not implemented, this could be the same, if the systems are not designed for it.
Bank transfer fees are higher than AliPay and Western Union but are the safest option. Some of the charges are fixed per transaction, while others are a percentage of the amount sent. If you are using a Chinese friend's help on your behalf, you risk the same questioning as mentioned for AliPay. We have heard that some Chinese banks are starting to contact the bank overseas to ensure that the account information you provide is an actual account at their bank and that it is indeed your account or you may have to give a reason why you would need to transfer to someone else.
PayPal is another option that is often considered. However, this option is expensive and cumbersome because you need to have an account with Chinese PayPal and you use your foreign PayPal account to request the money from your Chinese account, since you cannot hold the foreign currency in your Chinese account. The RMB will be deducted from your UnionPay debit card and then sent to your foreign PayPal account in foreign currency minus the fees, at the prevailing exchange rate. The costs for this are generally more than the bank. This still applies toward your annual $50,000 maximum and costs are high.
Some people prefer to carry cash out of the country if they travel. This is risky in case something happens to you or your bags. The limit for passengers leaving China are 20,000 RMB or $5,000 (or equivalent in another currency). While it does not matter which visa the traveler holds, if it seems strange, then the passenger may be questioned. For example, if a tourist is carrying a relatively high amount out, then they may be challenged, and the traveler could also be examined for the relating paperwork to how the money was earned or exchanged.
If the foreign currency amount exceeds $5,000 and is below $10,000, then you will be required to provide a "Permit for Taking Foreign Currency Out of the Customs Territory" that can be issued by the bank where you did the exchange. If the amount exceeds $10,000, then you will need to show a legal warrant issued by SAFE.
While many people have exited China with more money than the mentioned amounts without the extra paperwork, you do risk confiscation of funds, if you are caught. You would then need to obtain the documents and prove them in order to possibly get your funds back. There is a chance that further fees and consequences could apply or you may lose the funds, as technically you broke the law.
Currency Swap/Exchange is on the Rise.
But Proceed with Caution !
For persons needing to obtain foreign currency or Chinese currency, we have noted a recent increase in alternative transfer solutions. We will discuss the “swap” solution.
Through private messages and WeChat groups, as well as a recent WeChat public account article, we were introduced to a couple of companies that offer peer-to-peer matching of strangers interested in a currency swap or exchange. The process is simple enough. You use WeChat or Alipay to transfer RMB, and Zelle or PayPal for USD or foreign currency.
Our summary comment is to proceed at your own risk.
These companies are clearly not abiding by foreign or Chinese currency exchange regulations. If caught, users of the service and the companies could find themselves in serious trouble.
1. Users of this swap service are circumventing Chinese currency exchange regulations, and such companies do not even have a registered company in Mainland China, let alone a company registered in Mainland China for this purpose.
2. These companies generally charge less than 1%, which is very little considering the risk involved. What if your swap partner does not pay? How can you be sure this company will honor the transaction to you? How do you know that this company has enough money to pay you?
Please note: All of the companies requires user's identification information. If the company is caught by either government, it is likely that one or both governments will need the company to release such user information.
In Western countries, transactions like this is called money laundering.
Alternative currency transfer options do not stop here. We recently saw posts on WeChat Moments for invitations to money transfer groups. People in these and other groups even posted information about the currency they had and currency they were looking for and the amounts involved, as well as their proposed rates.
We have recently been questioned regarding what to do if you have a small amount of foreign currency which is below the bank’s minimum to sell in China or if you have coins. Such swap exchanges is not the solution. According to the regulations, the foreign exchange must be exchanged at a bank designated by the state, or another official currency exchange outlet, and it is illegal to exchange foreign currency at a place other than the foreign exchange designated bank and the legal foreign currency exchange point.
Keep in mind that what we say on WeChat is monitored and that the group administrator is legally responsible.
Please refer to the corresponding laws on foreign exchange Control with regards to the circulation of foreign currency and the exchange to/from foreign currency available from SAFE at
Special thanks to David Atnip for his contributions to this article.
Are you looking for more useful tips for your life in China? Get in touch with contributors for a consultation and follow us in our WeChat Group to receive the latest news.
Julian (WeChat: julian_beijing) is based in Shanghai but often travels for work and runs a company that works with individuals and organizations doing business between the US, China, and Africa. He has been based in China for a number of years.
Ikky (WeChat: ikky888) is an R&D Manager working in Shanghai. He has been living in China for over 11 years.
Jatin (known by the nickname "Prince Jatin") (WeChat: jatinsoni) is a Multicloud DevOps Engineer working in Shanghai. He has been living in China for over eight years and owns three Indian community WeChat groups known for "Helping Indians" with their specific inquiries.”
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