Getting Money Out of China: NOT This Way

Home | China Law Blog | Getting Money Out of China: NOT This Way Every month or so, someone calls one of our China lawyers wanting to discuss "working with you to help your clients get money out of China." These are nearly always phone calls (not emails) and we typically do not take the calls. We've been doing this long enough (and discussing this long enough with ultra-high level finance and banking people and with really good China attorneys from other law firms), such that these callers are not going to tell us anything new. But a few weeks ago a "we can work together to help your clients get money out of China" caller got through. In my defense, I was on my treadmill and expecting another call and this caller somehow managed to get my firm's receptionist to patch his call through to my cell phone and I picked it up. So while on mile four, I listened to this person explain his "foolproof and completely legal method" of how both his company and my law firm could "make a lot of money working together," while all the while I am telling him we are not interested and how it would not work. He then followed up this call up with an email reiterating that "we are on the same team" and setting forth the following method in writing: Client transfers RMB to one of our RMB accounts in China (we have both private and corporate accounts) Client sends RMB payment slip We confirm receipt of funds and match off with an existing client The following business day we will transfer the equivalent in GBP (British Pounds) from our UK regulated company to the client's GBP bank account We provide the relevant document to support the audit trail of funds for the client Advantages Transfers in 1-2 working days Unlimited transfer amounts Working with an FCA regulated company based in London Full audit trail for transfer Guaranteed funds. Safe and secure route for RMB transfers Our lawyers spent all of about five minutes looking at the plan and sent the following response and never heard back -- no surprise: What you are proposing is a standard procedure for illegally getting money out of China that has been used for years. Two sets of linked accounts: one bank account in China and then a linked bank account in some other country. There are some Chinese banks that refer their customers to this kind of broker as a service to their customers. The idea is that even though the practice is illegal, a broker introduced by the bank is more likely to be trustworthy. This is particularly true when the initial deposit is made in the bank that made the introduction. The risk skyrockets when the work is done by a broker with no connection with a major bank. In other words, this sort of service is already available to any Chinese person who wants to make use of it and who is willing to pay the broker's fee and skirt Chinese laws. So there is no need for a foreigner from England to provide the service in China. Why is the practice illegal? 1. The obvious goal is to evade China's laws on outbound fund transfers. Any contract with that purpose is void and unenforceable. That means that if something goes wrong, there is no way to enforce it on the Chinese side. Is there a way to enforce it in England? I would think not, as the courts of England do not normally allow themselves to be used to assist in enforcing an illegal contract, in the same way courts generally will not enforce an illegal gambling contract. 2. The China side of this operation is not described. But it is clear these Chinese bank accounts are not being operated legally. There will be substantial sums coming into a bank account in China. Whose account? For what legitimate business purpose? Evading Chinese foreign exchange rules is not a legitimate purpose. Acting as an unregistered bank is not a legitimate purpose. How would taxes be paid? What happens to the funds? The funds are by definition stuck in China. For whose benefit? Used to do what? 3. I assume similar questions would be asked on the England side. The Chinese party is acting on trust. They expect the corresponding deposit to be made. But what happens if the deposit is not made? The Chinese party is stuck in China. What can they do? 4. Into what account in England is the money deposited? Part of Chinese foreign exchange control is that Chinese individuals and companies are not permitted to open foreign bank accounts without first securing Chinese government approval to do so and this approval requires a legitimate business purpose. Note that China has a worldwide taxation system, so the money that "just shows up" in these accounts must be reported to the Chinese tax authorities. But such a report would reveal that an illegal transfer had been made. So no report is made. This then is a currency transfer/tax evasion scheme, illegal in China and I would assume illegal in England as well. So like I told you on the phone, if you are going to do this, you better not ever go to China or to any country that has an extradition treaty with China, because doing so puts you at risk for going to a Chinese jail. In fact, many years ago, we helped a U.S. citizen get his prison sentence reduced from 15 years to five years (with a chance of parole) for doing something similar. Beyond that, best of luck. For how to actually get money out of China, check out Getting Money Out of China: The Long Version. Check Out Our China Law Services Share Twitter Facebook LinkedIn E-mail Comment Dan Harris Dan Harris is a founding member of Harris Sliwoski, an international law firm where he mostly represents companies doing business in emerging market countries. Most of his time is spent helping American and European companies navigate foreign countries by working with the international lawyers at his firm in setting up companies overseas (WFOEs, Subsidiaries, Rep Offices and Joint Ventures), drafting international contracts, protecting IP, and overseeing M&A transactions. In addition, Dan writes and speaks extensively on international law, with a focus on protecting foreign businesses in their overseas operations. He is also a prolific and widely-followed blogger, writing as the co-author of the award-winning China Law Blog. Harris Sliwoski Attorney Read more posts [email protected] Read More Basics of China Business Law Related Posts September 15, 2026 Your AI-Drafted China Contract Says It Needs a Lawyer. Listen to It. September 11, 2026 Forensic Accountants in China Business Litigation: How True Numbers Can Tell the Wrong Story September 4, 2026 China NNN Agreement or Trademark Registration? You Usually Need Both September 1, 2026 AI Didn't Replace Lawyers. It Gave Us the 48-Page Contract. August 27, 2026 Do I Need a China NNN Agreement or a China Manufacturing Agreement? Usually Both. August 26, 2026 China’s New Overseas Investment Rules: Can Your Chinese Investor Actually Get the Money Out? August 24, 2026 International IP Protection for Startups: What to Protect and Where August 19, 2026 The Documents Are the International Deal August 19, 2026 China Supplier Fraud in Yiwu: Why We Recommended the Police, Not a Lawsuit August 17, 2026 China Trademark Registration: Why U.S. Companies Need More Than a Filing Agent August 10, 2026 Buying Expensive Equipment from China: Seven Questions to Answer Before You Pay August 7, 2026 DDP Shipping Risks: What Boise Cascade’s Guilty Plea Means for U.S. Buyers August 6, 2026 Protecting Your Artwork Internationally: What Artists Need to Do Before the Work Travels August 5, 2026 Your China Employee Signed the Vacation Policy. You Can Still Lose. July 29, 2026 The RedNote Contract Lesson for Companies Doing Business in China Leave a comment Cancel reply