In the past two years, we’ve seen China’s biggest crackdown on capital outflows. The government and banks have been working together to minimize the transfer of money from China to abroad. Because of this, it has become harder and harder for Chinese nationals to use their hard-earned money to purchase real estate in Australia. How then will you be able to transfer money from China to Australia?
How can you purchase your dream house in the Land Down Under? How will you be able to use your money for a sound investment in Australia? Although it is now more difficult, it is still possible. In this article, we will discuss possible ways to take money from your home country to Australia.
Chinese Limitations on Money Transfer and Withdrawals
$50,000 USD Limit Per Person Per Year for Sending Money Abroad
Chinese residents have long been limited to a maximum of $50,000 USD per person per year for foreign exchange, travel expenses and more, no questions asked. In the past, anyone can go over this limit as long as the source of funds and the reason for transfer are properly indicated. If the transfer is meant for purchasing real estate in a foreign country, their request to transfer more than $50,000 USD is flat-out disapproved.
This time around, those who intend to wire $50,000 USD overseas are required to sign a promissory note which states that the money will not be used for purchase of real estate property. So if you don’t want to have to sign any such document, then you will have to make do with transferring less than the said amount.
Some Chinese investors would seek the help of family and friends who can otherwise “dispose” of their annual quota. The person would transfer the money to the family or friend’s bank account, who would then transfer the money overseas. The more trusted relatives the person has, the easier for him to transfer more money to Australia. This process must not be done immediately in a matter of days, or it will raise suspicion. However, it is still a risky process as the government is also cracking down on this method of bringing money out of China.
$5,000 USD Limit Per Person When Travelling Out of China
Those who are traveling abroad has also made use of the $5,000 USD daily limit by distributing the amount to relatives and friends that they are traveling with. Again, since the government is cracking down on such ways, extreme caution is advised.
$15,000 USD Overseas Withdrawal
China has recently imposed a $15,000 USD annual withdrawal in international shores per person. This takes into consideration all of the person’s ATM, credit cards, debit cards and bank accounts. If you want to be able to withdraw more money, you would again have to ask your family and friends’ assistance.
Ways to Transfer Money from China to Australia and Other Countries
If you don’t want to transfer by bank, or travel in and out of China just to get money out, here are other ways to move your money. These methods work for various countries outside of China, not just Australia. However, there are still limitations for each option, which we will discuss below.
MoneyGram or Western Union
If you want your transfer to be easily available for your recipient, you can go for MoneyGram or Western Union. These are well-known money transfer service companies around the world. Their process is simple and direct. You just need to present your valid ID and complete the form. However, they are very strict with identification so make sure that you write the name of the recipient as is shown in the valid ID that he or she will present in an Australia MoneyGram/Western Union branch when picking up the money. If it is not exactly the same, chances are the money will not be released.
With MoneyGram, you are allowed to transfer a maximum of $899.99 per transaction, and $3,000 for every 30 days. If you brought more than $899.99, the transfer will simply be broken down into several chunks. With Western Union, the maximum transfer amount is $5,000. While MoneyGram has branches, Western Union transactions can be done in the bank.
Once you have completed the transaction and paid their transfer fees, you will be given the Money Transfer Control Number, which you will have to send to your intended recipient.
Paypal is a popular way to transfer money online. Even if you are not tech-savvy, Paypal is very easy to set-up and manage. All you need to do is create an account, fill-in your complete details, and link a credit card or debit card to get verified.
Cards that support multiple currencies and display the logos of Mastercard, Visa and American Express are by default accepted. But if you don't have this, Paypal can also accept specific UnionPay cards.
Paypal accepts UnionPay cards that are:
- single-currency Chinese Yuan cards that begin with “62” in the card number
- contain the China UnionPay logo
To use Paypal to transfer funds, your intended recipient must have a Paypal account as well. If not, the email you sent funds to will still receive the notice of transfer but would then be required to create a Paypal account to be able to withdraw the funds to their local bank account.
A verified Paypal account can send up to $10,000 USD in a single transaction. However, bear in mind that the money you will be using to transfer will be pulled from your bank account. Whether or not this amount will be included in your $50,000 USD annual limit remains to be seen. Based on experiences of some people, it doesn’t seem to affect their limit.
The downside with using Paypal is their heavy fees, which is 4.4% for countries outside of US, with an additional exchange rate fee which depends on the time of the transaction.
Paypal actually started out because of Ebay, an online marketplace. The same goes for Alipay, which started out because of Alibaba. Called zhi fu bao by Chinese nationals, Alipay works the same as Paypal, except that it has been created mainly for paying for products purchased from and by Chinese nationals. The good news is that it also has a built-in money transfer function. All you have to do is attach your credit card or debit card and you are on your way.
Steps to Transferring Money via Alipay
To do this, just open the Alipay app in your mobile phone, click on the Alipay button and then choose “More”. You will be shown a list of options, just scroll down and choose “International Transfer”.
You will then be presented with two options:
- Transfer Now;
- Invite Others to Pay Money Abroad.
Choose the first option, then fill out the necessary details in the next pages.
Alipay will allow you to send money based on the receiver’s currency. They will just display the exchange rate and remittance fee. Click on the button that says “Confirm payment information and pay”.
All of these are in Chinese so it would be easier for Chinese nationals to use than Paypal.
Cryptocurrency is rising in popularity. The worldwide use of Bitcoin makes it easier for anyone to transfer money and exchange currency faster and simpler. So far, it is not counted against your annual limit of $50,000 USD because it is counted towards purchases.
In order to transfer money using Bitcoin, you must first have a Bitcoin wallet. This means you just need to register and create an account at any Bitcoin exchange, where you can buy and sell Bitcoins. Examples of places where you can buy Bitcoin are BTCChina, Wirex and OKcoin. Once you have created an account, you can simply purchase Bitcoin and transfer it to someone else to a different country, for example Australia. That person will usually receive the transfer within an hour. He or she can then withdraw from his Bitcoin wallet to his local bank account.
Bitcoin is unregulated and a bit risky. But since the transaction is fast when your intent is to just transfer money, then there is little risk. The amount you receive would still be dependent on the current cryptocurrency exchange rate.
Moving money out of China has become considerably difficult as of late, which also affected the demand for real estate in various countries, including Australia. However, more and more people are becoming creative in how they can relocate their money with the intense desire to purchase real estate. We can therefore expect someone to finally come up with easy and reliable ways to transfer currency from China to Australia. But while we’re waiting, the abovementioned ways can be utilized.
If you need advice in finding ways to bring your money to Australia to pay for your real estate investment don't hesitate to contact us.