Doing business in China must abide by the relevant laws and regulations. For example, you need to file the tax returns, do the accounting and submit the audit report within the prescribed time. What is more, you should also pay attention to your bank transaction, as large transfers may draw the curiosity and attention of authorities in the relevant departments. Therefore, it is important to know what transactions are considered large and suspicious so you may avoid triggering an investigation into your bank account.
What Belongs to "Large Money" Transfer?
According to a financial report titled “Measures for The Management of Huge Amount Transaction and Suspicious Transaction of Financial Institutions” released on July 1, 2017, the following amounts are considered huge in China.
1. Single or cumulative transactions of not less than RMB 50,000 and foreign currency equivalent of not less than USD 10,000 on the same day. Those include cash deposits, cash withdrawals, cash settlements, cash exchange, cash remittances, cash bill settlements, and any other forms of cash receipts and payments.
2. Transactions for non-natural person's bank accounts and other bank accounts on a single or cumulative amount of not less than RMB 2 million, or foreign currency equivalents of not less than USD 200,000.
3. Domestic transactions for natural person's bank accounts and other bank accounts on a single or cumulative transaction amount of not less than RMB 500,000, or the foreign currency equivalent of not less than USD 100,000.
4. Cross-border transactions for natural bank accounts and other bank accounts on a single or a cumulative transaction of not less than RMB 200,000 and foreign currency equivalent of not less than USD 10,000.
Which Kind of Transfers are Considered Suspicious?
Either of the following conditions is considered a suspicious transaction:
1. Dividing the money into certain parts and sending it out in single small amounts frequently, the intention becomes fairly suspicious.
2. The frequency and amount of transfers received and paid are inconsistent with the scale of business operations.
3. The business scopes of the recipient and the sender are inconsistent.
4. The money is frequently collected and received between the same people in a short period of time.
5. Large transfers show on a bank account that has been deactivated for a long time.
6. Saving a large amount of cash at the bank and frequently transferring to another account becomes suspicious, especially if the amount is inconsistent with their ordinary cash receipts and payments.
Foreign businesses who are new to Chinese market may find it is difficult to adapt to the different environment at the beginning. At this time, you would better hire a consulting agency for help. They can give you professional advice and personalized solutions. Tannet provides one-year comprehensive consulting services for investors from company setup to tax and finance planing. We are willing to work with you in your business startup in China.
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If you have further queries, don’t hesitate to contact Tannet anytime, anywhere by simply visiting Tannet’s website english.tannet-group.com, or calling Hong Kong hotline at 852-27826888 or China hotline at 86-755-82143512 or 86-755-82143181 or emailing to tannet-solution@hotmail.com. You are also welcome to visit our office situated in 16/F, Taiyangdao Bldg 2020, Dongmen Rd South, Luohu, Shenzhen, China.
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