-Goods trade-
Question 1: Article 2(1) of the "Notice of the State Administration of Foreign Exchange on Further Facilitating the Settlement of Foreign Exchange Funds to Support the Stable Development of Foreign Trade" (hereinafter referred to as the "Notice") mentions "net settlement of general trade balances between domestic and foreign affiliated enterprises". Does this include the business of refunding foreign exchange for trade in goods?
Answer: According to Article 2 of the "Notice", high-quality enterprises can handle the net settlement of general trade balances between domestic and foreign affiliated enterprises, including foreign exchange refund business under general trade, but not including foreign exchange refund business under other goods trade.
Question 2: The customer is an enterprise in a bonded zone. It has previously received payment in US dollars from an enterprise in a general trade zone. The payment declaration form is a domestic income declaration form. Now it has been more than 180 days since the customer wanted to return the US$300,000 in payment to the company outside the area. Does this domestic U.S. dollar refund that exceeds 180 days require registration at the foreign exchange bureau?
Answer: Yes.
-Trade in services-
Question 3: Article 7 of the "Notice of the State Administration of Foreign Exchange on Further Facilitating the Settlement of Foreign Exchange Funds to Support the Stable Development of Foreign Trade" (hereinafter referred to as the "Notice") supports the relaxation of the management of agency advance business in service trade. How should "domestic and foreign institutions with trade transactions" mentioned in it be understood?
Answer: The import and export of goods between domestic and foreign institutions and the related service trade derived therefrom, as well as the service trade that occurs between service providers such as transportation and warehousing enterprises, all fall into the category of "having trade transactions". This provision applies to transportation, warehousing, maintenance, customs declaration, inspection, insurance, demurrage, despatch and other expenses incurred during the trade of goods, as well as customs clearance fees and other expenses incurred between domestic and foreign transportation companies.
Question 4: According to Article 7 of the "Notice of the State Administration of Foreign Exchange on Further Facilitating the Settlement of Foreign Exchange Funds to Support the Stable Development of Foreign Trade" (hereinafter referred to as the "Notice"), banks should indicate "advances for trade-related service fees" in the postscript of foreign-related income and expenditure declaration transactions. Is it no longer necessary to indicate "advance for non-related services" as required by the "Guidelines for Current Account Foreign Exchange Business (2020 Edition)"?
Answer: For the trade-related service fee advance business handled in accordance with Article 7 of the "Notice", the bank should indicate "trade-related service fee advance" in the postscript of the foreign-related income and expenditure declaration transaction and no longer mark "non-related advance".
-Capital Projects-
Question 5: After April 1, 2026, when should domestic companies register for overseas listing?
Answer: According to Article 3 of the "Notice of the People's Bank of China and the State Administration of Foreign Exchange on Relevant Issues Concerning the Fund Management of Overseas Listings of Domestic Enterprises" (Yinfa No. 252): Domestic enterprises listed overseas should go to the bank at the place of registration to register for overseas listing within 30 working days from the first trading day of overseas listing or after the over-allotment is completed.
Question 6: Do domestic shareholders need to go through foreign exchange registration when they receive dividends from a listed company with "full circulation" H shares?
Answer: According to Article 4 of the "Notice of the State Administration of Foreign Exchange on Issuance" (Huifa No. 12) 4.4.4.2 H-share "Full Circulation" Review Principles: Dividends paid to domestic shareholders by listed companies participating in the "Full Circulation" of h-shares should be distributed directly in the country in RMB by China Securities Depository and Clearing Co., Ltd. (hereinafter referred to as CSDC).
Question 7: Does the foreign exchange income earned by individuals participating in the equity incentive plan have to be settled in foreign exchange? If a domestic institution needs to withhold and pay personal income tax, how should it be handled?
Answer: According to Article 5 of the 6.1.4 Review Principles of the "Notice of the State Administration of Foreign Exchange on Printing and Distribution" (Huifa No. 12): funds transferred back under the equity incentive plan can be retained in cash and can be transferred from the resident overseas securities and derivatives accounts of domestic agencies to the relevant personal domestic foreign exchange accounts; the agency can also transfer the funds to the relevant personal accounts after unified settlement of foreign exchange and transfer to its RMB settlement account. If it is necessary to withhold and pay personal income tax for domestic individuals, the domestic agency can transfer the funds corresponding to the withholding and payment of tax to its RMB settlement account for payment to the tax department.
-Balance of payments declaration-
Question 8: When a domestic exporter exports goods to Egypt, the exporter needs to register on the cargox platform and pay a certain fee. How should he declare it?
Answer: According to the provisions of the 2025 edition of the "Analysis of Indirect Declaration of Balance of Payments", cargox is a supplier of blockchain-based solutions for the shipping and logistics industry. Its headquarters is located in Slovenia. As the blockchain file transmission gateway of the Egyptian Cargo Forecast Information System, cargox can be regarded as a file transmission platform through which exporters obtain ACI numbers. In practice, you should pay attention to what kind of services you receive from the company. If it is only used to check customs declaration information, it should be declared under "227030 Trade in Services – Telecommunications, Computer and Information Services – Information Services".
Question 9: How should the tax bureau declare the stamp tax remitted by a non-resident company when it receives it?
