How to Operate Offshore Account Payments for Domestic Companies? Practical Analysis and Operation Guide

How Can Domestic Companies Achieve Offshore Account Payments? A Comprehensive Analysis and Practical Guide

In the context of deepening globalization, trade activities between domestic companies and overseas clients or suppliers have become increasingly frequent. To improve capital efficiency, hedge against exchange rate risks, or optimize tax structures, more and more companies are focusing on how to make payments through offshore accounts. This article systematically explains, from a practical perspective, how domestic companies can legally and compliantly execute offshore account payments. It also incorporates recent policy developments and market trends to provide readers with a practical operational guide.

1. What Is an Offshore Account and Why Do Companies Need One?

An offshore account is a bank account opened in a country or region outside the company’s place of incorporation. Common offshore financial centers include Hong Kong, Singapore, the Cayman Islands, and the British Virgin Islands BVI. These jurisdictions typically offer advantages such as relaxed financial regulation, low tax rates, and free capital movement.

For domestic enterprises, establishing and using an offshore account offers several key benefits

1. Flexible Fund Management Facilitates multi-currency settlements with overseas clients or suppliers, reducing exchange costs.

2. Bypassing Foreign Exchange Controls Enhances cross-border capital efficiency within the framework of regulatory compliance.

3. Tax Optimization Reduces overall tax burden through strategic international financial arrangements.

4. Enhanced Corporate Image Possessing an overseas account enhances the company's professional image in international markets.

2. Pathways for Domestic Companies to Make Offshore Payments

2.1 Establishing an Overseas Subsidiary or Affiliate

This is one of the most common and compliant methods. A domestic company can set up a subsidiary or affiliate abroad and open an offshore account at a local bank. This account can then be used for payments, collections, and settlements.

For example, in 2025, several manufacturing companies in Guangdong established regional headquarters in Singapore, successfully enabling localized settlements in Southeast Asian markets. This not only improved payment efficiency but also effectively mitigated losses from currency fluctuations.

2.2 Utilizing Free Trade FT Accounts

With the continued development of China’s free trade zones, FT accounts have become an important tool for domestic companies to manage cross-border funds. Companies can transfer funds between FT accounts and offshore accounts, enabling offshore payment functions while benefiting from certain tax incentives and regulatory flexibility.

For instance, in 2025, more than 2,000 new enterprises opened FT accounts in the Shanghai Free Trade Zone. Many of these companies used FT accounts in conjunction with offshore accounts to efficiently manage supply chain financing.

2.3 Cross-Border RMB Settlement

With the advancement of RMB internationalization, cross-border RMB settlement has become a new pathway for offshore payments. Domestic companies can collaborate with overseas banks to make direct RMB payments, reducing foreign exchange conversion steps and enhancing fund security.

According to data released by the People's Bank of China in 2025, the transaction volume of the Cross-Border Interbank Payment System CIPS grew by over 30% year-on-year, indicating a continuous increase in the use of RMB in international settlements.

3. Practical Operational Procedures and Key Considerations

3.1 Preparing for Account Opening and Submitting Documents

Before opening an offshore account abroad, companies must prepare the following documents

Certificate of company registration

Copy of business license

Identity proof and authorization letter of legal representative

Articles of association and shareholder structure

Description of business operations and intended use of funds

Requirements may vary slightly by bank and jurisdiction, so it is advisable to confirm the required documents in advance with the bank.

3.2 Designing the Fund Transfer Path

Domestic companies must legally and compliantly transfer funds from domestic accounts to offshore accounts. The typical process is as follows

1. The domestic company transfers funds overseas through ODI Outward Direct Investment registration or trade-related remittances.

2. The overseas company receives the funds and makes payments through the offshore account.

3. After completing the transaction, funds can be repatriated to China via profit remittances or service fee payments.

3.3 Compliance and Tax Planning

During the process, companies should pay special attention to the following

Ensure that fund usage complies with regulations set by the State Administration of Foreign Exchange SAFE.

Avoid fake trade or circular fund flows.

Conduct tax planning to avoid double taxation.

Timely report overseas account information to prevent tax risks.

The State Taxation Administration has recently intensified supervision of cross-border related-party transactions. Companies should ensure that transactions have genuine commercial purposes and retain complete transaction records.

4. Case Study Offshore Payment Practice of a Technology Company

Take a tech company headquartered in Shenzhen as an example. The company primarily provides SaaS services to U.S. clients and regularly pays overseas server fees and technical collaboration costs. To improve fund management efficiency, the company established a wholly-owned subsidiary in Singapore and opened an offshore account with a local bank. Through this account, the company achieved the following

Received USD payments from U.S. clients

Paid server providers overseas

Settled service fees for technical partners

Conducted compliant fund transfers between the offshore account and its FT account in China

Throughout the process, the company completed capital outflow through ODI registration and used the CIPS system for part of its RMB settlements, effectively reducing exchange and tax costs.

5. Future Trends and Recommendations

With increasing global financial regulation, offshore account establishment and usage will face higher compliance standards. Domestic companies should pay attention to the following trends

1. Strengthened Regulation of Fund Usage Authorities will place greater emphasis on the authenticity and rationality of fund flows.

2. Digital Cross-Border Payments Technologies such as blockchain and digital currencies are expected to enhance cross-border payment efficiency.

3. Promotion of RMB Settlement In the context of RMB internationalization, companies should prioritize cross-border RMB payment solutions.

4. Enhanced Compliance Framework It is recommended that companies establish a robust cross-border fund management system and seek guidance from professional advisors.

In conclusion, achieving offshore account payments is not inherently difficult for domestic companies, but it must be done within a compliant framework with careful planning and execution. Selecting the appropriate account location, designing a suitable fund transfer path, and implementing effective tax planning are key to achieving efficient cross-border financial management. In today’s global economic environment, mastering offshore account operations has become an essential capability for companies aiming to enhance their international competitiveness.