China's strict regulations on capital outflow are well-known, with numerous online tips such as enlisting local friends, using services like Alipay, PayPal, or transporting substantial cash amounts, proving not only impractical but also illegal. While engaging in these activities is unlikely to lead to severe legal consequences such as imprisonment, they pose significant risks as they bypass legally sanctioned channels that China has established for international money transfer. These channels require compliance with tax obligations, and any deviation is considered tax evasion.

Legal Requirements for Money Transfers

The cornerstone of legally transferring money abroad from China hinges on proving the legality of the funds and that all due taxes have been paid:
 

• Documentation and Process: Individuals looking to transfer money need to provide a solid proof of income legality. This includes presenting an employment contract and an annual income tax statement obtained from the local tax office. Such documents serve as evidence that the money was earned legally and that all taxes due have been paid. These documents should be taken to your bank along with your passport and the details of your foreign bank account. 
• Bank Procedures: When presenting your documents at the bank, ensure all paperwork is complete to facilitate a smooth transaction. Any missing document can complicate or delay the process. Seamless Transfers Through International Banks: For those using international banks like HSBC in both China and abroad, the process can be expedited, sometimes allowing for instant transfers.
  

Alternative Legal Avenues for Transferring Money

For smaller sums, there are several convenient and legal alternatives:

• ATM Withdrawals Abroad: A Chinese UnionPay bank card can be used to withdraw cash from ATMs outside China that are connected to the UnionPay network. Although popular, this method has daily and annual limits and involves transaction fees that typically hover around 0.5% for withdrawals such as 1,000 Euros. 
• Merchant Transactions: UnionPay cards are also widely accepted in stores and restaurants worldwide, offering minimal transaction fees for overseas purchases.
  

Carrying Cash Internationally

For those preferring to carry cash, regulations are clearly defined:

• Limits and Declarations: Individuals are allowed to carry up to USD 5,000 or its equivalent in foreign currency per trip. If traveling again within 15 days, the limit is reduced to USD 1,000. Any
  amount over these limits must be declared at customs to avoid legal issues.
  

Larger Financial Transactions

For larger financial amounts, such as proceeds from property sales or dividends from company shares, the process mirrors that of regular income transfers:

• Detailed Documentation: It is crucial to maintain a comprehensive record of the transaction, including property deeds, sale agreements, and tax certificates. Planning is essential, especially when properties are co-owned with a Chinese spouse, as the name on the property deed directly affects the transferable amount. 
• Advice for Expatriate Shareholders: Expatriates acting as shareholders in Chinese companies can remit their dividends overseas, provided they can furnish annual audit reports and demonstrate that all applicable taxes have been paid.
  

Special Considerations for Naturalized Citizens

Chinese nationals who acquire citizenship in another country can remit their RMB funds in a structured manner over three years. This process requires presenting naturalization documents and undergoing a source of funds examination, although it is generally less stringent than the process for expatriates.

Conclusion

Navigating China’sforeign exchange controls requires a meticulous approach to ensure compliance
with all legal requirements.