Answer: According to the 2025 edition of the "Analysis of Examples of Indirect Declaration of the Balance of Payments", stamp duty is a tax levied on the act of establishing and receiving legally valid vouchers in economic activities and economic exchanges. It is named after the tax stamp is affixed to the taxable voucher as a sign of tax payment. Taxpayers can purchase and affix tax stamps on their own in accordance with the prescribed taxable proportion and quota, or entrust them to collect it on their behalf, and the tax authorities can collect it on their behalf through the unit that issues or handles taxable certificates. As a behavioral tax, stamp duty is directly related to economic activities and is a production tax in primary distribution, so it should be classified as primary income. The core of secondary income is transfer payment, which is not directly related to the nature and function of stamp duty. Therefore, the tax bureau should declare the income under "323020 Primary income (income) – other primary income – taxes and subsidies on products and production".
-Personal foreign exchange-
Question 10: If a domestic individual rents a house abroad while studying abroad, can the rent not occupy his convenience quota?
Answer: According to the relevant provisions of the "Notice of the State Administration of Foreign Exchange on Issuing the "Guidelines for Current Account Foreign Exchange Business (2020 Edition)"" (Huifa [2020] No. 14), "Individual foreign exchange settlement and domestic individual foreign exchange purchase are subject to annual facilitation quota management, and the facilitation quota is the equivalent of US$50,000 per person per year. Domestic individuals can handle current account foreign exchange purchases at banks without occupying the facilitation quota with their valid identity documents and relevant foreign exchange purchase materials with transaction amounts." According to the above provisions, individuals can choose whether to use their own convenience quota. If your annual convenience quota of US$50,000 is occupied, you can go through the foreign exchange purchase procedures at the bank with your valid ID. If you do not use your convenience quota, you need to use your valid ID card and proof of rent with transaction amount to go to the bank to purchase foreign exchange without the quota.
Question 11: Can domestic individuals engaged in cross-border e-commerce handle settlement through their foreign exchange accounts?
Answer: According to Article 66 of the "Notice of the State Administration of Foreign Exchange on Issuing the Guidelines for Current Account Foreign Exchange Business (2020 Edition)" (Huifa [2020] No. 14), foreign exchange receipts and payments for personal trade in goods are handled in accordance with the following provisions: (2) Domestic individuals engaged in cross-border e-commerce can handle cross-border e-commerce foreign exchange settlement through their own foreign exchange accounts. Domestic individuals who handle foreign exchange settlement and sales under cross-border e-commerce and provide materials with transaction amounts or electronic transaction information will not occupy the individual's annual facilitation quota.
-Cross-border RMB-
Question 12: The State Administration of Foreign Exchange has recently reduced the negative list for the use of capital account income. Can the use of RMB income from capital accounts by domestic institutions be followed accordingly?
Answer: Yes. RMB income from capital accounts of domestic institutions shall be used within the business scope approved by relevant national departments under the following conditions: it shall not be used directly or indirectly for expenditures prohibited by national laws and regulations; unless otherwise clearly provided, it shall not be used directly or indirectly for securities investment or other investment and financial management (except for financial products and structured deposits with risk rating results no higher than Level 2); and shall not be used to issue loans to non-affiliated enterprises (except when clearly permitted by the business scope).
Question 13: Do foreign-invested enterprises need to register basic reinvestment information for domestic RMB reinvestment?
Answer: When a foreign-invested enterprise uses RMB income from capital projects to carry out domestic reinvestment, the invested enterprise or equity transferor does not need to register the basic information for receiving domestic reinvestment and register changes.
Question 14: Does a special RMB deposit account opened by a foreign shareholder of an A-share listed company to reduce its shareholdings and distribute dividends need to be opened in the place of registration of the listed company?
Answer: In view of the fact that the "Notice of the General Office of the People's Bank of China on Issues Related to Account Opening and Foreign Exchange Management Involved in the Reduction of Shares and Dividends Distributed by Foreign Shareholders of A-share Listed Companies" (Yinbanfa [2009] No. 178) has been abolished, and the "Guidelines on Foreign Exchange Administration of Capital Accounts (2024 Edition)" have relaxed the requirements for the location of accounts involved in the reduction of shares held by foreign investors in A-share listed companies. When foreign shareholders of a-share listed companies open special RMB deposit accounts due to reduction of shareholdings and dividend distribution, they are exempted from the requirement that "it should be opened at the place of registration of the listed company" in accordance with Article 2 of Part 2 of the "Notice of the People's Bank of China on Issues Concerning the Opening and Use of RMB Bank Settlement Accounts of Overseas Institutions" (Yinfa [2012] No. 183). When remitting funds for reduction of holdings, the bank should review the relevant information on the registration of reduction of holdings by the Foreign Exchange Bureau to ensure that the amount of reduction of holdings is within the range that can be outflowed; when remitting funds for dividend distribution, the bank should review the dividend distribution announcement and tax certificates.
Question 15: If a foreign investor remits upfront expenses in RMB before establishing a foreign-invested enterprise in China, is it necessary to register basic information on the upfront expenses?
Answer: Foreign investors who wish to remit RMB upfront expenses before establishing a foreign-invested enterprise in China can directly open a special deposit account for RMB upfront expenses at a bank and remit the funds for the upfront expenses. There is no need to register basic information on the upfront expenses before opening the account.
Question 16: When an enterprise handles RMB remittance for overseas direct investment business (odi), if the currency of odi investment approved, approved, and filed with the commerce and development and reform departments is foreign currency, does it need to change the approval, approval, and filing documents again?
Answer: No, the bank can handle the remittance of funds within the converted amount after reasonably converting it into RMB at the market exchange rate based on the approval, verification and filing documents issued by the commerce and development and reform departments.
