Q&A On Asset Sales and Transferring Funds Abroad

What restrictions apply on individuals transferring funds from property sales out of China?

Basically，there are two types of fund transfers from property sales by individuals - “emigration transferring” and “inheritance transferring.” In the first category，an emigrant sells legally owned property in China，purchases foreign exchange，and then remits the funds outwards. In the latter category，an emigrant inherits property within mainland China，buys foreign exchange，and remits the exchange abroad.

Where should applicants start the process for transferring assets overseas?

Prior to emigration the applicant needs to apply at a branch of the State Administration of Foreign Exchange (SAFE) where he or she has a registered residence prior to emigration.

Can an overseas applicant entrust another individual to complete the application? Is notarization of a principal-agent agreement necessary?

The application can be made through a representative. Notarization of such a principal-agent agreement is not mandatory.

After receiving approval from the local foreign exchange authority，can the applicant withdraw cash in foreign currency?

That is not permitted. The applicant can apply to remit funds to his or her account in the country or region where he or she resides.

What are the qualifications for an “emigration transferring” applicant?

The applicant needs to have a foreign nationality or be a permanent resident of another country or territory. This includes the Chinese territories of Hong Kong，Macau and Taiwan.

When an emigrant who has foreign citizenship applies for “emigration transferring,” is a certificate of residence required from the Chinese embassy or consulate where he or she resides?

For the applicant who has been granted foreign citizenship，a certificate of residence without authentication from a Chinese embassy or consulate is acceptable.

Let’s look at a hypothetical situation where an applicant had originally registered his household in Province A but has income from an asset disposal in a personal bank account in Province B. In this case，can a SAFE branch in Province A send a letter to the bank in Province B to show that the application for foreign exchange purchase，payment and remittance has been approved? 

A SAFE branch cannot authorize foreign exchange business in a bank outside its jurisdiction. In this case，if the bank from Province B has a branch in Province A，the bank branch can handle the business through the applicant’s account in Province B.

Let’s look at the following kind of situation. Emigrant A acquired citizenship in a foreign country in April 2019 and took up residence there. Can foreign exchange purchases or payments be handled under the category of “emigrant transferring” for A’s salary in May or afterwards?

This is not permitted. Foreign exchange business related to A’s salary after he received foreign citizenship should be dealt with according to regulations covering the foreign exchange business of overseas individuals under the current account.

Applicant A has been a permanent resident of the US since 2001. He inherited a house from his parents who died in China in 2018. He later sold the property. Can he remit the money from this sale to the US?

On the basis of current regulations，only a foreign citizen can apply for “inheritance transferring.” As a permanent  resident of the US，applicant A does not qualify for remitting money abroad under the category of “inheritance transferring.”

Applicant A inherited a home on the death of his parents in 2001. The applicant received Australian citizenship in 2015. Can he remit the money from the sale of the house?

This too is not allowed. Applicant A was a Chinese citizen when he or she inherited the property from his parents. After the inheritance，he or she was granted Australian citizenship. The applicant should apply for “emigrant transferring,” rather than “inheritance transferring.”

In accordance with regulations，if public employees or their close relatives apply for approval of foreign exchange business concerning over one million yuan，the foreign exchange administration can conduct an inquiry with supervisory counterparts. What does the term “public employees” cover?  Does the term refer to civil servants?

The term “public employees” includes but is not limited to civil servants. The Supervision Law of the People’s Republic of China (PRC)，which was put in effect in 2018，provides that the term “public employees” refers to:

(1) civil servants and personnel as defined in the Civil Servant Law of the PRC;

(2) employees in an organization which is authorized by law and regulation，or lawfully entrusted by state organs to deal with public affairs;

(3) officials of state-owned enterprises;

(4) officials in state-run education，scientific research